had estimated FaZe Clan was worth just ten months earlier. It was also a signal that the esports industry had resumed its ascent after a couple of years in which team values had largely flatlined. Indeed, innew ranking of the most valuable esports companies, the top ten are worth an average of $353 million, up 46% from the last edition of the list, in December 2020.
last week, it revised its forecasts downward. Skeptics point to the company’s $36.9 million net loss for 2021, among other things, andThe eye-watering valuations for the rest of the top ten similarly belie the reality of the industry right now: Esports is a tough business, and in some ways getting tougher, and the rise in these companies’ valuations is largely being driven not by their esports teams but by their other divisions.
“There’s a broad-based agreement that esports as a standalone doesn’t work as a business,” one team executive says bluntly. In an even more distant future, the establishment of a metaverse linking multiple popular games together could steal some power from publishers, allowing teams to sell items or avatars that could transfer from game to game and mitigating the IP issues they are currently navigating.publisher Epic Games announced last month that it had raised $1 billion in funding to support its metaverse initiative—those days are a long ways off, and game makers are in no rush to cede control.