Chinese Business Review ISSN 1537 1506 V

Chinese Business Review
Volume 19, Number 2, February 2020 (Serial Number 191)
David Publishing
David Publishing Company

www.davidpublisher.com
Publication Information:
Chinese Business Review is published monthly in hard copy (ISSN 1537-1506) and online by David Publishing
Company located at 3 Germay Dr., Unit 4 #4651, Wilmington DE 19804, USA.
Aims and Scope:
Chinese Business Review, a professional monthly academic journal, covers all sorts of researches on Economic
Research, Management Theory and Practice, Experts Forum, Macro or Micro Analysis, Economical Studies of Theory
and Practice, Finance and Finance Management, Strategic Management, and Human Resource Management, and other
latest findings and achievements from experts and scholars all over the world.
Editorial Board Members:

Kathleen G. Rust (USA), Moses N. Kiggundu (Canada), Yutaka Kurihara (Japan), Christian Seiter (Germany),
Bogusław Ślusarczyk (Poland), Kazuhiro Takeyasu (Japan), Marvin E. González (USA), Roberta Guglielmetti Mugion
(Italy), Annarita Trotta (Italy), A Varadaraj (India), Natalia Petrovna Kusnezova (Russia), Shelly SHEN (China), Moira
Polyxeni (Greece), Boon-Anan Phinaitrup (Thailand), Carlos Salcedo-Perez (Columbia), Aysegul Yildirim kaptanoglu
(Turkey), Francisco J. Valderrey (Mexico), Ciurea Maria (Romania), José Manoel Antelo Gomez (Brazil)
Manuscripts and correspondence are invited for publication. You can submit your papers via Web Submission, or
E-mail to economists@davidpublishing.com, business.review.USA@hotmail.com. Submission guidelines and Web
Submission system are available at http://www.davidpublisher.com.
Editorial Office:
3 Germay Dr., Unit 4 #4651, Wilmington DE 19804, USA E-mail: economists@davidpublishing.com
Copyright©2020 by David Publishing Company and individual contributors. All rights reserved. David Publishing
Company holds the exclusive copyright of all the contents of this journal. In accordance with the international
convention, no part of this journal may be reproduced or transmitted by any media or publishing organs (including
various websites) without the written permission of the copyright holder. Otherwise, any conduct would be
considered as the violation of the copyright. The contents of this journal are available for any citation, however, all
the citations should be clearly indicated with the title of this journal, serial number and the name of the author.
Abstracted / Indexed in:
Google Scholar Free Libs
H-index list (H5: 12/11) World Cat, USA
Index Copernicus, Poland American Federal Computer Library Center (OCLC),
Chinese Database of CEPS, OCLC USA
Qualis/Capes Index, Brazil Norwegian Social Science Data Services (NSD),
ANVUR, Italy Database for Statistics on Higher Education (DBH),
China National Knowledge Infrastructure (CNKI), Norway
China Finnish Publication Forum (JUFO), Finland
Chinese Scientific Journals Database, China SCRIBD (Digital Library), USA
Wan Fang Data, China Open Academic Journals Index (OAJI), Russia
CQVIP, China WZB Berlin Social Science Center, Germany
Journals Impact Factor (JIF) (0.5) UniMelb (University of Melbourne), Australia
Subscription Information:
Print $520
David Publishing Company, 3 Germay Dr., Unit 4 #4651, Wilmington DE 19804, USA
Tel: +1-323-984-7526, 323-410-1082 Fax: +1-323-984-7374, 323-908-0457
E-mail: order@davidpublishing.com
Digital Cooperative Company: www.bookan.com.cn
D DAVID PUBLISHING
David Publishing Company

www.davidpublisher.com
Chinese
Business Review
Volume 19, Number 2, February 2020 (Serial Number 191)
Contents
The Emerging eSport Market: Analyzing the Impact of Virtual and Augmented Reality 37
Silvia Cacho-Elizondo, José-Domingo Lázaro Álvarez, Victor-Ernesto Garcia
The Economic Bankruptcy of the Industries in Mato Grosso, Brazil 55

Dilamar Dallemole, José Ramos Pires Manso, Katiane Toldi
Chinese Business Review, Feb. 2020, Vol. 19, No. 2, 37-54
doi: 10.17265/1537-1506/2020.02.001
D DAVID PUBLISHING
The Emerging eSport Market:

Analyzing the Impact of Virtual and Augmented Reality
Silvia Cacho-Elizondo
IPADE Business School, Mexico City, Mexico
José-Domingo Lázaro Álvarez
ICAMI Business School, Guadalajara, Mexico
Universidad Panamericana, Guadalajara, Mexico
Victor-Ernesto Garcia
YBVR, Madrid, Spain
This article explores the impact of immersive technologies like virtual and augmented reality on video game
competitions. These electronic games are structured under an analog scheme similar to that of the sports industry,
which has given rise to a new and rapidly growing global market known as “eSports”. eSports are a confluence of
innovation, strategy, and marketing, in which players, or gamers, come together and compete with the same
intensity and commitment as professional athletes. Gamers participate in local, national, and worldwide
competitions that are broadcast over a variety of media, and are sponsored by large transnational companies/brands.
For these companies, the eSports phenomenon represents a new paradigm capable of revolutionizing the very
concept of entertainment. In this article, we propose a conceptual framework through which we can analyze the
business repercussions of this new technology from an integral perspective that takes into account players, sports
clubs, publishers, sponsors (brands), spectators and broadcasters. Through this analysis of representative companies
from the eSports sector, we explore their evolution and future tendencies, like virtual-reality and augmented reality.
The industry participants agree that such groundbreaking these technologies are going to be crucial to the future of
eSports because they will be the new way of playing and a marketing revolution. This project seeks to stimulate
further research into the profound technological transformation the entertainment sector is now undergoing with the
digitalization and implementation of immersive technologies. Special attention will be paid to the
institutionalization and professionalization of video game competitions and their progressive homologation with
traditional sports.
Keywords: eSports, entertainment, videogames, Virtual-Reality (VR), Augmented-Reality (AR)
Silvia Cacho-Elizondo, Ph.D., professor & academic director of In-Company Programs, IPADE Business School, Mexico City,
Mexico.
José-Domingo Lázaro Álvarez, associate professor, ICAMI Business School, Guadalajara, Mexico; associate professor, School
of Economics, Universidad Panamericana, Guadalajara, Mexico.
Victor-Ernesto Garcia, YBVR, Madrid, Spain.
Correspondence concerning this article should be addressed to Silvia Cacho-Elizondo, IPADE Business School, Floresta # 20;
Col. Clavería, Delegación Azcapotzalco; Mexico City 02080, Mexico.

38 ANALYZING THE IMPACT OF VIRTUAL AND AUGMENTED REALITY
Introduction to the Network Society

The development and penetration of Internet connectivity among global users—be it using a computer,
tablet, or smartphone—has given rise to a new era that Castells (2006) has called the Network Society.
This new society utilizes Information and Communication Technologies (CITs) to transform the social and
economic environment and generate a wave of profound technical innovation. This transformation has led to
use of technological media in both professional and domestic settings, being exploited as mass social
communication media as well as tools for improving productivity and competitiveness.
Adoption of these technologies linked to software, hardware, and internet, has also brought about dramatic
change in throughout the entertainment industry, ranging from music to television, and eventually to
videogames—1998 saw the introduction of network play, or online multiplayer functions, which according to
Lafrance (2003), triggered the proliferation of online competition between players from all over the world.
The popularization of online gaming in recent years has transcended traditional concepts of entertainment
and introduced a new cultural dimension that fosters communities of players, teams, and supporters that are
brought together by highly competitive digital tournaments. The success of these tournaments has not gone
unnoticed by large transnational companies, which have begun to show great interest in organizing, sponsoring,
and broadcasting these events.
According to SuperData’s annual report, interactive entertainment, which includes videogames, generated
120.1 billion USD in 2019.1 This underscores the rapid emergence of eSports, which turns digital tournaments
into social phenomena that create a sense of belonging among millions of people throughout the world, and is
now a strategic market with a value of nearly 1 billion USD.
Also, free-to-play games revenue increased by 6% to $87.1B in 2019. Mobile games accounted for 6 of
the top 10 free-to-play titles in 2019. Table 1 shows the top free-to-play games by revenue in 2019.
Table 1
Top Free-to-Play Games by Revenue (2019)
Ranking Title Publisher Revenue
1 Fortnite Epic Games $1.8B
2 Dungeon Fighter Online Nexon $1.6B
3 Honour of Kings Tencent $1.6B
4 League of Legends Riot Games $1.5B
5 Candy Crush Saga KING Digital Entertainment $1.5B
6 Pokémon GO NianIc, Inc. $1.4B
7 Crossfire SmileGate $1.4B
8 Fate/Grand Order Aniplex Inc. $1.2B
9 Game for Peace Tencent $1.2B
10 Last Shelter: Survival Long Tech/im30.net $1.1B
Source: SuperData Digital Games and Interactive Media Year in Review (2019).
Premium games revenue declined 5% to $18.9B in 2019. Lower premium game earnings in 2019 were the
result of fewer blockbuster game releases than in 2018. Table 2 presents the top premium PC and console
games by revenues.
1
SuperData Digital Games and Interactive Media Year in Review-2019 (SuperData, 2020).

