Is Indian Esports Going Too Fast?

With CS2's launch around the corner, there has been a lot of hype around the world, especially in India, with the announcements of events, localized content, etc.

Skyesports recently announced an event with a total prize pool of 2 Crore INR ($244,000), which made global headlines in the esports world. Counter-Strike has never seen a prize pool this big in India. As a matter of fact, it was not until recent times that we had any sort of a prize pool this size, except for the Indian Gaming Carnival, which had boasted of a $300k prize pool in 2012 (but we don't talk about that).

India is a unique market where a lion's share of esports consumption happens on mobile phones. You have to keep in mind a lot of consumers might not even have access to broadband, and many of them use mobile data, roughly limited to 1-3GB/day. These are also the people with the least spending power, at least so was the case with viewers for popular titles like BGMI and Free Fire. This is a crucial factor when deciding broadcast times, and determining the sort of on-demand content pushed out during the event. Funnily I have even witnessed a request from a publisher to not put out behind-the-scenes vlogs until the event was over because the viewership seemed shaky; they wanted to optimize every factor possible so that viewers wouldn't "waste" their mobile data on content that didn't directly contribute to ROI for the investor. Frankly, I think that was quite smart.

Historically speaking, the Indian esports market has not had a lot of spending power given it’s demographic, a fair conclusion to draw from this report, which states making Rs.25,000 (~$300) places you in the top 10% of wage earners in India; which is why you don't see a lot of jersey sales or ticketed esports events. This begs the question, how sustainable is this ecosystem in the long run? While TOs in India have been raising funds for the expansion of their businesses despite the esports winter, I'm having a tough time wrapping my head around how is this money going to be made back. While numbers for mobile games are still promising, the ambiguity of the government's stance on what games will be banned is a sword hanging over our heads. And if there is anyone consistently making money in India, it is the publishers, not the tournament organizers.

PC esports titles have it worse, way worse. Forget people willing to pay for tickets: most organizers have had to depend upon influencers to fill up arenas with promises for meet and greet, and influencer show matches that incur a massive cost to organizers because hiring these influencers is not cheap. This raises the question what is the end game here?

Viewers want bigger events and better experiences, but they are unable to pay for them. Organizers try every trick in the book, ranging from experience zones to influencers, to ensure the brands they secure sponsorships from are satisfied with the reach and footfall. Games like Valorant still have teams and storylines, which attract a decent chunk of viewers online for specific teams/matches. But this is absolutely non-existent for Counter-Strike in India because the scene simply does not exist. The Hindi broadcast for the last ever CS: GO major averaged around 20 viewers, which paints a bleak picture for times to come.

My concern is the amount of money being spent to "cultivate" the scene, especially with the biggest ever Indian Counter-Strike tournament to happen, is that it is not going to be easy to earn back. The scene does not exist, there are no known players. This is because every single notable name transitioned from CSGO to Valorant. I'm highly skeptical of how much money the viewers might be willing to spend (if any at all) to support the scene. We have seen what happened with the ESL Faceit group. Experts like Richard Lewis have been calling for fans to start paying, or we will keep seeing companies shutting down because they cannot sustain themselves at the rate they have been growing because there simply isn't enough money being made. Gfinity, CLG, Beyond the Summit, The Guard, and Copenhagen Flames have all shut shop because it is seemingly impossible for them to survive.

The entire esports ecosystem in India is running on marketing budgets from brands, streaming platforms BURNING money to bleed each other to death by spending copious amounts of money to acquire new users, broadcast rights, streamers, and VC money. While this is not necessarily a bad thing, the problem is not the amount of money being invested: the problem is the amount of money being made back. To add to this, you have stakeholders asking for players to be allowed to stream their own POV on their personal channels during the tournament, which I'm not sure of how it would work.

My biggest concern is for the people employed in the industry and the potential long-term effect of VCs pulling the plug if they are not satisfied, companies not being able to sustain themselves without a cash injection because of lack of profits and the biggest of them all, lack of financial education among players for securing their future because the paychecks might not last forever and you cannot be writing cheques your body cannot cash.