With the introduction of new esports titles and the surge in viewership in the creator space, breaking even has become difficult for most esports organizations, especially in North America. Additionally, sustaining a single team without proper financial support has become a mammoth task for many smaller organizations due to inflated salaries.
A popular esports journalist, George Geddes, reported that the North American organizations participating in the VCT league could be planning to downsize their Valorant operations and reduce players' salaries in 2024.
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North American Organisations Could Downsize Valorant Operations To Stay Afloat
Even though Valorant is a young esports title, an organization's investments to run its Valorant division are enormous. In North America, organizations are paying $20,000 to $30,000 per month to their Valorant players. Since the title is young, it is challenging to attract sponsors for the same.
Losing money in the esports industry has become common, and organizations like The Guard and FaZe Clan made cuts to sustain themselves. North American giant, Sentinels, launched a crowdfunding campaign to keep things running for a little while longer. Sentinels are losing money as they are burning around $695,000 per month in salaries. Without any miraculous funding, Sentinels could cease operations in three to six months.
Even though other organizations aren't in Sentinels' shoes, they could be planning to reduce player salaries in the coming year for longevity in the scene. As an esports title, Valorant will take its time to ripen and become a sustainable game for organizations but until then, Riot Game is supporting partnered teams in multiple ways. Riot Games also plans to support teams by introducing skins in partnership with the franchised teams and sharing the revenue with them.
Like the Champions Bundle, Riot Games will introduce individual team-themed skins in the market. On a successful in-game transaction, the franchised team will be given a share of the revenue earned, helping them support themselves.