Disguised Toast, recently published a video in which he shared that he lost $1,000,000 with his Esports Org.
The Esports Industry Is In A MASSIVE Recession
We didn't really need Toast to clarify this to know the obvious. With multiple countries going into economic recession, Esports are certainly going to get hit by it. With companies trying to tidy up their budgets and make cuts wherever possible, Esports Orgs will have to change their strategies and find more creative ways of income. Esports Orgs are massive investments and need a lot of funds and structures to be taken care of.
There are two ways of income that are known for Esport Orgs, which are:
- Sponsorship Deals
- Franchise Deals
- Cuts of prize winnings
Sponsorships are obviously a big factor in any entertainment industry. Toast in his latest video stated that a lot of companies are trying to get out of Esports because the Orgs are not delivering as expected. As a comparison, he presented an Esports Org which has sponsorship contracts including sponsored partnership videos that cost tens of thousands of dollars, but only have a couple of thousand views on them.
Tarik appreciating Toast's esports ethics regarding contracts.— GianneSky (@GianneSkyT) April 24, 2023
Tarik: " He's more caring for the players in his org . It's the complete opposite of how 90-80% esports orgs operate.
I told him 'Don't get burned out there if you don't look after yourself.'
Common W Friend Turok pic.twitter.com/t0OJt6xMkY
Energy Drink Company Declined His Partnership Offer\
The company in question wasn't stated, but the story behind it is much more important.
"Brands don’t want to be in esports because they’re tired of bleeding money."
He and his team approached a super high-profile energy drink brand that was currently sponsoring another high-tier Esports organization. With a substantial reach and significant social media attention drawn to himself and his organization, they felt extremely confident in their approach.
“We went to them and we were like, ‘Hey, we noticed you’re in the esports space. We’d love it if you’d partner up with us. Here are our numbers. Our YouTube numbers do twice as well. Our Twitter engagement is ten times better, and we only want half the money. Can we work something out?’
The response they received was far from what they were expecting. The energy drink brand revealed that they were planning to exit esports and the only reason they are sponsoring the team was only due to the contractual obligations that would expire next year.
They expressed that they are disappointed because the team failed to deliver on the promises, and weren't up to the task. This experience left him with the impression that brands are becoming wary of investing large sums of money in esports due to the lack of significant returns.
Disguised Toast Launches Patreon For DSG
This video wasn't created as a means to vent or complain about the esports industry and its challenges. Toast is loved by the community for his honesty, motivation, and ambition to make positive contributions. DSG cost him 1 million dollars that came directly from his life savings. After a short but serious convo with his accountant, he found out that just one of his teams had half a million dollars in costs, but nothing in revenue.
In an effort to balance out the sheets, he announced the launch of Patreon to support Disguised and pay the player and staff. It will cost just 5$ a month and benefits include weekly discord episodes from himself and DSG COMPANY DISCORD which will provide access to their chat possibility to participate in their company events. Currently, DSG only has a team in League of Legends as they recently parted ways with their Valorant squad.
Nothing's certain, but there might be hope for a Valorant comeback if the Patreon project turns out to be successful.
- If you wish to participate in his Patreon project, this is the link to it, and if you wish to Subscribe to his Twitch Channel you can get 30 days of Amazon Prime for free on this link and support our toasty.
This is probably one of the many challenges that Esports is facing and is yet to face. Esports is an industry surrounded by gamers and having it fail will leave a huge gap in our community. We are super eager to see what will turn out from all this and will keep you informed about anything new. Make sure not to miss anything and check out our Valorfeed Esports Section for similar stuff.
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