Mark Cuban says investing in esports teams is “awful business”

By Olivia Richman

|

Oct 25, 2019

Reading time: 2 min

Billionaire investor Mark Cuban said owning an esports team is an “awful business” in a recent interview with Fox Sports 1.

Cuban listed a lack of viewership and ever-changing metas as major reasons people shouldn’t invest in North American esports organizations.

“I absolutely wouldn’t (invest),” Cuban said. “You know what the meta is? They change things all the time, whether it’s Overwatch, League of Legends, or Fortnite for that matter.”

The reason the constant updates are bad for business, according to the Mavs Gaming owner, is that it’s “mentally and physically straining” for the players. It’s almost like they have to learn the game all over again, he said.

Cuban’s bigger sports focus is in basketball as the owner of the Dallas Mavericks. One reply to the interview even referenced basketball, saying, “Imagine playing basketball ball and every game they change the height and diameter of the net. That’s Overwatch.”

But the biggest issue, Cuban continued, is the economics. He explained that many of the people who invested in esports teams had not realized “how bad a business it was.”

“Is it growing? Yes. But domestically here in the United States? Owning a team is an awful business. You’re seeing a lot of consolodation. You see a lot of people trying to raise more money. I think a lot of people who bought in didn’t recognize the difference between a stream and viewer in Europe and Asia versus streams and viewers in America,” Cuban explained.

While esports is estimated to be a $1.7 billion industry by 2021, that doesn’t mean most of that success will be found in the US. The Texan stated that investors see the high numbers on Twitch, but don’t realize that a game in the Overwatch League only gets an average 300,000 views during a match.

“That’s not a huge number,” he said.

The real money, Cuban said, is in Asia, especially in Korea or China. But here? “Not so much,” he said.

He pointed to how hard it is to capitalize on gaming in America by using Tyler “Ninja” Blevins as an example. The streamer makes a lot of money, he and the interviewer agreed, but in order to do that he has to stream 10 or more hours a day on Mixer “and not have a life.”

One Twitter user said that while he respects Cuban, he feels that the esports organizations in the US need the support. He disagreed that it’s a bad business decision, but others jumped in to defend Cuban’s standpoint.

“The Overwatch League is smoke and mirrors. These 20+ million [dollar] franchises and companies like Toyota spending money on a 100K Twitch viewership match, 300K if it’s a special event,” it was said. “Blizzard just keeps the OWL afloat because if they don’t, their playerbase would be cut in half. And that’s bad for loot box sales.”

Another added that while Blizzard makes money off of the Overwatch League, the teams themselves don’t.

Cloud9 is said to be pulling investment from their Overwatch League team, the London Spitfire, while Los Angeles Valiant have been rumored to be putting together a “low budget” team for next year.

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