ANALYZING THE IMPACT OF VIRTUAL AND AUGMENTED REALITY 39
Table 2
Top Premium PC and Console Games by Revenue (2019)
Ranking Title Publisher Revenue
1 FIFA 19 Electronic Arts, Inc $786M
2 Call of Duty: Modern Warfare Activision Blizzard, Inc. $645M
3 Grand Theft Auto V Take Two Interactive Software, Inc $595M
4 FIFA 20 Electronic Arts, Inc $504M
5 Call of Duty: Black Ops IIII Activision Blizzard, Inc. $487M
6 NBA 2K19 Take Two Interactive Software, Inc $370M
7 Tom Clancy’s The Division 2 Ubisoft $370M
8 Tom Clancy’s Rainbow Six: Siege Ubisoft $358M
9 Borderlands 3 Take Two Interactive Software, Inc $329M
10 Sims 4 Electronic Arts, Inc $311M
Source: SuperData Digital Games and Interactive Media Year in Review (2019).
Methodology
The methodology employed in this study is descriptive-qualitative. First, it proposes a conceptual
framework that classifies the main actors, the ways of participating in a competition, the milestones for growth
in the eSports market, and its social and economic reach. Then it will analyze the uses and applications virtual
and augmented reality could have in the eSports industry using concrete examples for both technologies—for
this, we have selected cases studies of companies operating in the eSports sector. Finally, the study concludes
by presenting a hypothetical future in which we believe the combination of spectacle and immersive experience
will detonate the future success of the eSports ecosystem.
The conceptual framework focuses on reviewing and updating the context around eSports, and in
predicting the impact of a future scenario in which this phenomenon is combined with immersive technologies
such as virtual reality and augmented reality.
Later, the methodology used multiple case studies from a descriptive-qualitative perspective. These case
studies allow us to analyze companies and specific technological developments, whose results are certain only
in those cases in particular. Through this methodological process we will obtain a more complete perception of
the market by studying it as a holistic entity, whose attributes are only understood in the context of all of its
factors. To achieve this, we must study the industry as a whole.
For this purpose, we present descriptions, interpretations, and proposals of change oriented to produce a
theoretical contribution of inductive order that allows explaining complex causal relations, analyzing
longitudinal processes of change, generating theories from the study of the factors that influence the behaviors
of the actors, and understanding the repercussions of the economic and social context in which this
phenomenon emerges.
Among the questions that we seek to explore in this research are:
y Who are the main actors in the industry and how are they related?
y What are the forms of participation in a competition of this nature?
y What have been the milestones in the growth of this market and what is its current economic and social
scope?
y What are the uses and applications that virtual reality and augmented reality could have in this area?

y What business precedents exist for both technologies in this market?

y What could be the hypothetical results of a successful combination of virtual reality and augmented
reality?
Together with the above questions, three theories will be raised on how e-Sports could evolve to achieve
significant and long-term growth under criteria of inclusion, sustainability, and profitability:
(1) To adapt the business model of the industry to increase the levels of professionalism and
competitiveness through adding flexibility to the role currently played by publishers.
(2) To grow the specular that provides the entertainment to promote an ecosystem of startups focused on
the permanent innovation of the gaming experience.
(3) To evolve the current structure of the industry to facilitate the introduction of new, plural, and
heterogeneous actors that could expand e-Sports to other business categories.
These theories will be detailed as complementary recommendations by the authors to channel the growth
and expansion of this phenomenon. For this research’s initial approach, we offer a first hypothesis about what
eSports should do:
y Become more spectacular to attract a wider and more diverse set of actors.
y Evolve the business model, altering the current structure to facilitate introduction of virtual and augmented
reality.
Conceptual Framework
The eSports Phenomenon
The term eSports (also known as competitive gaming, organized play, e-gaming or pro-gaming) is a
contraction that combines the words electronic and sports. This compound word describes the world
of competitive and organized gaming in the language of conventional sport—one made up of players and
teams competing against one another in well-known videogames, and followed by millions of fans around
the world that watch events in person or through online streams and broadcasts. Hamiri (2015) describes
eSports as: “A form of sport where the main aspects of the sports are facilitated by electronic systems; the
input from players and teams, as well as the output of eSports systems is mediated by man-machine
interfaces.”
Wagner (2006, p. 4) emphasizes the competitive nature of eSports, as they are: “eSports is an area of sport
activities in which people develop and train mental or physical abilities in the use of information and
communication technologies.”
It is worth noting that not all videogames can be considered electronic sports, as they must meet a series of
specific conditions:2
(1) The game makes possible a direct competition between two or more participants.
(2) Players compete on an even playing field, with victory determined by the skill and dexterity of the
competitors.
(3) There are leagues, tournaments, and official competitions with professional players and teams that
participate under formal rules.
2
From Juan Casanova’s description in ¿Qué son los deportes electrónicos? (AS, 06/04/2018) as well as Bárbara Gimeno’s¿Qué
requisitos debe cumplir un videojuego para ser un e-Sport? (eSports unlocked,15/01/2018).
www.esportsunlocked.com/especiales/que-hace-falta-para-que-un-juego-sea-esports.

(4) It is a popular competition with an ample group of players, and there is interest from traditional and
alternative media in broadcasting the event.
(5) It involves physical and mental preparation, promoting the values of sportsmanship and personal
improvement.
Among the most important videogames that comply with the above requirements are those involving
roleplaying, shooter scenarios, cards, and sports simulations. Table 3 presents the most recognized eSports
games.
Table 3
Most Recognized Videogames in the eSports Ecosystem
Launch Title Publisher Category
1993 FIFA EA Sports Soccer
2001 Pro Evolution Soccer Konami Soccer
2009 League of Legends Riot Games Multiplayer Online Battle Arena (MOBA)
2012 Counter-Strike: Global Offensive Valve Corporation First-Person Shooter (FPS)
2013 D.O.T.A. 2 Valve Corporation Multiplayer Online Battle Arena (MOBA)
2014 Hearthstone: Heroes of Warcraft Blizzard Entertainment Online Collectible Card
2016 Overwatch Blizzard Entertainment First-Person Shooter (FPS)
2017 Fortnite Epic Games Battle Royale
Source: Developed by the authors.
In this market’s value chain we find a group of actors that generate synergies and give purpose to the
functioning of the eSports ecosystem. Below we offer a brief description of each of the principal actors:
Players: There are at least three relevant categories of gamers in the context of eSports, according to their
behavior and level of play:
y Casual: This describes the vast majority of players and the main audience of eSports tournaments. They
are sufficiently enthusiastic to be deeply interested in eSports, yet they lack the dedication or ability to compete
in organized tournaments.
y Streamers/entertainers: These are high-performance gamers that focus on the social aspect of eSports, and
often have their own channels on various streaming platforms through which to reach their audiences. Although
they typically have a much higher skill level than casual players, their main goal is not to compete in formal
tournaments, but to provide entertainment. This means that many streamers perform in-game maneuvers that
are not ideal from a purely tactical standpoint, but that are flashier and aimed at entertaining their followers.
Streamers generate revenue according to the size of their audiences, making use of the monetization tools
they provide (advertising, subscriptions, donations, etc.). They also generate revenue from direct sponsorships,
as they are generally influencers with strong personal brands that are attractive to teams, sponsors, and
followers.
y Professionals: These are gamers that participate in formal tournaments. Much like streamers, they are
influencers. Their focus is solely on competitive gaming, leaving aside flashy maneuvers in favor of tactical
effectiveness. The main source of income for this group comes from prize money earned in tournaments,
followed by direct (to individuals) and indirect (given to the teams they play for) sponsorships. One such gamer
is the South Korean Lee Sang Hyeok(alias “Faker”), who is not only the most recognized and formidable
League of Legends player, but the most accomplished gamer in the history of eSports.

42 ANA
ALYZING TH
HE IMPACT OF VIRTUA
AL AND AUG
GMENTED R
REALITY
Interaaction between streamers anda professionals categories is constantt and fluid: m many professiionals begin
their careerrs as streameers, until proffessional team
ms discover th
hem. It is alsoo common foor professionaals to act as
streamers outside
o of thee bounds of formal
fo tournaaments, althou
ugh this dualiity is not pressent always, and when it
is, they typpically occur in ure 1 shows thhe eSports value chain.
i separate annd distinct mooments. Figu
Fiigure 1. eSportss value chain. Source:

S MTG.coom.
Sportts Clubs: MuchM like connventional spports, eSportts features clubs that haave teams co ompeting in
organized games. Thesee clubs are always on thee lookout for new gamers,, as well as w ways to generrate interest
among speectators and spponsors. Onee successful example
e is the U.S. club FaZe
F Clan, w
which competes in games
like Call of Duty, Coounter-Strike: Global Offfensive, Oveerwatch, PlaayerUnknownn’s Battlegro ounds, Tom
Clancy’s Rainbow
R Six: Siege and FIIFA, as well as a other teamms that are forrging their ow
wn reputation ns like Team
Solo-Mid (TSM).
( Therre are also exxisting majorr traditional sports clubs that are opeening their own eSports
divisions, like
l soccer cluubs FC Barceelona, PSG, Borussia
B Dorttmund, AS Monaco,
M and S
Shalke 04.
Publishers: A nottable distincttion between eSports and traditional sports is the w way ownersh hip over the
sports prodduct itself is structured. Inn traditional sports,
s the gaame’s rules do
d not have aan owner as such.s In the
case of eSpports there is an exclusivee title-holder for the game, both its inteernal (actions, fields, norm ms, etc.) and
external ellements (organization, offficiating…). The compan ny with excllusive title tto a game iss called the
Publisher, organizer or developer. Among
A the moost importantt publishers are:
a Riot Gam mes, Activision, Blizzard,
Epic Gamees, EA Sportss, Ubisoft, Caapcom, Valvee, and Hi-Rezz Studios.
Sponssors: There area two types of sponsors in eSports: en ndemic and non-endemic.
n . The first is brands
b with
a direct relationship to gaming
g (gam
me and hardwaare developerrs, and internnet operators),, while the seecond group
is made upp of companiees from all inddustries that are
a interested d in the targett audience.
An exxample of an endemic spoonsorship wouuld be the paartnership bettween Dell annd Team Liqu uid—one of
the best gaaming teams in the worldd—in outfittiing an 8,000 0 square foot building in Los Angeless called the

