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Illustration: Lazaro Gamio/Axios

Whether it's the seven-figure salaries or the hundreds of millions of dollars investors are pouring in, the esports industry appears to be doing quite nicely — but some industry veterans disagree.

What they're saying: 18 of them told Kotaku that they are worried esports is a bubble, with some describing it merely as "inflated" and others as "completely unsustainable." Esports veteran Frank Field said it was nearly "a Ponzi scheme," adding, "Everyone I talk to in this industry kind of acknowledges the fact that there is value in esports, but it is not nearly the value that is getting hyped these days."

What's at play:

1. Sketchy numbers: It was widely reported that last year's League of Legends World Championship drew more viewers than the Super Bowl — the kind of headline that could turn even the biggest esports skeptic into a believer. Turns out, those numbers were unreliable, misleading and potentially even inflated, per Kotaku.

  • Unreliable: When it comes to, say, an NFL game, viewership numbers are reported by a third party like Nielsen. In esports, viewership numbers are reported by either the game publishers, the esports teams or the streaming platform. Pretty big conflict of interest.
  • Misleading: A Super Bowl viewer must watch for six minutes to register with Nielsen's tracking. For esports, someone can briefly scroll past a livestream and count as a viewer.
  • Inflated: Multiple esports tournaments have paid to have their livestream embedded across hundreds of websites affiliated with a company called Curse, Kotaku reports. This results in numbers that don't actually represent engaged humans.

2. Lack of revenue: Multiple leagues have shuttered due to money problems and one industry analyst estimates that as many as 89% of esports teams are operating at a loss. Investment keeps coming in, though.

"When you're seeing teams right now raising over $300 million valuations on revenues under $25 [million], you're kind of like, what? … No one's more bullish about esports than I am [but] I just think good, old-fashioned common sense would go a long way here."
— Jason Lake, founder, Complexity Gaming (via Sports Business Journal)

The big picture: Investors have flocked to esports because they don't want to miss out on "the next big thing." They have no problem burning through cash if the opportunity is big enough, but eventually they want to see a return.

  • That promise of a future payout is strung along by eye-popping viewership numbers and overall hype. If those numbers are inflated — and the hype somewhat unearned — the industry could fall short of expectations.

The bottom line: Any outside observer can see that there is value in esports. But if we are to believe a contingent of those on the inside, it's nowhere near the numbers being thrown around.

Go deeper: Read Axios' Deep Dive on the Business of Sports

Go deeper

Ben Geman, author of Generate
40 mins ago - Energy & Environment

The road to COP26 gets slightly easier

Illustration: Annelise Capossela/Axios

The bad diplomatic vibes heading into the critical United Nations climate summit in Glasgow, Scotland, might be improving slightly.

Catch up fast: Chinese President Xi Jinping yesterday pledged to end overseas finance for building new coal-fired power plants and boost support for clean energy in developing nations.

Narrowing the employee divide

Illustration: Shoshana Gordon/Axios

Companies are narrowing the blue- and white-collar experience as they're forced to adapt to a worker-led market.

Driving the news: Basic office tools and concepts like corporate communications and schedule flexibility are migrating to frontline operations through investments in technology.

2 hours ago - Health

U.S. to buy 500 million more Pfizer doses to share with the world

A nurse fills a syringe with a dose of the Pfizer-BioNTech COVID-19 vaccine. Photo: Ben Hasty/MediaNews Group/Reading Eagle via Getty Images

The Biden administration is planning to purchase 500 million more Pfizer-BioNTech coronavirus vaccine doses to donate to the world, officials said in an op-ed Wednesday.

Why it matters: The move represents a big step toward making the U.S. a major global vaccine supplier just as China has ramped up exports of its Sinopharm, Sinovac and CanSino vaccines, which can be stored at normal refrigerator temperatures.