The legal and economic aspects of the "Esports Illusion" -Why Competitive Gaming Fails to Become an Independent Industry

Pál Novák^*Balázs HohmannDávid SiposGergely Szőke

• University of Pécs, Pécs, Hungary

The esports industry has grown rapidly over the past decade; however, recent developments suggest a phase of consolidation—often labelled as the "Esports Winter." The authors argue, however, that this term is misleading. The current trend does not reflect a decline in market relevance or interest, but rather a structural correction and maturation of the ecosystem. This paper explores the hypothesis that the lack of a coherent legal framework and the economic model—where game publishers retain full control over competitive gaming rights—are key factors shaping this consolidation. Using a comparative legal approach, the study examines the foundational role of intellectual property law, contract law, and regulatory asymmetries. It also draws on market reports and financial data to contextualise how game publishers exercise economic control and how this affects the broader video game industry. The findings suggest that the main obstacle to esports becoming an independent industry lies in the legal and economic dominance of game publishers. Unlike traditional sports, which are governed by independent federations, esports events depend entirely on publisher authorisation. While some ecosystems, such as Dota and Counter-Strike 2, allow for third-party tournament organisation, such flexibility remains tightly constrained by publisher licensing terms. Since esports primarily functions as a tool to promote engagement with specific games, publishers have limited incentive to support broader autonomous structures. Furthermore, esports revenues account for less than 1% of the global video game industry's total income, reinforcing the conclusion that esports is a complementary segment rather than a standalone industry. The legal structure, rooted in intellectual property protections, makes it unlikely that the industry will transition toward a model resembling traditional sport. Rather than indicating a crisis, the ongoing consolidation phase reflects a sustainable long-term adjustment. The ecosystem is stabilising around publisher-driven models that are legally entrenched and economically rational. While regulatory reform is often proposed in academic and policy discussions, any fundamental transformation would require publishers to relinquish control over their intellectual property an outcome the authors consider improbable. Esports will therefore likely remain a strategically integrated extension of the video game industry, rather than evolving into a fully independent, institutionally autonomous domain.