Alienware eSports Training Facility. The facility features gym equipment, administrators, private chefs, sports
psychologists, nutritionists, and of course dozens of high-performance computers. 3 An example of a
non-endemic sponsorship would be the Virtual LaLiga eSports, a FIFA 19 competition in Spain.
Broadcasters: In recent years, eSports have become a social phenomenon boosted by networks like the
BBC, OSN, SporTV, and Super Channel, as well as online streaming platforms like Twitch (owned by Amazon)
and YouTube (owned by Google). This content is most popular among the millennial generation, and
particularly among young males. The audience for gaming video content (GVC) grew by 5% to reach 944M
people in 2019. Thanks to more robust monetization offerings, Twitch generated more revenue in 2019 than
YouTube ($1.54B vs. $1.46B) despite a much smaller audience4. The role of streaming platforms goes beyond
simple diffusion by making the life of a streamer economically viable, as they can create revenue using the
monetization tools available through these platforms. Twitch in particular has stood out thanks to the
introduction of Cheers, subscriptions, and integration with Amazon Prime.
Spectators: These are the millions of people that watch tournaments and competitions via conventional
media or online. eSports have attracted a considerable following in the U.S., China, and South Korea, where
gamers and clubs are gaining more attention through the work of broadcasters.
Tournaments are organized differently depending on the publisher, organizer, or developer. To understand
the functional methodology we can look to the system5 employed by the Electronic Sports League (ESL),
which defines three levels of competition:
Level 1: Open Cups
These are weekly, independent competitions through which players earn points. Accumulated points give
players the option at the end of each month to collect a prize (not necessarily monetary). These competitions
are not broadcast and are only available online.
Level 2: ESL Major
These are weekly online competitions that are broadcast. There are also points gained for each cup won,
and a weekly ranking is established. In some cases money prizes are awarded.
Level 3: ESL Pro
These are professional competitions presented in two formats:
League: This is a regular eight-team league from which six teams qualify for playoffs. The bottom two
teams play a “Relegation Phase” against the top two teams of the second division for their spots in the first
division. All games are broadcast and playoff competitions are played face-to-face.
Classic: This is a previous qualification tournament where the best eight compete in the final phase. All
games are broadcast and the finals are played face-to-face.
Origen and Evolution of the eSports Industry

It is difficult to establish a specific moment in which eSports were born, but according to Hiltscher and
Schölz (2017), that moment was October 19, 1972 in California and involved the game Spacewar! That year,
3
Esports get serious: Alienware, top team partner on training sites (CNET.com, January 9, 2018),
www.cnet.com/news/esports-alienware-team-liquid-partner-on-training-sites).
4
SuperData Digital Games and Interactive Media Year in Review, 2019 (Nielsen, 2020).
5
Information obtained from the ESL website (www.eslgaming.com).

Stanford University students were invited to the “Intergalactic Spacewar Olympics,” where they would face off
to win a subscription to Rolling Stone magazine.
In 1980, Atari organized the Space Invaders Championship in New York City for more than 4,000
participants.6 This was the first event to attract a sizable, heterogeneous group of players with the purpose of
competing in an established tournament with formal rules.
In the 1990s, Nintendo organized a number of events like the Nintendo World Championship and
Nintendo PowerFest, with small competitions in a number of cities across the U.S. and Canada, the winners of
which would compete in a national tournament. Around that same time, Blizzard Entertainment (Videogame
Company and creator of StarCraft) began organizing tournaments among enthusiasts in South Korea, taking
advantage of the PC Bangs (cybercafés) as meeting points. From this effort sprung numerous teams and online
competitions.
The real boom in this market occurred in 1997 with the creation of the Cyberathlete Professional League
(CPL), which was the first organization dedicated solely to developing eSports tournaments. This was followed
by the German-based Electronic Sports League (ESL), which soon became the largest eSports organizer and
producer in the world.
The industry’s rise did not go unnoticed by large corporations. For example, in 2015 Swedish
entertainment company Modern Times Group (MTG) acquired ESL for 78 million euro (86.3 million USD), by
which it obtained a majority stake of 74%.7 In 2016, Spanish communications group Mediapro, paid 4.6
million euro for a majority stake in Fandroid, owner of the Liga de VideojuegosProfesional (LVP), a hugely
popular competition in Europe.8
Another milestone occurred in Asia in the year 2000 with the creation of the eSports organization World
Cyber Games (WCG). Sponsored by Samsung and the South Korean Ministry of Culture, Sport, and Tourism,
WGC was meant to be an annual international tournament, and its creation sparked widespread interest in
eSports throughout all of Asia. This new popularity became evident when on November 18, 2003, the General
Administration of Sport in China formally approved eSports as sport number 99 in their official sports program
for the People’s Republic of China.
Implicit recognition of eSports as a sport occurred in the U.S. in 2013, when Canadian Danny Le (known
as “Shiphtur”) became the first professional League of Legends gamer to receive a U.S. P-1A visa, reserved for
internationally recognized athletes.9 The meteoric rise of eSports attracted the attention of large traditional
sports teams, which led to the creation of the NBA 2K eSports League (a professional videogame league in
6
Sources differ on the number of attendees at this event. Some claim 10,000 attended, while others cite 4,000. We are inclined to
cite the 4,000 figures as it comes from a reputable source printed nearer the date of the event in question: 4,000 line up to join
battle against electronic invader, New York Times (June 30, 1981). www.nytimes.com/1981/06/30/nyregion/4000-line-up-to-join
-battle-against-electronic-invader.html.
7
La televisión apuesta por los eSports: Modern Times Group compra la liga de videojuegos ESL por 78 millones
(elEconomista.es, June 2, 2015). www.eleconomista.es/tecnologia-videojuegos/noticias/6839711/07/15/La-television-apuesta-por-
los-eSports-Modern-Times-Group-compra-la-liga-ESL-por-78-millones.html.
8
Mediapro apuesta por los eSports: compra la LVP por 4,6 millones y crea la mayor liga europea (elEconomista.es, October 6,
2016).
www.eleconomista.es/negocio-digital/noticias/7874937/10/16/Mediapro-apuesta-por-los-eSports-se-alia-con-Fandroid-para-crear-
la-mayor-liga-europea.html.
9
Online game League of Legends star gets U.S. visa as pro athlete (Los Angeles Times, August 7, 2013).
www.articles.latimes.com/2013/aug/07/business/la-fi-online-gamers-20130808).

which 17 NBA franchises participate)10 in 2017.

On February 27, 2018, FC Barcelona signed an agreement with eFootball.Pro and KONAMI to participate
in the first edition of the eFootball. Pro League along with other major European soccer clubs like AS Monaco
and FC Shalke 0411.
The clamor generated by eSports has spawned discussion in many sectors about their inclusion as an
Olympic sport. At the Olympic Esports Forum held in July of 2018 in Lausanne Switzerland, members of the
International Olympic Committee (IOC) and the Global Association of International Sports Federations
(GAISF) announced the creation of a special eSports group. IOC delegates showed interest in approaching this
market, but underscored that there is still no unanimous decision about their inclusion—the gratuitous violence
of some videogames was a particular sticking point for some members.
Whether or not eSports are included in the Olympic Games, the mere creation of a special group under the
auspices of the IOC provides global legitimacy and suggests a bright future for this young movement. Exhibit 1
presents a list of milestones in the formalization of eSports in various countries.
Territorial Reach, Economic Dimensions, and New Consumption Patterns
According to Newzoo consultancy, 588 large eSports events took place in 2017 and generated $59 million
USD in ticket sales. 12 $5.5 million USD alone was generated during the League of Legends World
Championship, which attracted more than 80 million viewers worldwide.13 Newzoo also predicts that eSports
revenues will reach $906 million USD in 2018, and $1.6 billion USD by 2021 (See Figure 2).
This market has become very lucrative, not only for gamers, but also for videogame producers and brands.
Unlike traditional athletes, gamers can generate considerable income in a short amount of time, given that large
tournaments give out millions of dollars in prize money that is usually divided among the players on a winning
team. The teams and the producers see a share of ticket sales, merchandising, and television and advertising
rights. Epic Games’ Fortnite 2018 World Cup is expected to break records, as it already has more than 125
million registered players and a purse of $100 million USD.14
The exponential growth of the eSports market is sustained by the intense interest shown by sponsors. More
than 600 sponsorship agreements have been signed worldwide since the beginning of 2016, the majority by
brands within the sector, such as technology, software, or CITs (360). Brands outside the sector—like retail
10
Participating franchises were: Boston Celtics, Cleveland Cavaliers, Dallas Mavericks, Detroit Pistons, Golden State Warriors,
Indiana Pacers, Memphis Grizzlies, Miami Heat, Milwaukee Bucks, New York Knicks, Orlando Magic, Philadelphia 76ers,
Portland Trail Blazers, Sacramento Kings, Toronto Raptors, Utah Jazz and Washington Wizards. In its first edition the En Los
Angeles Lakers, Los Angeles Clippers, and the Chicago Bulls did not participate. La NBA 2K e-Sports League: 17 equipos del
mejor baloncesto (Marca, August 9, 2017). www.esports.marca.com/mas-esports/nba-2k-esports-league.html.
11
Statement from F.C. Barcelona Vice-President of Marketing and Communication, Manuel Arroyo: “Barça is attentive to what
is happening in this global and technological world, and given the major penetration and growth of eSports, is on the path to also
becoming a leader in this field. FC Barcelona, in keeping with its innovative spirit, has decided to participate in a pioneering
competition in the world of eSports, alongside the finest partners, KONAMI and eFootball.Pro. We are sure that this competition
will continue to make Barça members and fans that follow eSports around the world very proud.” (Official F.C.Barcelona
Announcement, February 27, 2018). www.efe.com/efe/espana/en-detalle/el-barcelona-se-adentra-en-los-esports-de-la-mano-gerar
d-pique/50000571-3541552.
12
2018 Global Esports Market Report (Newzoo, marzo 2018).
13
Information taken from League of Legends website, property of Riot Games (www.lolesports.com/en_US/articles/2017-events-
by-the-numbers) and the article: What is eSports? A look at an explosive billion-dollar industry. (CNN, August 27, 2018).
www.edition.cnn.com/2018/08/27/us/esports-what-is-video-game-professional-league-madden-trnd/index.html
14
Fortnite now boasts 125 million users—teases $100 million Fortnite World Cup (TechRadar, June 13, 2018).
www.techradar.com/news/fortnite-now-boasts-125-million-users-teases-dollar100-million-fortnite-world-cup.

