- Southeast Asian esports startups face severe funding drought
- Companies diversify revenue streams to survive
- Industry seeks stronger partnerships with game publishers for sustainability
From Boom to Bust
The esports industry in Southeast Asia is experiencing a sharp downturn after its pandemic-fueled growth. Despite the region’s massive gamer base of 277 million, funding for esports startups has dried up dramatically.
Only two companies, Emerge Group and Box Vietnam, managed to secure funding between January 2023 and August 2024, compared to at least nine deals in 2021 and 2022.
Leveling Up Business Models
To survive the funding drought, esports companies are diversifying their revenue streams beyond competitions.
Successful firms like ATTN (owner of Evos Esports) and RRQ are focusing on game publishing, content creation, and merchandise sales. RRQ even launched a top-up service for virtual game currencies, demonstrating the need for innovation in the sector.
Publisher Partnerships Crucial
Industry experts emphasize the importance of direct support from game publishers for long-term sustainability.
Riot Games’ new revenue-sharing model for League of Legends teams, which includes proceeds from in-game digital purchases, is seen as a potential lifeline.
This approach has already proven successful for Valorant, Riot’s other popular title, distributing over $33 million to teams in 2023.
To read the original article: https://www.techinasia.com/sea-esports-startups-face-survival-test-amid-downturn
