For the last decade, esports was the darling of the investment world. Projections were sky-high, valuations even higher. Media outlets declared it the “future of sport,” and capital flooded in on the promise that professional gaming would become the next NBA, UFC, or Premier League.

But then reality set in. Sponsorships plateaued. Viewership fragmented. Teams struggled to monetize. Investors began whispering about “esports winter.”

Here’s the truth: the hype cycle ending isn’t the death of esports. It’s the best thing that could have happened.

The hype wave is over. And that’s a good thing.

What Went Wrong in the First Cycle

The first wave of esports followed a familiar curve: early promise, explosive growth, overhype, and then a sobering correction.

Most teams relied almost exclusively on sponsorships and prize pools. Business models were narrow, fragile, and dependent on outside capital. Entire organizations were valued like tech startups but run like sports clubs without stable revenue streams.

Add to that the fragmented global structure – different publishers, different leagues, different rules – and what looked like a single “industry” was really dozens of siloed ecosystems, each chasing its own economics.

The result was predictable. As the hype cooled, cracks showed. Teams folded. Investors pulled back. The headlines shifted from “the future of sports” to “unsustainable bubble.”

The Trough of Sorrow: Why This Is Normal

The Startup Curve (Image Source: Paul Graham, avc.com) 

If you zoom out, this is not failure – it’s the “trough of sorrow” in every exponential adoption curve.

Crypto, MMA, even the internet followed the same path: hype, disillusionment, reinvention, and then enduring success.

esports is no different. We’re exiting the overhyped phase and entering the real one – the stage where sustainable models emerge, and only the strongest teams and brands survive.

Winter clears the field. And those who can endure the cold are the ones who will define the future.

How Teams Will Actually Make Money

The mistake of the first wave was thinking sponsorships and prize pools were enough. They aren’t. The next generation of esports teams will act less like fragile sports clubs and more like media-tech companies with multiple revenue lines.

Here’s where the money will be made:

• Media & Storytelling – Teams must own their narratives. Podcasts, docu-series, and shows featuring personalities who aren’t just driving fan engagement – they’re monetizable media properties. Think UFC’s Embedded or F1’s Drive to Survive, but in esports.

• Digital Assets With Real Utility – NFTs and tokens aren’t speculative gimmicks if done right. Imagine fan passes that give holders access to training content, behind-the-scenes calls, or voting rights on team decisions. Done responsibly, Web3 tools create a new ownership economy between teams and fans.

• ICOs and Tokenized Communities – Instead of chasing endless sponsorships, teams can raise capital through Initial Community Offerings, where tokens unlock long-term value for both fans and investors. This isn’t just about capital – it’s about turning audiences into stakeholders.

• Hybrid Experiences – Revenue won’t just come from streams. Expect live arenas, festivals, and crossovers with music and fashion. The real opportunity is in hybrid entertainment IP, where gaming is one thread in a much larger cultural fabric.

• Academies and Training Pipelines – Just like football clubs monetize academies, esports organizations can build training schools, not only for pro players but for content creators, streamers, and future digital entrepreneurs. Education is a revenue stream – and a pipeline.

The lesson: treat esports as entertainment IP and digital community, not just competition.

What GAM Is Doing Differently

As the Chairman of GAM Entertainment, Vietnam’s most storied esports organization, I’ve seen both the promise and pitfalls up close. We’re not doubling down on broken models. We’re re-architecting the category:

• GAM is shifting from a team to a cultural brand, exporting Vietnamese pride to global audiences.

• We’re investing in media content, from podcasts to streaming collaborations, to build IP that fans can follow beyond match day.

• We’re exploring Web3 mechanics with real fan utility – digital passes, gated experiences, and tokenized community initiatives.

• And we’re leaning into player wellness, treating gamers like high-performance athletes with nutrition, fitness, and mental training.

This isn’t a sponsorship-first model. It’s an ecosystem play.

Read more: TK Nguyen Reveals for the First Time: GAM Esports’ Journey to the Top with CMG.ASIA

The Billion-Dollar Opportunity

The real opportunity isn’t to replicate traditional sports. It’s to create an entirely new category.

Imagine a future where:

• Teams are valued not just by trophies but by the strength of their fan token economies and digital communities.

• Merch drops, NFTs, and media shows drive recurring revenue streams.

• Academies pump out the next generation of streamers, creators, and digital celebrities.

• Esports festivals rival Coachella – part tournament, part cultural spectacle.

This isn’t a dream. It’s the logical evolution of the space once the froth clears.

Final Thought

Esports winter isn’t the end – it’s the reset.

The first wave proved there’s an audience, a culture, and a passion worth building on. The next wave will prove there’s a business.

Those who see the difference between a trend and a movement will thrive.

At GAM, we’re not asking if esports has a future. We’re asking what future we want to create.

Because this isn’t about surviving winter. It’s about designing spring.