46 ANA
ALYZING TH
HE IMPACT OF VIRTUA
AL AND AUG
GMENTED R
REALITY
(100), nonn-alcoholic beverages (moore than 50)), and onlinee services (m more than 400)—also had significant
155
presence. A breakdow wn of growth in eSports byy category forr 2017 can bee found in Figgure 3.
MILLIONS OF DOLLARS
$1,650
$2,000
$1,500 $906
$655
$1,000 $493
$500
$0
2016 2017 2018 2021
Fiigure 2. Globall eSports revenuue growth estim

mates. Source: 2018
2 Global Espports Market Report by Newzo
oo.
100%
Mercchandising and ticket
t sales
90%
80% Broaddcast rights
70% Publiishers' rights liccensing
60% Publiicity
50%
Sponnsorships
40%
30%
20%
10%
0%
Figure 3. Distribution
D by revenue
r categorry for global eS
Sports in 2017. Source: 2018 Global
G Esports M
Market Report by Newzoo.
The eppicenter of thhis activity iss not only in the U.S., but has expandeed very succeessfully to Assia, where it
is followedd very closelly on Twitch (a streamingg platform sp pecializing inn videogamess through wh hich eSports
reach millions of peoplee). Figure 4 shhows the terrritorial distrib
bution of worldwide revennue.
Beyonnd this markeet’s media innfluence and economic dy ynamism, it is important tto also mentiion some of
the repercuussions of its consumptionn habits it impplies. eSportss transform viideogames innto a formal and
a material
competitionn, with ruless, rankings, teams,
t prizes, grand evennts, spectatorss, live broadcasts, and ev
ven training
routines invvolving menttal and physiccal preparatioon. This turnss a simple enttertainment innto a professional career
built on meedia presencee and the ecoonomic impacct of its main n protagonistss, through whhich the gameer begins to
emulate thee elite sports star. Exhibit 2 presents a list
l of the mo ost important tournaments of 2017.
15
Informatioon from reportss: 2017 Global Esports
E Markett Report (Newzzoo) and The Niielsen’s eSportss Playbook 2017 (Nielsen).

ANA
ALYZING TH
HE IMPACT OF VIRTUA
AL AND AUG
GMENTED R
REALITY 47
Syneergies Betw
ween eSports and Virttual & Auggmented Reeality
Two important
i asppects can be explored
e by analyzing
a thee synergies beetween virtuaal reality and augmented
reality:
(1) Sppace for develloping new games,
g be theyy evolutions ofo existing gaames or totallly new formaats.
(2) Toool(s) for impproving the consumption
c o eSports co
of ontent, be theey immersive games or no ot. Here it is
important tot separate thhe applicationn of virtual reaality and augm mented realitty in the worlld of videogammes.
Virtuaal reality (VRR) allows thee spectator too see gaming events in peerson from reemote locatio ons, while it
provides gamers with a new form of o vision and experience. Augmented reality r (AR) is used to inttegrate data
and informmation into thee game alreaddy visible to thet spectator, or to turn a game into a ssport, and theereby create
a communiity of playerss. Based on esstimates from m IDC, growth h predictions for virtual annd augmented d reality are
encouraginng. Global revvenues for thhis market aree expected to o increase from $5.2 millioon in 2016 to o more than
16
$162 millioon in 2020, which
w represennts a compouunded annual growth rate (CAGR)
( of 181.3%.
The market
m for deevices for booth VR and AR A is expectted to reach 13.7 units ssold, while fo or 2021 the
17
estimate grrows to 81.2 million—a
m CAGR of 56.1%.
Mobille AR game earnings rosse 12% in 20019 with Pokémon GO dominating d tthe segment. VR games
18
revenue rose by 41% duuring 2019, mainly
m due to the arrival off the Oculus Quest
Q .
South Korea
6%
China
C
18%
North Am
merica
38%
%
Rest of the World

W
38%
Figurre 4. Global terrritorial distributtion of eSports revenue. Sourcce: 2018 Globall Esports Markeet Report by Neewzoo.
Businness opportunnities in a market

m experriencing this kind of hyppergrowth arre obvious. When W such
potential iss combined with
w the rise of eSports discussed
d abo
ove, it has thee opportunityy to create diisruption of
massive prroportions—nnot only in thhe videogamee market, but also in the enntire entertainnment industrry. Because
it is importtant to analyzze this possibble integratioon with a focu
us on currentt experiencess and future projects,
p we
will examinne two speciffic cases.
16
Worldwidde Semiannual Augmented
A andd Virtual Realitty Spending Gu
uide (IDC, 20177).
17
Worldwidde Quarterly Auugmented and Virtual
V Reality Headset
H Trackeer (IDC, 2017).
18
SuperDataa Digital Gamees and Interactivve Media Year in Review, 2019 (Nielsen, 20220).

Furthermore, there is a strong synergy in the type of audiences in which both industries have penetration:
factors like tech savviness, owning gaming equipment, and interest in videogames in general, all make the
intersection between these industries naturally strong. There is also the fact that we find many repeat actors on
the offer side of both markets (e.g. Valve, Epic Games, Microsoft).
Analysis of eSport Case Studies
In this section we will analyze cases of representative eSports companies.
Virtual Reality Game Companies
RIGS. One of the first efforts to integrate videogames and virtual reality was the RIGS Mechanized
Combat League, developed in 2016 by Guerrilla Cambridge and distributed by Sony for PlayStation VR. The
game was configured as a mix of first-person shooter (FPS) and a sports format with characteristics similar to
basketball. The point of the game was to accomplish a series of missions using a group of giant robots that
engage each other in three-on-three combat.19
RIGS Mechanized Combat League quickly put through its paces in the eSports market with a number of
tournaments taking place in Japan, which demonstrated the enormous advantages this new modality offered for
publishers20.
Beginning with this project, a number of technical challenges arose for VR videogame programmers.
These mostly had to do with improving usability and competitiveness between players and teams, some
examples of which are:
Presentation of information and statistics: Two-dimensional menus do not function in a VR ecosystem.
indicators, cursors, and interfaces must be integrated into the scenery, organizing and classifying data in three
dimensions so that players and teams can make decisions more efficiently.
Sensation of immersion: Perspective is crucial in the VR environment and it is necessary to present
realistic points of view: for example, a player must be able to see the chassis of a car or the facade of a house
before entering them, or be able to perceive the depth of a street when looking down it and sensing the amount
of distance travelled on foot while preserving horizons and densities. Therefore, recreating the process of
reality in first person through movement and control of the character is fundamental if the player is to
completely identify with the game. This environment must also create tension and competition without causing
nausea and visual fatigue for participants.
Positional audio: The sensation of interacting with an object, passing through a scene, or carrying out any
specific activity is critical if the player is to be immersed totally in the game. As such, developers must
introduce more and better sounds that establish nuances like distance and intensity, projecting audio based on
19
Piers Jackson, head of game development at Guerrilla Cambridge, described the process of creating a game thusly, “Being an
external study, we had long embraced the idea of Virtual Reality, and we were thinking of developing a first-person shooter but
finally decided to do something unique in VR, a new experience. We basically fused the combat of a first-person shooter with
sports, and that is how RIGS came about. We felt it fit perfectly with PlayStation VR because it was an innovative and attractive
game for players. It was also a perfect challenge for a study like ours. There are a lot of games that have “twists, but in all of them
the machines are like tanks, and from the very beginning we decided that in RIGS we wanted the robots to be like Formula 1 cars.”
(interview by Nacho Castañón for Alfabetajuego, December 20, 2016).
www.alfabetajuega.com/noticia/piers-jackson-el-futuro-de-guerrilla-para-la-realidad-virtual-es-seguir-trabajando-en-rigs-n-77601.
20
Hermen Hulst, director and founder of Guerrilla Games, confirmed “We had a few eSports teams playing RIGS on a stage in
Tokyo and the emotion there was incredible. It is the type of game that fits perfectly with this kind of competitiveness.” (interview
by Alex CD for Vida Extra, October 8, 2016). www.vidaextra.com/entrevistas/la-realidad-virtual-ha-venido-para-quedarse-entrev
istamos-a-hermen-hulst-director-y-fundador-de-guerrilla-games.

positional factors.
DOTA VR Hub21. In 2016, Valve (developer of both the popular DOTA 2 game and the Vive VR headset)
launched a special VR spectator mode called DOTA VR Hub, as a Downloadable Content (DLC) of the game.
Many of the aspects discussed in the case above are addressed in this experience.
Feeling of immersion: DOTA VR Hub starts by using the traditional perspective of spectator mode to
provide a sense of familiarity for players. There is also the option to “enter” the world of the game. This
perspective increases the sensation of immersion at the cost of limiting the game’s original perspective. The
user can switch between both types of perspective at any time.
Presentation of information and statistics: Thanks to the decision to provide a choice between perspectives,
DOTA VR Hub makes complete use of virtual space while using a “traditional” perspective to view the game.
This consists of showing complete game statistics with the details of each individual player. Normally,
presenting that much information at the same time would be overwhelming for a spectator. Sharing it in the
virtual space, however, makes it much more accessible. Valve’s proposal is a combination of floating panels
and 3-D models of each character.
DOTA VR Hub is notable because it represents a significant effort on the part of a publisher to improve
the consumer experience of an already existing eSport using VR. A limiting factor for this chaotic type of game
in particular is the need for high-level gaming teams to enjoy the experience.
Virtual Reality and Video Streaming Companies
Sliver.tv and YBVR. These two companies have proposed, at different times, utilizing video streaming
technology in virtual reality to improve the eSports experience, and eliminating the need for expensive,
high-performance equipment.
The proposal calls for combining the perspective of the various players into one immersive video (of 360
or 180 degrees), and transmitting it as a single video that can be accessed on any device with an Internet
connection. Like a VR backdrop, it could be a 360 degree video or a virtual camera inside the game itself,
depending on the possibilities programmed by the publisher.
Sliver.tv has produced a pilot for their proposal with the game CS: GO, and YBVR with Fortnite. Both
companies promise to provide any eSport with the opportunity to be a completely immersive experience.
Augmented Reality and Techno Sports Companies
MELEAP—Hado. In 2016, the Japanese company Meleap presented Hado, the first physical activity
augmented reality game based on firing simulated balls of energy. The print media dubbed this new activity
techno sport.22
Hado only requires a smartphone, a movement sensor, and augmented reality to allow users to run, jump,
and move within a field of play. The team that gains the most points during a determined period is the winner.
The game has been so successful that the Hado World Cup has been held since 2016, and attracts competitors
from various countries—in 2018 will feature a winning prize of $120,000 USD.
The case of Hado shows that eSport competitions can be developed without access to large and expensive
21
Spectating Dota 2 in VR is amazing, watch it in action (Polygon, July 29, 2016).
www.polygon.com/2016/7/29/12325418/dota-2-vr-valve-vive.
22
Japanese AR Phenomenon HADO Holding Their Second World Cup (Gamehubs, October 11, 2017).
www.gamehubs.com/article.php?id=japanese-ar-phenomenon-hado-holding-their-second-world-cup.

