Reality Challenges Optimism in 2024

It's tough to turn the page on 2023 when mass layoffs and closures continue in 2024.

Jan 17, 2024

statue of liberty in the woods — Photo by Marek Studzinski on Unsplash

It has been a tough couple of weeks in gaming as Twitch and parent company Amazon, Discord, Unity, Google, and others announced big layoffs this week. While some in the tech and gaming sector had hoped to turn the page on 2023 and the mass layoffs that happened, there are more to come in 2024 as the global economy puts its finger on the scales of all businesses and shareholders seek austerity measures to maximize profits and avoid losses.

That belt tightening and cost cutting will continue in the first quarter of 2024—we imagine—for a number of reasons, including dire projections like this one from the World Bank. - James Fudge

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Twitch CEO Says Platform is Not Profitable

After laying off around 500 employees—or 35% of its workforce— this week, Twitch CEO Dan Clancy said in a follow-up livestream that the Amazon-owned streaming platform was not profitable, but that its parent company is still bullish on it as an ongoing business unit and will continue to invest heavily in it. It's not really a great shock that the platform isn't profitable, though the public wouldn't know that because Amazon does not break down spending and profits of Twitch in its quarterly reporting.

“I’ll be blunt: we aren’t profitable at this point,” Clancy said. “Amazon has been extremely supportive of Twitch. Big thing for being sustainable over time is ensuring we don’t lose money. That’s a big part of my job because that’s going to be what makes sure we can be here for the long term.”

Clancy also noted that Twitch is done paying millions of dollars to retain high profile content creators as it did in the past.

“The cost of retaining those streamers would have been far more than the revenue generated from them,” he said. “That is something we’ve been very clear about. We don’t want to do that.”

Edward Craven, the co-founder of gray market gambling and casino company Stake, Primedice, and live streaming platform Kick, said in public this week that he looked forward to buying the platform. Clancy noted in his livestream that Twitch isn't for sale. Given that Kick's financials—including where its money actually comes from—are not publicly disclosed, it's unclear how the company could generate the tens of billions of dollars it would take to acquire such a property…

LEC, LCS Reveal Partners

It was the start of the LEC this weekend, but Riot Games spent the week touting its returning sponsors and partners for the LEC including Kia, LG Ultragear, and KitKat, among others. LCS also announced Kia, HP, HyperX, Omen, and others as sponsors for 2024 (Kia also announced an expanded partnership with NRG Esports).

Partnerships aside, the LEC Winter Split 2024—which kicked off this weekend at the newly revamped studio in Berlin— saw a record-breaking opening day, according to EsportsCharts. EsportsCharts reported a peak viewership during the first day of roughly 556K during the 2023 Winter Split finals between MAD Lions and G2 Esports. We expect a full breakdown of this viewership on Monday.. Riot's Director of League of Legends Esports - EMEA Maximilian Peter Schmidt highlighted the milestone on Saturday.

Layoffs Hit Discord

Gaming-focused instant messaging and social platform Discord has laid off 17% of its global workforce, or roughly 170 employees. The news was delivered to employees in an email from Discord CEO Jason Citron on Thursday. These latest cuts follow a round in August of last year that saw approximately 4% of staff let go.

While Citron says a lot about the “why” of these layoffs, the gist of it is summed up succinctly in this paragraph:

“We grew quickly and expanded our workforce even faster, increasing by 5x since 2020. As a result, we took on more projects and became less efficient in how we operated.”

On the plus side (if there is one about a layoff), the company still has around $700M USD in cash on hand from the estimated $1B it collected from investors…

People on the Move

Here are the latest movers and shakers in esports and gaming:

Esports:

Michael Hassall has left his role as content editor at Esports.gg and is looking for new opportunities.
Dominic Müller has left his role as senior director of global partnerships - esports & gaming at SPORTFIVE.
Alexander Nehr has been named the director of game ecosystems - Esports World Cup at ESL FACEIT Group.
Willian Correa joins Rivalry as its new VP of engineering.
Stefan Djokic has been promoted to senior tournament partnerships manager at GRID Esports.
Dominik Feist has left his role at Freaks 4U Gaming to join Shikenso Analytics.
Emma Rose joins British Esports as its new community manager.
Spencer Kirksey joins Esports Foundry as its new business development lead.
Nick Macknight has launched Super Streaming as a co-founder and COO.
Sunny Bhandarkar becomes CEO of Mobile Global Esports.
Kiki Benson resigns as chief financial officer of Mobile Global Esports.
Mark J. Keeley is appointed the new CFO of Mobile Global Esports.
Sam Han joins PlayVS as its new digital media manager.
Marco Niemann leaves his role as head of global partnerships at G2 Esports.
Thomas Riediker is named gaming & esports manager at Red Bull Switzerland.
Roger Lodewick leaves ESL FACEIT Group to join Viaplay Netherlands as its new SVP and CEO.
Eric F. Brinkley starts a new position as executive director, programs & content at Global Esports Federation.
Glynn Jones joins Guild Esports as its new director of agency partnerships.
Darragh Barker joins EPIC Global as its new head of strategy.
James Fraser-Murison joins Esports Insider as its new education advisor.
Edgar Chekera joins Global Esports as its new sports psychologist.
Former esports journalist Billy Studholme joins Room 8 Group as senior copywriter.

Gaming:

Molly Shepherd-Boden joins the talent acquisition team at Hypixel Studios.
Samuel Roberts is the new UK PR manager at Bethesda.
Natalya Tatarchuk appointed chief technology officer at Activision Blizzard.
Gaming executive Michael Ciminera joins ToyMonster as its new president of NA.
Julio Vargas joins Ovation Studios as its new global community lead.
Emily Greer reveals that Double Loop Games has shut down and its staff let go.
Mitch Dyer is no longer at WB Games Montreal.
Sega has appointed Shuji Utsumi as President/COO and CEO of Sega America and Europe.