In December 2023, Nouns Esports took a bold step toward sustainability with the passage of Proposal 466 for 2,098,600 USDC. Now, with a full-time staff and resources to pursue growth, Nouns Esports is determined to evolve into a fully functioning esports organization. I, Peter, transitioned from an advisory role to a full-time position, tasked with facilitating operations, optimizing strategies, and guiding the organization toward success.

My Experience and Perspective

Coming from a professional Dota 2 background and having previously served as CEO of Evil Geniuses, one of the world’s most prominent esports organizations, I bring a deep understanding of the esports industry. I know what it takes to operate at the top level, not just in terms of competitive success but also in the challenging dynamics of sustainability.

Unfortunately, the reality of esports at the highest level is riddled with instability and unsustainable funding methods. From 2015 to 2019, many teams rode the wave of venture capital, with investments reaching eight figures from uninformed investors. From 2020 to 2021, lucrative crypto sponsorships flooded the space, leaving behind a negative perception across gaming communities. Most recently, from 2021 to 2023, many teams have relied on unregulated gambling sponsorships. Today, in 2024, the industry is increasingly funded by investments from the Middle East, fueling entertainment, including esports, but with little foresight for long-term sustainability.

A Bubble of Unsustainability

The esports industry has created a bubble of unsustainability, where organizations often rely on one major source of funding. When that funding source vanishes or falters, the teams and organizations face severe consequences. Many passionate operators have had no choice but to sell their organizations to keep up with the financial demands. Outside money has led to a constant need for more outside money, and in the meantime, salaries for players and staff have skyrocketed in an arms race to secure the best talent.

Yet, despite the ever-growing costs, revenue remains sparse, and profit is often non-existent. Esports players, especially, have been conditioned to believe that competitive success will ensure financial stability. However, this narrative is becoming less true as prize pools dwindle and publishers reduce their involvement in competitive series. A prime example is Dota 2's "The International" (TI), whose prize pool dropped from $40 million in 2021 to $2.6 million in 2024. Players now earn more from team salaries than from prize money.

The Changing Landscape for Players and Teams

Players must now focus on building authentic connections with their fans to create trust and loyalty. This is essential for converting fans into consumers who will try new products. Without this connection, teams will struggle to secure and maintain successful sponsorships, the lifeblood of most esports organizations.

Esports, at its core, has never figured out a consistent revenue model. Investors, especially those from traditional sports backgrounds, saw esports as a pathway to franchise leagues and broadcasting deals, but the internet has created a unique phenomenon that defies those traditional structures. The "sport"—the game itself—is entirely owned by the publisher, who controls how much revenue is shared with the community. In-game cosmetics and microtransactions have proven to be the most lucrative funding mechanism for publishers, especially those with secondary market trading like Valve. However, this model leaves little room for third-party operators to thrive independently.

The Opportunity for Nouns Esports

I believe esports organizations must create better products that engage consumers to spend money directly. Currently, that product does not exist in the esports space, but I am confident that by bringing fandom and culture onchain, we can bridge that gap. Digital products that exist outside the publisher's control will be essential to fostering deeper engagement within esports communities.

Smash Bros. is an excellent example of a self-sustaining community. Unlike many other esports, it is primarily funded by its passionate grassroots scene through event participation. Smash players and fans are hyper-engaged, contributing their time and resources not for financial gain, but for the cultural experience. This is the space where I believe Nouns can make a significant impact.

Bringing Esports Onchain

By continuing to build our brand within the Smash community, I believe Nouns can find cost-effective strategies to bring users onchain for more engaging and rewarding experiences. These hyper-engaged users can be incentivized to participate in onchain culture, opening the door to meaningful partnerships and conversions with blockchain-based applications.

Blockchain technology, in particular, is searching for new users, and I believe esports can bring massive new audiences onchain. I want Nouns to lead the way in this effort, creating a sustainable future for esports that transcends the volatile funding cycles of the past.

I envision a future where Nouns Esports pioneers a new model of engagement. One that goes beyond impressions and surface-level awareness. Our challenge is to reshape the industry by nurturing a culture that thrives both inside and outside the game, onchain, and within the hearts of our community. This is not a challenge that can be solved overnight, but it requires us to prioritize meaningful engagement. Our focus must be on creating lasting value for our community, elevating the experience for consumers rather than catering solely to new funding cycles.