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Esports market correction fears due to 'over-evaluation'

Esports market correction fears due to 'over-evaluation'

Various esports organisations could be headed for a market correction due to overvaluation, according to multiple industry sources.

A report by Sports Business Daily claims much of the worry stems from a disparity between the valuation of esports organisations and the average revenue that they generate.

The result of this could lead to layoffs at companies focused on less popular games, as seen recently with Infinite and Echo Fox.

Some esports experts even go as far as to predict that firms will be forced to return to the capital markets at a lower valuation, which will cost founders and early investors money and control. 

One of the reasons for the lower than desired revenue streams, it's claimed, is that sponsorship income isn’t growing as rapidly as hoped, with organisations lacking the hard assets and control of IP that sponsors are looking for.

Our sister-site PocketGamer.biz has more on the story.


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Staff Writer

Iain is a freelance writer based in Scotland with a penchant for indies and all things Nintendo. Alongside PocketGamer.Biz, he has also appeared in Kotaku, Rock Paper Shotgun, PCGamesN and VG24/7.

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