devices or games with advanced graphics. It also presents new ways to create compatibility with current games
and those that incorporate virtual reality, and provides more technological impact by adding additional
playability. AR also received quite a boost from Apple’s 2017 launch of the ARkit app, which allows users to
easily create AR experiences through iPhone and iPad23.
Designing the Future of eSports

It would be foolish to ignore the opportunity inherent in the successful merging of AR and VR with
eSports. However, there are certain considerations that link the successful construction of this emerging market
with its ability to attract diverse audiences, and an evolution of the business model centered on immersive
technologies.
Advancing Toward More Spectacle
eSports have become a viral phenomenon that attracts followers around the world through expanding
media exposure. The industry has become more prosperous as it migrates away from a specialized sphere of
hardcore gamers and is marketed toward a more diverse public. We agree with Morse’s (2003) suggestion that
the economic success of this activity will be based on its ability to deploy a strategy of increasing showmanship
throughout the industry. This implies adopting the same commercial sponsors and the same audio-visual
aesthetic enjoyed by the majority of conventional sports.
Considering the current ecosystem and the pretensions of the relevant actors, we estimate that to increase
the spectacle of eSports, the industry must focus on three main objectives:
y Decentralization of the business model dominated by Publishers;
y Permanent innovation through startups that renew the experience;
y Expanding the phenomenon to other categories of actors.
Below we expand on the details of each objective:
Decentralizing the Business Model Dominated by Publishers
The coming years will see a decrease in the importance of publishers, whose role will be progressively
reduced by the decentralization of revenues in the market. This will be mirrored by an increasing role for
sponsors and broadcasters, as they invest more and more in image, content, and broadcasting rights,
reproducing the environment that exists in many traditional sports leagues.
Currently, publishers own most of the rights to eSports events, but only a small number of these have
evolved toward a more flexible business model. This blocks significant changes to conceptions of intellectual
property and other such issues that are indispensible in overcoming current legal limitations.
On the part of broadcasters, platforms like Amazon’s Twitch and Google’s YouTube Gaming seek to
maintain their predominant position. However, other media giants are making waves—for example Facebook’s
alliance with ESL24, and the menacing presence of content-hungry global competitors like HBO, Disney, Hulu,
and Netflix, and regional actors like Movistar and Blim in Spain and Mexico.
23
Apple se lanza a la realidad aumentada con ARKit (CNET, June 5, 2017).
www.cnet.com/es/noticias/apple-realidad-aumentada-wwdc-2017)。
24
ESL announced on January 18, 2018 that it would broadcast two major videogame competitions exclusively on Facebook Live,
and a weekly program on Dota on Facebook Watch. Facebook and ESL have agreed to bring 5,000 hours of content to the social
media network (Facebook será el hogarexclusivo de dos grandestorneos de ‘eSports’, CNET, January 18, 2018).
www.cnet.com/es/noticias/facebook-watch-torneos-esports.

Permanent Innovation Through Startups That Renew the Experience

The combination of VR and AR with eSports presents opportunities for complementary business through
the development of platforms and new devices (gadgets). An exciting network of startups is starting to grow
around these platforms and gadgets, lending a new level of creativity and innovation to the market. These
entrepreneurs are orienting their ideas toward the continual renovation of this type of entertainment, and taking
advantage of the more fertile ground of eSports—with stricter and more rigid schemes, traditional sports are not
as prone to welcoming novel ideas and innovation.25
Some examples of these novel products are micro-fluid technology gloves that situate players in three
dimensional environments, full-body suits that function like a second skin and capture and translate movements
with thermal control, platforms that accelerate distribution and player winnings using blockchain, or artificial
intelligence used to analyze sponsor profitability.
Table 4 shows a sample of disruptive startups entering the eSports business. These companies will
contribute greatly to growing this market while at the same time making the entire ecosystem more dynamic.
This will help promote greater connection between sports clubs, publishers, and investors through competitions,
grants, and meetings that allow for more access to funding.
Table 4
Disruptive Startups in the eSports Industry
Startup Country Activity
HaptX Inc United States Producing gloves using micro-fluid technology
Tesla Suit United States Whole-body suits with thermal control
Razer United States Development of products for gamers
Bountie Singapore Blockchain monetization platform
DreamTeam Singapore Blockchain payment gateway
Unikrn Singapore Platform for betting and sale/purchase of sports clubs with blockchain
Blinkfire Spain Intelligence and artificial vision technology for real-time analysis by eSports sponsors
Streamloots Spain Tool to unite streamers and spectators in an entertaining fashion
Pixel Esports Club Mexico Improves professionalization of videogame competitions
Expanding the eSports Phenomenon to Other Categories of Actors

Although at first glance eSports seem bound by a complex system, the truth is that it is still an immature
market with few actors, high concentration, and relative diffusion compared to traditional sports. In order to
take definitive steps in attracting widespread consideration from analogue businesses, it is necessary that new
protagonists enter and fine tune the architecture of this market—adding more value, complexity, and
institutionalization to the competitive nature established by tournaments and sports clubs.
In the near future, it is likely that new relevant actors will spring up in the market. Among these
newcomers may be startup entrepreneurs that regenerate the ecosystem; large investors that want to acquire
sports clubs; agents that help gamers professionalize their careers and make their commercial image more
profitable; physical trainers and sports psychologists that motivate, train, and educate future stars; scouts and
25
In the world of soccer, the great innovation of the past few decades has been the introduction of Video Assistant Referee (VAR),
which allows the referee to refer to game video in four cases of doubt: penalties, ejections, confusion in assigning cards, and goals.
In other sports these changes are usually discussed as an update of the rules.

headhunters that search for talent among gamers and managers from all over the world, collaborating closely
with sports clubs.
It is important to note that all of this supposes that eSports will be considered a target for investment with
the potential for creating wealth; one that is capable of attracting tangible and intangible revenue and creating
new specialized jobs.
Moreover, it is expected that eSports will garner much more attention from journalists, bloggers and other
influencers, creating more content in the form of information and opinion that increases knowledge about this
activity. This will pave the way for the entrance of streamers that want to broadcast games online; insurance
companies that will insure players and clubs; and the proliferation of new curricula at universities and business
schools that take this kind of knowledge into account.26 Finally, there is the potential for duplication, with
recognized sports entities building presence in this new market—as is already happening—and famous
traditional athletes building their “altar egos” as eSports athletes.
Final Reflection
Evolution & Challenges to the Business Model Introducing an Immersive Experience
The open questions surrounding the introduction of virtual reality video games are symptoms common to
any new developing technology. In this case, normal doubts are exacerbated by the speed with which these
games are popularizing among digital natives, the peculiarity of the players and clubs, and by the desire on the
part of spectators and sponsors to be part of this transformative entertainment.
Although the integration of VR and AR with eSports is a forgone conclusion, new patterns of consumption
in the Network Society lead us to believe that this transition will have to go through various stages of
improvement to achieve a profitable, scalable, and synergistic symbiosis.
In spite of their obvious potential, we do not believe that it yet provides a completely innovative or
satisfactory experience. This not only applies to the current principle actors—hungry to build a more aesthetic
and sensitive commercial relationship—but also for those that consider themselves outside of this market.
Among those falling in this segment are: generations older than millennials, centennials, females, persons with
disabilities27, and companies outside of the field of technology.
It must be made clear that, in their current structure, audiences at these kinds of events are only looking at
players that are seated in from of monitors, which makes the product or game more important than the
ecosystem surrounding it. It is, therefore, more of an analogue and static experience than a digital and dynamic
one. This can cause attendees to become bored and even cause the business model to stagnate—turning eSports
into a fleeting fashion or niche hobby.
On the other hand, we believe that it is highly relevant that companies with cash reserves and tech-industry
dominance such as Google, Facebook, Microsoft, Sony or Amazon have shown their interest in competing in
the game streaming service, especially Amazon, who with companies like Twitch, Amazon Game Studios and
26
e-Sports have already arrived at the main universities in the United States, which now offer them as university sports
(www.onlinecollegeplan.com/league-of-legends-esports-gamers). Other academic institutions have begun to give eSports
scholarships for games like League of Legends and Overwatch. In Spain, the first online university dedicated to eSports has been
established: Playeek (www.playeek.com/es/academy).
27
The opportunity to include individuals suffering from physical and mental limitations in eSports is of particular interest, given
their ability to break down barriers and allow their participation in sports in digital space.

Amazon Prime could become a great trigger for the market28.

