When news broke of another round of layoffs at ESL FACEIT Group, the community split into two camps: the ‘sky is falling’ doomsayers and the weary realists. In a year already marked by shrinking budgets and canceled events, one more cut didn’t shock anyone—it just felt inevitable for many. But inevitability doesn’t mean insignificance.
The third wave of ESL layoffs in less than a year, coupled with the shelving of ESL Impact, the company’s women’s circuit, raises a more unsettling question: is this just one company tightening its belt, or an early warning that the broader esports economy is contracting?
An ESL problem, or an esports problem?
At first glance, ESL’s struggles look self-contained, the predictable fallout of a company whose dominance was undermined by a changing ecosystem.
For years, ESL and BLAST operated as a duopoly, carving up the Counter-Strike calendar and controlling much of the circuit’s broadcast and sponsorship revenue. When Valve dismantled that monopoly this year by opening the field to independent organisers and community events, ESL lost not just exclusivity but leverage.
Then came the dominoes. Losing the Rocket League Championship Series (RLCS) to BLAST stripped away another major property.
And Impact’s cancellation hits especially hard. Circuits like it, which are focused on women, inclusivity, and grassroots competition, were once viable loss leaders. Companies could afford to fund them at a deficit because flagship properties like ESL Pro League or IEM made up the difference. But when they start bleeding cash, the projects that once signaled progress are now first on the chopping block. With layoffs, reduced output, and the cancellation of Impact, ESL looks like a company in retrenchment, trying to fight for a place in a vastly changing landscape.
The illusion of endless growth
For the last decade, esports was sold as a recession-proof billion-dollar industry with limitless potential. It grew on the back of a seductive narrative: a global, digital-native audience and a pipeline of future consumer brands couldn’t afford to ignore. Large-scale events sold out. Sponsorship deals ballooned. Team valuations rivaled tech startups.
But beneath the surface, the math never quite worked. Many organisations ran at a loss, propped up by venture capital, publisher subsidies, or exclusive tournament deals. When that scaffolding started to wobble—post-pandemic, post-crypto, post-ad boom—the cracks became impossible to ignore. Now, the “grow at all costs” era is ending, replaced by a more sobering reality of smaller budgets, sharper competition, and a renewed focus on actual profitability.
Bust after the boom
The shift isn’t limited to ESL or Counter-Strike.
Dota 2 offers a telling parallel. Valve’s 2024 overhaul of the Dota Pro Circuit dismantled the guaranteed league structure, fragmenting the ecosystem and eroding sponsorship stability. The International 2024 posted its lowest viewership in years—22.2 million total, peaking at just 1.4 million for the finals—and Valve’s decision to ban in-game advertisements further restricted brand visibility.
Riot Games scaled back its esports division in 2024, merging operations across VALORANT and League of Legends to cut costs, while Blizzard shuttered the Overwatch League entirely — a symbolic end to one of esports’ most ambitious franchising experiments.
For companies like ESL, the challenge isn’t proving their value, but redefining their role and evolving their model and strategy in an ever-shifting landscape. Case in point when Blizzard partnered with ESL FACEIT Group and WDG Esports to launch the OWCS, a new open-format league replacing the OWL, emphasizing regional partnerships and a more flexible, sustainable structure.
And yet, there’s a potential upside. Esports has long been torn between being a legitimate sport and an entertainment spectacle. A leaner, more disciplined ecosystem might finally allow it to focus on what truly matters: sustainable competition, meaningful narratives, and authentic community connection, instead of chasing the illusion of being “the next NFL.”
Esports isn’t dying, though if you ask older players, the “dAeD game” refrain is eternal. The layoffs at ESL might not signal the industry’s collapse, but perhaps mark a maturing phase — one defined less by hype and more by hard economics.
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