Unveiling the Power Dynamics in the Esports Ecosystem and What’s Shaping Its Evolution
Looking at the whole esport ecosystem, the current power dynamics are showing a form of lead organization network governance centered around game publishers. They control key resources, the game IP, and centralize its power. The streaming platform stands out as a crucial player. It's the primary stakeholder directly linked to the massive fan base, giving them considerable control over valuable resources in the ecosystem and, consequently, some influence, it also directly monetizes through fans and viewers which make their revenue more stable. Gamers, especially the elite players, have their own form of power. Because of the competitive nature of esports, these elite gamers can negotiate for higher wages based on their skills and a massive fan base. Esports teams position themselves as an effective marketing platform as the existing business model is optimized on sponsorship deals. Their power primarily lies in influencing sponsors and demonstrating how they can create value for them. Without a business model to monetize through the fan base, esports teams are in the weakest position at the moment, which explains the recent economic challenges esports teams are experiencing, AKA, Esports Winter, while other stakeholders are able to stay afloat or better.
The diagram below illustrates power dynamics based on circle size. However, these dynamics are continuously evolving, albeit slowly, for three main reasons:
The lead organization's governance model is less stable compared to the network governance model, where multiple players wield significant influence.
The esports ecosystem is fragmented due to numerous esports titles, each establishing its own ecosystem. However, various entities within this ecosystem can expand across multiple esports titles.
The esports ecosystem currently lacks efficiency in monetizing its massive fan base. Moving forward, with the right business model, players closely connected to the fan base could rapidly gain significant power.
The Esports Ecosystem
Reference
Peng, Q., Dickson, G., Scelles, N., Grix, J., & Brannagan, P. M. (2020). Esports governance: Exploring stakeholder dynamics. Sustainability