In our judgment, the opportunity to adequately sustain hypergrowth in this market lies in the introduction
of more immersive technologies. For example, introducing VR would force players to physically move around
the scenery, while spectators—if they choose—can watch the action from inside the game itself. Introducing
AR would allow spectators, sports clubs, and sponsors to interact and communicate with one another, and share
ample and heterogeneous information in real time—this would represent a broad-spectrum marketing
revolution. With this technological leap, eSport could solidify growth with more differentiation, resulting in
more remarkable and profitable events where spectators can enjoy a completely different experience compared
with the standard eSports tournaments.
However,we also expressed scepticism over whether VR would take over eSports, saying the cost and
complexity of the devices could prove prohibitive for many gamers and spectators, as could a lack of
bandwidth.
Despite that the apparent surge of newer, cheaper, and simpler hardware is a cause for optimism in the
long term. It has the potential to place VR and AR technology within reach of a growing number of companies
and individuals, motivating players, clubs, publishers, sponsors, broadcasters, and spectators to diffuse a wide
variety of content, activities, and emotions that strengthen the sense of belonging and interconnectedness
among actors.
What is certain is that it is still difficult to delimit the potential of this new market—its accelerated growth,
the appearance of large brands, and the fervor of investors distorts its true reach, and creates a deceiving
landscape in which certain risks and challenges are hidden, as is the risk that this market is being overestimated.
However, this does not contradict its potential to be a high-impact global industry that, when combined with
AR and VR, could take on a character equal to or more important than traditional sports.
In our opinion, VR and AR could also put an end definitively to the debate about whether eSports can
really be considered a sport, by getting players to be physically active.
References
Adamus, T. (2012). Playing computer games as electronic sport: In search of a theoretical framing for a new research field. In J.
Fromme & A. Unger (Eds.), Computer games and new media cultures: A handbook of digital game studies. Springer.
Carrillo Vera, J. A. (2016). De jugadores a espectadores. La construcción del espectáculo mediático en el contexto de los eSports.
In J. Sánchez-Navarro, A. Planells, V. Navarro, & D. Aranda (Eds.), Juego digital II. Anàlisi. Quaderns de Comunicació i
Cultura, 55.
Carrillo Vera, J. A. (2015). La dimensión social de los videojuegos online: de las comunidades de jugadores a los eSports. Index
Comunicación, 5(1), Universitat Oberta de Catalunya.
Castells, M. (2006). La sociedad red: una visión global. Alianza Editorial.
Castells, M. (2009). Comunicación y poder. Alianza Editorial.
Hamari, J. (2015). What is eSports and why do people watch it? University of Tampere, Game Research Lab, School of
Information Science.
Heinz, J., & Ströh, A. (2017). The eSports market and esports sponsoring. Tectum Wissenschaftsverlag.
Kelly, K. (1993). The first online sports game. Wired Magazine.
Lafrance, J. (2003). El juego interactivo: el primer medio de masas de la era electrónica. Quaderns del CAC, 15.
Li, R. (2017). Good luck have fun: The rise of eSports. Skyhorse Publishing.
28
Amazon took a big step into the gaming industry with the launch of Crucible, a free-to-play online shooter and the company’s
first original big-budget game (https://www.theverge.com/2020/5/5/21246923/amazon-crucible-relentless-studio-free-to-play-laun
ch-date-may-20).

Marquardt, M. (2018). Pioneers in eSports. Norwood House Press.

Miah, A. (2017). Sport 2.0: Transforming sports for a digital world. MIT Press.
Mooney, C. (2017). Inside the eSports industry. Norwood House Press.
Morse, M. (2003). Sport on television. play and replay. In T. Miller (Ed.), Television: Critical concepts in media and cultural
studies (1st ed., Vol. 2). Routledge.
Taylor, T. L. (2012). Raising the stakes: eSports and the professionalization of computer gaming. MIT Press.
Wagner, M. (2006). On the scientific relevance of eSports. Proceedings of the 2006 International Conference on Internet
Computing & Conference on Computer Games Development (ICOMP).
Exhibit 1
Chronology of Important Milestones in the eSports Market
Year Event Organizer/sponsor Territory
1972 Intergalactic Spacewar! Olympics Stanford University students California, U.S.A.
1980 Space Invaders Championship Atari New York, U.S.A
Tour of cities in the U.S.A.
1990 Nintendo World Championship Nintendo
and Canada
Tour of cities in U.S.A. &
1994 Nintendo PowerFest Nintendo
Canada
1997 Cyberathlete Professional League (CPL) Ángel Muñoz Texas, U.S.A
1998 Local StarCraft competitions Blizzard Entertainment South Korea
2000 Electronic Sports League (ESL) Jens Hilgers and Ralf Reichert Global
Samsung and the South Korean
2000 World Cyber Games (WCG) Ministry of Culture, Sport, South Korea
and Tourism
Recognition of electronic sports as sport General Sports Administration for People’s Republic
2003
number 99 of the official sports program the Chinese State of China
U.S. P-1A Visa given togamer Danny Le, U.S. Citizenship and Immigration
2013 U.S.A.
recognizing him as a professional athlete Services
National Basketball Association (NBA)
2017 NBA 2K eSports League U.S.A.
and Take-Two Interactive
2017 eFootball.Pro League Konami y eFootball.Pro Europe
2018 Olympic Esports Forum COI and GAISF Global
Exhibit 2
Ranking of the Most Important Tournaments in 2017
Event Players Teams Location Total purse Winner and share
SaahilArora (alias: UNiVeRsE)
The International (Dota 2) 80 16 Seattle, U.S.A. $24,014,551
$2,777,796
League of Legends World Lee SangHyeok (alias: Faker)
86 16 Los Angeles, U.S.A. $5,070,000
Championship $912,406
World Electronics Sport Gabriel Toledo (alias FalleN)
40 8 Changzhou, China $1,500,000
Games Counter-Strike 472,257
Tony Campbell (alias Lethul)
Halo World Championship 48 12 Burbank, U.S.A $1,000,000
$424,850
Call of Duty XP Johnathan Perez (alias John)
127 32 Los Angeles, U.S.A $2,000,000
Championship $232,707
Source: Based on the report biggest video game competitions from around the world (mrgamez.com, 2018).

Chinese Business Review, Feb. 2020, Vol. 19, No. 2, 55-71
doi: 10.17265/1537-1506/2020.02.002
D DAVID PUBLISHING
The Economic Bankruptcy of the Industries in Mato Grosso,

Brazil
Dilamar Dallemole
Federal University of Mato Grosso, Cuiabá, Brazil
José Ramos Pires Manso
University of Beira Interior, Covilhã, Portugal
Katiane Toldi
Federation of the Industries of Mato Grosso, Cuiabá, Brazil
Data from the Commercial Registry of the Mato Grosso State (JUCEMAT) indicate that the number of bankrupted
industries exceeded 16 thousand between 2006 and 2016. This is a high number, to the point of questioning which
particularities are related with the economic bankruptcy in the State. The objective of this study is precisely to
analyse the profile of these industries that closed their activities in Mato Grosso, considering the estimated survival
rate for the extraction and transformation segments. Also, based on the underlying indicators of factor analysis, the
crucial factors for the economic bankruptcy of micro and small enterprises in the state are delineated. The main
results point to the generalized consequences arising from the main economic crises, with more aggressive effects
for the microenterprises of sand, gravel, and cobble extraction. Aggravated problems included also the food and
logging industries, the main activities of the local economy, with more pronounced impacts in the South, Southeast,
North and Central-North regions of Mato Grosso. The survival rate declined considerably between 2006 and 2008
and, despite recovery in the following period, it has not yet recovered its best performance. In the case of micro and
small transformation industries, the results point to a group with limited managerial capacity and lack of strategic
planning before the execution of the main stages of production and commercialization.
Keywords: economic bankruptcy, survival rate, factor analysis, extraction and transformation industries, Mato
Grosso
Introduction
The growth of the industrial sector should be presented with a natural consequence of agribusiness,
strongly promoted in Mato Grosso. However, data from the Commercial Board (JUCEMAT) indicate that the
number of companies that ceased their operations in the state had a 57% increase between 2006 and 2016,
surpassing 15,000. Still, reports from the Institute of Agricultural Economics (IMEA) show that the industrial
Dilamar Dallemole, Dr., associate professor, Department of Economics, Federal University of Mato Grosso, Cuiabá, Brazil.
José Ramos Pires Manso, Dr., full professor, Department of Management and Economics, University of Beira Interior, Covilhã,
Portugal.
Katiane Toldi, Ms., Economic Advisory Analyst, Federation of the Industries of Mato Grosso, Cuiabá, Brazil.
Correspondence concerning this article should be addressed to Dilamar Dallemole, Street Miguel Sutil, 6322, Cuiabá
78043-695, Brazil.

56 THE ECONOMIC BANKRUPTCY OF THE INDUSTRIES IN MATO GROSSO
Gross Domestic Product (GDP) accounted for less than 20%, compared to more than 50% generated by
agribusiness in the state in 2016.
Incipient participation in GDP can be explained by a large number of risk-generating elements, which are
responsible for the difficulties faced by companies in certain globalized markets. Some hypotheses can be listed
as factors capable of triggering the bankruptcy of companies, when the manifold difficulties faced by the
industrial sector in Mato Grosso are considered. Operational costs may interfere in competitiveness due to
precarious logistics structure; management problems, in which companies are not prepared to manage, plan,
and adapt to constant changes in increasingly competitive markets. Furthermore, among the factors that
generate bankruptcy are fraud, strategic errors, or other limiters tied to insufficient floating capital, excessive
stock, and obsolete product lines (Toledo & Abrão, 2012).
However, traditional and instability-generating factors are not always enough to lead a company to
bankruptcy; thus, the information provided by the bankrupt is crucially important, since it will register the real
factor responsible for the cessation of operations. Knowing which factors are determinant in the economic
bankruptcy of companies in Mato Grosso can shed light on more adequate elements to combat this trend.
Determining the ability of companies to achieve high levels of productivity, which determine their local
survival pattern, can help improve competitiveness (Mariotto, 1991).
The concept of competition may include segmented markets, differentiated products, technological
varieties, and economies of scale. It has a clear role and cannot be confused with the role of the State, which
should only encourage, propose pioneering technological initiatives, accelerate the pace of innovation, among
other measures to protect competition. When considering the capacity of these agents to perform their duties, it
is possible to determine a pattern of survival of the industries in the market—a condition that corroborates with
the main questioning of this study: what particularities are related to the economic bankruptcy of the industries
of Mato Grosso, considering their size, the variety of economic activities, their spatial distribution and survival
rate.
Thus, the general objective of this investigation is to analyze the process of economic bankruptcy of micro
and small industries of extraction and transformation in Mato Grosso. Specifically, it is intended: first, to
identify the profile of bankrupt industries, classifying them by economic activity, size, and location; second, to
estimate the survival rate of Mato Grosso’s industries, considering the extraction and transformation segments;
and third, to evaluate the factors responsible for the economic bankruptcy of micro and small transformation
companies in Mato Grosso.
The empirical matrix used in this investigation considers a documentary database regarding the industries
closed between 2006 and 2016 and the survey of primary data by the means of questionnaires to owners of
micro and small bankrupt companies in Mato Grosso. With the secondary data, profile evaluation was carried
out complemented by the Survival Rate estimate and through Multivariate Analysis to determine the main
factors accounted for economic bankruptcy in Mato Grosso.
It should be noted that this is a research with an unprecedented contribution to the sector in Mato Grosso.
There are studies which reveal some of the main difficulties faced by the industries in the state. However, this
research determines which factors have a closer relation with their economic bankruptcy. Another relevant
aspect is the dimensioning of the problem in the planning space of Mato Grosso, considering each sector, size
and market in which the industries are inserted. Nevertheless, a previous discussion about economic bankruptcy,
competitiveness, and market is presented, before the methodological aspects that support this study..

THE ECONOMIC BANKRUPTCY OF THE INDUSTRIES IN MATO GROSSO 57
Economic Bankruptcy
Concept of Competencies
The economic bankruptcy of a company occurs from the moment the value of the cash flow is less than
the value of the liability, not allowing it to pay its creditors. It expresses a business failure, which may include
changes of ownership, change of field of activity, mergers or even definitive termination by the owner’s
decision. The company’s inability to pay liabilities leads to the accumulation of losses—something that can
affect creditors; however, some opt for legal processes, in some sort of debt recognition and commitment to
their creditors. Others simply fail to operate due to inability to pay their liabilities, whether planned or
unplanned (Wilcox, 1971).
The probability of economic bankruptcy increases from the time the company accumulates negative net
results in continuous periods, without any effective measure to curb such tendency. This is a situation that can
be aggravated or even triggered by the market—i.e. in an economic recession it may not be possible to
implement actions to prevent the weakening of the company. In this case, the risk becomes systemic and affects
a whole sector, whose negative effects tend to be larger among the weaker or less structured companies
(Westgaard & Wijst, 2001).
However, failures are usually associated with business management capacity, since companies are created
and closed daily, in a kind of cycle, which is not always planned or managed efficiently. This process is
nevertheless considered important for learning, as it reflects in the entrepreneur’s experience, helping in the
fight against mismanagement or other vices that jeopardize business success (Cope, 2011). Regardless of
whether the problem is related to the market or to the companies’ internal processes, any evolution is based on
the success of the routines, often resulting from successive errors of interpretation or procedure. In a timely
manner, entrepreneurs can take advantage of past mistakes to find success in new businesses, becoming
stronger to face future problems.
Still in relation to management, five factors are important and considered stages of organizational growth
(Churchill & Lewis, 1983):
i. The existence, a phase in which the company needs to consolidate the demand and, therefore, needs
to acquire the acceptance of the clients;
ii. Survival, with the equalization between revenues and expenses, minimum planning in relation to the
cash flow and employees so that the company can grow;
iii. Success, with the company’s stable and profitable expansion;
iv. Take-off, when the company must seek resources to grow rapidly, even if influenced by the market or
macroeconomic factors;
v. Maturity, with the consolidation of financial gains, expansion managerial capacity and maintenance
of advantages over competitors.
In general terms, the lack of administrative and market knowledge are important reasons for business
failure, which often results from inexperience and results in successive planning errors. For the same reasons,
problems of financial and technological nature arise, such as insufficient capital to start or maintain the
business, which can lead to marketing problems, such as inefficiency in marketing and sales. In the latter, the
problems can be related to the quality of the product, making them obsolete, which will certainly cause the loss
of space to competitors. Among the main flaws listed, it is worth noting the entrepreneur’s inability, as a result

of inexperience and lack of planning to manage the business (Degen, 2005; Chiavenato, 2008).
The bankruptcy of industries is also the result of economic activity, of business cycle and macroeconomic
policy. Even in the face of inexperience or managerial incapacity, often the relationship with large suppliers
and customers can cause impositions not supported in the medium and long term, due to lack of credit, labor or
even an imposition of unfavorable prices. This problem is more evident among micro and small enterprises,
whose structures are smaller and can hardly support large businesses without the financial contribution to
expansion and/or floating capital (Chér, 1991). Moreover, the movement of competitors can change their
condition in the market, which demands persistent evaluation and forecast of future opportunities and
challenges—i.e., new strategies to cope with the changes that tend to occur in the market.
Also, with regard to micro and small enterprises, as well as the contributions of microeconomic theory, the
propensity of a perfect competition structure is obvious, in which case the influence does not occur by one or
another company, but by the prices determined by the market. As there are many sellers and buyers, the
individual decision tends not to affect the equilibrium price, so each firm decides the amount bid based on the
costs of production. In such market structure, it is presumed the provision of homogeneous products,
transparency of the conditions to the participants and, above all, freedom of entry and exit of companies, in this
case determined by the (in)ability of permanence (Pindyck & Rubinfeld, 2010).
Therefore, the emergence, mortality, and survival of companies in the various sectors of the economy are
recorded—the latter being an important point for economic stability. The Organization for Economic
Co-operation and Development (OECD) conducts studies on the mortality and survival rates of industries in
member countries, by means of a basic calculation, in which the mortality rate stems from the ratio between the
number of bankrupt and active companies. This result, subtracted from one unit, expresses the survival rate,
which is found to be higher than 80% in countries such as the United States. Survival rates also have an inverse
relation to time, since the survival of companies in the market decreases over the years (OECD, 2017).
In Brazil this is not different, as revealed by studies of Albuquerque (2013) and Paiva and Ramalho (2013).
Typical problems were identified in each stage of the life of companies, that is, in relation to the management,
the company, and the environment, requiring the reduction of taxes and bureaucracy, as well as the increase of
credit and access to technology to minimize the early mortality of micro and small enterprises. Another
important aspect identified in Brazil is the lack of cooperation networks between companies in the same region,
lack of adequate planning and strategies to the point that, in some cases, the opening rate is similar to the
closing rate of companies (Alves & Lisboa, 2014). In Mato Grosso no studies dedicated to assessing the
economic bankruptcy of companies or even on some basic aspects related to economic activity or space were
found. In this case, there is still no way to specify the factors leading to local business misfortune. However,
some aspects will be clarified in the present study.
Understanding market behavior is fundamental to predicting changes, threats and developing strategies, as
it becomes increasingly complex, turbulent, and interrelated, making it a challenge to identify opportunities.
The understanding of every scope and structure of the market is crucial, even if the interests of the organization
are concentrated in one or a few segments. It is necessary to consider aspects such as technological changes,
competition, and diversity, in preference to that related to buyers (Cravens & Piercy, 2007).
Knowing the market consists of an integrated understanding of the behavior of potential and effective
consumers, as this knowledge is one of the main pillars of any business (Telles, 2003). In this way, the market
is a concept that deserves attention with regard to its scope and limits, since its analysis involves the

examination of several dimensions. These are defined in the configuration of the environment, trend analysis,
examination, validation and functionality of the segmentation, the forecast of demand and level of sales. It can
be said that the evaluation of the market and the selection of better opportunities are part of the marketing
planning. Evaluating the market is not only the identification of wants and needs; it is also the development of
strategies to acquire new customers.
In this case, “the strategy-making process begins with a fundamental choice: the theoretical description of
human activity and environment that best fits the worldview itself” (Whittington, 2006, p. 40). In this process,
managers are responsible for the set of strategies, but it will only be effective with the collaboration of the
individuals involved. Mintzberg, Lampel, Quinn, and Ghoshal (2006) conclude that each business strategy is
unique, whether for large, medium, or small companies, for industries, commerce or service providers. An
effective strategy management requires detailed assessment of resources and competencies, as well as the
capabilities and resources that have been integrated to perform a task, or a set of them. In addition, the
methodological procedures and the empirical matrix used to analyze the economic bankruptcy are presented in
the next section, considering the concepts approached until this moment.
Methodological Aspects
Evaluating the market is a complex task which can go beyond yearnings or needs; also requires strategies,
which will be effective once the individuals involved understand their purpose (Mintzberg et al., 2006).
Understanding the market derives from the integrated understanding of consumer behavior and deserves
attention concerning its magnitude and scope. They are elements that define the environment, the functionality,
and the trends, from which the evaluation can reach better levels and opportunities, as well as to diminish the
probability of failure or even the economic bankruptcy of the company (Telles, 2003).
In this sense, the greater the capacity of evaluation and understanding of the market, the better the
strategies will be and the better will be the survival rates of companies. In Mato Grosso it is not different; data
from Commercial Board of Mato Grosso—JUCEMAT—prove the insolvency of 413 extraction companies and
15,644 transformation industries between 2006 and 2016, distributed in all regions of the state. Based on the
registration data of this group of companies, the analytical structure considers two distinct stages: the first one
turns to the qualitative analysis of data from the extraction and transformation industries in order to present a
profile and highlight elements linked to instability and bankruptcy.
The second stage aims to deepen the analysis in relation to mortality, with the estimation of companies’
survival rate in the indicated period and in an evolutionary way, with an interval of two years. This study
considers the number of industries in activity, closed and with an indeterminate situation (which do not fit into
any of the other two). The survival rate will be estimated based on the INE methodology (2017), represented by
the following expression:
100
where:
Survival of the company i at the end of t+k, k=1,2,...
Birth of companies i in the year t.

At this stage, the empirical matrix considered the strategic information, made available by JUCEMAT,
concerning the closed industries from 2006 to 2016, in Mato Grosso. The data are presented and discussed in
the following results section with the identification of the main peculiarities related to the economic failure of
the extraction and transformation industries, regarding their size, economic activity, spatial distribution and
survival.
In order to understand the behavior of bankrupt companies in their last 10 years of operations in Mato
Grosso, to evaluate the management capacity of the sector, as well as its strategies to face competition,
becomes fundamental. Thus, the empirical matrix considers, in addition to the strategic information provided
by JUCEMAT, other information obtained in loco from owners of micro and small transformation companies,
economically bankrupt, from 2006 to 2016 in Mato Grosso. The data collection instrument consisted of a
structured questionnaire, with defined fields, in order to capture specificities and, at the same time, broader
aspects related to the industries, as well as to understand the dimension of knowledge and trends for the sector.
This descriptive diagnosis of both primary and secondary data is important; however, its validity is
intensified by the inclusion of the underlying Factor Analysis indicators. It is understood that the factors have
an important role in the quantification of the selected information, so that the results point reflective conditions
on the industrial performance and help directly in the evaluation of its trends in Mato Grosso (Zeller &
Carmines, 1980).
Among the most recent contributions of the technique, it refers to the fact that the Factor Analysis aims to
describe the variability of a random X vector by means of a reduced number of random variables, called
common factors. This model explains, from the selected factors, the variability of X, in which the rest not
included is part of the random error (Mingoti, 2005). Factors are capable of explaining isolated dimensions of a
given data structure or a dimension of the whole.
The above-mentioned technique expresses each variable in terms of common factors. It is represented
algebraically by:
where:
= the variables (i = 1, 2, ..., p);
= the coefficients related to each factor (i = 1,..., p; j = 1, ..., q);
FCj = the common factors (j = 1, 2, ..., q);
ei = specific factors.
However, the basic model of factors is usually expressed in the matrix form in which:
Λ
or,
;Λ ; ;
where:

X = a p-dimensional vector of original variables, X’ = (x1, x2, ..., xp);

F = the q-dimensional of common factors, F’ = (f1, f2, ..., fq);
E = the p-dimensional of unique factors, E’ = (e1, e2, ..., ep);
Λ = the matrix (p, q) of constants or unknown parameters.
With regard to the parameters for the model, it is necessary to use methods and tests to validate and/or
make the result more consistent. As far as rotation is concerned, the Varimax mode is more appropriate to this
type of analysis, since it is based on establishing factors with great variability in loadings. It is the compilation
of a group of variables highly correlated with the factor and, on another group, with negligible correlation to the
same factor. Regarding the number of factors, it is preferable to let the model determine them freely so they are
able to explain, in a more complete way, the collected data (Mingoti, 2005).
The significance is also measured by the Bartlett test and the Kaiser Meyer Oklin (KMO) measure. In the
first case, the closer to zero is the test result, the null hypothesis will be rejected and the analysis can be
conducted (Hair, Black, Babin, Anderson, & Tatham, 2010). According to Mingoti (2005), for the results to be
considered valid, all commonalities must be greater than 0.5. In addition, KMO seeks to determine whether
these variables are correlated with each other and whether the desirable indicator is close to one; however, it
must be greater than 0.5. Bartlett’s sphericity test is determined by the following mathematical expression:
1
1 2 5 · | |
6
where:
= the determiner of the correlation matrix of the sample;
= the number of observations;
= the number of variables.
In addition, the cumulative variance criterion can be used as the basis for determining the number of
factors that should be extracted. Hair et al. (2010) suggest as acceptable an explanation of at least 60% of the
universe of variables. Also, in the case of the confirmatory Factor Analysis, besides the statistical criteria, it is
possible to present theoretical arguments to justify the extraction of the factors, considering conceptual terms or
possible relationship patterns between variables and factors.
As far as the number of information is concerned, it is desired that it be as large as possible; a minimum
of 50 observations is recommended. However, 100 is defined as advisable to ensure more robust results and
a ratio between the number of cases and the number of variables not less than a ratio of three to one
(desirable five to one) (Hair et al., 2010). In this case, the sampling technique described by Andrade (1985) was
used to estimate a desired number of micro and small bankrupt companies capable of representing the
approximate universe of 12,071 listed by JUCEMAT, considering a sampling error of up to 10% and one
confidence level of 95%. The above-mentioned technique is determined from the following mathematical
expression:
· · ·
1 · ·
where:
n = size of sampling;
N = size of the population;

p = % with which the phenomenon is verified;

q = complement of p;
z = confidence level chosen (95% = 1.96);
e = sample error allowed(e </= 10%).
The sample suggested was 95 companies to meet the minimum degree of representativeness, duly required
by the research. However, 106 interviews were also conducted, also to meet the parameters considered by Hair
et al. (2010) as ideals. The factors, other tests and indicators were estimated using SPSS software and are also
arranged in the following results section.
Bankruptcy of the Industries of Mato Grosso

The number of bankruptcies in Mato Grosso is in line with the main trends of national or international
crises such as the subprime crisis in 2007 and the Brazilian political-economic crisis triggered off in 2014. The
values shown in Figure 1 indicate bankruptcy peaks in extraction and transformation industries, precisely, in
periods after the events mentioned. In the case of the extraction sector, the post-subprime peak occurred in
2010, with 60 industries registered as bankrupt; however, in 2015 the effect of the national crisis was even
more devastating in the state. Also noteworthy is the agribusiness crisis in Mato Grosso, which lead to another
bankruptcy peak in 2006.
Extraction Enterprises Transformation Enterprises

120 4000
3514
99
3500
100
3000
80
2500 2197
60
60 2000 2285
1459
37 50 1500 1232
40 1120
27 1134
23 31 38 1000
1062 711
20 18
15 500 644
15 286
0 0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Figure 1. Number of bankruptcies in Mato Grosso (2006-2016). Source: Elaborated with data from JUCEMAT (2017).
With regard to the transformation industries, there is no change in the periods of greatest problem. In 2006,
2010, and 2015, the bankruptcy peaks of this group are also recorded, which reinforces the negative effect of
these three events in Mato Grosso. Overall, 405 and 15,644 closures were recorded in the extraction and
transformation sector, respectively, between 2006 and 2016. It is also noted that the effects were even more
aggressive for micro-enterprises, considering that 58% and 72.6% of this group of bankrupt companies in the
state operated in the extraction and transformation sector, respectively (Table 1). The average capital of this
size of companies is a little more than 27 thousand among the extractive and even smaller among the
transformation industries of the state.

THE ECONOMIC BA
ANKRUPTC
CY OF THE IN
NDUSTRIES
S IN MATO G
GROSSO 63
Table 1
Size and Avverage Capittal of the Bankrupt Industrries (2006-20
016)
Extraction
E Trransformation
Size
Baankrupt Capital Baankrupt Capital
Micro enterpprise 58.0% 27,054 722.6% 17,026
Small size 6.22% 50,916 4.66% 83,655
Medium/largge 37.8% 319,244 222.9% 401,125
Source: Elabborated with datta from JUCEM
MAT (2017).
Mediuum and large companies were

w also signnificantly affe fected in the period.
p In thiss group, average capitals
were higheer than 319 annd 401 thousand for the 37.8% and 22.9% for extraaction and traansformation companies,
respectivelly, which ceaased to operaate in Mato Grosso
G between 2006 annd 2016. Amoong the main n extractive
activities, the
t greatest impact
i was inn the segmennt of sand, grravel, and coobble extractiion, which reepresented a
quarter of the
t bankruptccies, as can bee observed inn Figure 2.
wels
Jew 2
2.4%
onstruction Material
Stones and Co 3.1%
Mineral Coal
C 3.1%
Limesstone and Dolom

mite 3.6%
Ironn Ore 4.6%
P
Precious Metal Ore 15.7%
one, Sand and Clay

Sto C 20.11%
Other Activvities 2
21.5%
Sand, Gravel or Bouulder 25.7%

%
0% 5% 100% 15% 20% 25% 3

30%
Figuure 2. Economicc activity of exttraction industrry (2006-2016). Source: Elaborrated with data from JUCEMA
AT (2017).
The extraction actiivities of stonne, sand, andd clay (20.1% %), as well ass the preciouss metal ore (1 15.7%) also
stand out among
a the most
m affected in Mato Grosso. The im mpacts on thee iron, limesttone and dollomite ores,
mineral cooal, stones and constructioon materials sectors,
s as well as gemstoones represennt more than 16% of the
A for the ceeased transformation indu
closings inn the period. As ustries, 20.9%% belonged too the timber segment,
s as
can be obsserved in Figgure 3. Food production also a was signnificantly imppacted, as 16.8% of the bankruptcies
b
between 20006 and 20166 occurred in this segment..
Followwing that, thhe maintenannce, repair, and a installatiion segmentss with 9%, cclothing 7.8% %, vehicles
towage andd coachbuildder 7.7% andd metal 7.3% % are an intermediate grooup, howeverr significant, among the
closures off manufacturiing industriess in Mato Groosso. When th he spatial disttribution of thhese groups of
o industries
is observedd (Figure 4), the
t South Reggion must be highlighted, since 33.8% of the processsing industriies and 37.5% %
of the extraactive industrries were locaated in this sppace. Not surrprisingly, sinnce this regioon encompasss the capital

64 THE ECONOMIC BA
ANKRUPTC
CY OF THE IN
NDUSTRIES
S IN MATO G
GROSSO
Cuiabá andd Várzea Grannde, the mainn urban settlement of Mato

o Grosso; eveen though theey did not opeerate locally,
many comppanies had thheir headquartters in the cappital.
Rubber and P
Plastic 1
1.5%
Leeather 1
1.5%
Chemical Prooducts 2.0%
Cellulose, Paper 2.2%
Textile Prooducts 2.7%
P
Printing and Playback of Recorrdings 4.3%
Noon-Metallic Minnerals 4.7%
Furnniture 5.1%
Other Actiivities 6..5%
Metall, Except Machiinery and Equippment 7.3%
Vehicles, Tow and Bodyywork 7.7%
Cloothing 7.8%
M
Maintenance, Reepair and Installlation 9.0%
Food Prooducts 16..8%
Wood Proceessing 20.9%
0% 5% 10% 15% 20% 25%
Figure 3. Economic activvity of transform

mation industries (2006-2016)). Source: Elaboorated with dataa from JUCEMA
AT (2017).
Extracction Transformation
n
I I
5,,7% II 4,7% II
10,6% III 9,1% III
XII 3,5%
% XI 1,,9%
0,7%
% 2
2,4%
XII X
XII
4,0%
% 11,,2%
VIII X VIIII X
3,2% 2,7% 5,4%
% 5,4%
IX IV IX IV
V
1,,7% 9,4% 1,8% 4,8%
VII VII
6,2% 7,4%
VI VI
37,5% V 33,8% V
144,8% 12,1%
I. Northhwest II. Nortth III. Northeaast IV. East V. Southeast VI. South
VII. South West VIIII. West IX. Midwest
M X. Ceentre XI. Nortthwest II XIII. North-Centree
Figure 4. Spatial disttribution of thee industries bannkrupt in Mato Grosso (2006--2016). