Insights From Disguised Toast: Esports Industry Hit Hard by Huge Recession

In a recent video, Disguised Toast revealed that he lost $1,000,000 with his Esports organization.

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Disguised Toast shared important insights in his recent video | © Disguised Toast @Youtube

We're in the "winter of esports", and it's quite evident even without Toast's clarification. With several countries experiencing economic recessions, esports is bound to be affected. As companies strive to manage their budgets and reduce expenses, esports organizations need to adapt their strategies and explore innovative avenues for generating income. Esports organizations require significant investments, funds, and proper management.

Esport orgs typically generate income through four main sources:

  • Sponsorship Deals
  • Franchise Deals
  • Prize Winnings
  • Marketing

Sponsorships play a crucial role in any entertainment industry. In his latest video, Toast mentioned that many companies are withdrawing from esports due to underperformance by organizations in terms of sponsorship reach. As an example, he highlighted an esports org with sponsorship contracts that include sponsored partnership videos costing tens of thousands of dollars but only garnering a few thousand views.

Energy Drink Company Rejected His Partnership Proposal

Although the specific company wasn't disclosed, the underlying story holds greater significance.

Brands don’t want to be in esports because they’re tired of bleeding money.

Toast and his team approached a highly reputable energy drink brand that was already sponsoring another top-tier esports organization. With a considerable reach and substantial social media attention surrounding himself and his organization, they were confident in their proposal.

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?

Their response was far from what they anticipated. The energy drink brand disclosed that they were planning to discontinue their involvement in esports, and their sponsorship of the team was solely due to contractual obligations that would expire next year.

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Toast discussing the possibility of adding merch to DSG | © Disguised Toast @Youtube

They expressed their disappointment as the team failed to fulfill their promises and meet expectations. This encounter led him to believe that brands are becoming cautious about investing substantial amounts of money in esports due to the lack of significant returns.

Disguised Toast Introduces DSG Patreon

This video wasn't made to vent or complain about the challenges in the esports industry. Toast is beloved by the community for his transparency, motivation, and desire to make positive contributions. DSG cost him one million dollars, which came directly from his personal savings. After a serious discussion with his accountant, he discovered that one of his teams incurred half a million dollars in expenses but generated no revenue.

DSG Patreon
Fans are eager for merch to be added to the Patreon | © Disguised / Patreon

To balance the books, he announced the launch of Patreon to support Disguised and pay the players and staff. For just $5 per month, patrons will receive weekly Discord episodes featuring himself and DSG COMPANY DISCORD, gaining access to chats and the opportunity to participate in company events. Currently, DSG only has a team in League of Legends as they recently parted ways with their Valorant squad.

While nothing is certain, a Valorant comeback could be possible if the Patreon project proves to be successful.

This is just one of the challenges that the Esports industry is currently facing, and more are yet to come. Esports is a community built around gamers, and its failure would leave a significant void. We're incredibly eager to see the outcome of all this and will keep you updated with any new developments.

It seems like it's not only the esports industry has some issues...

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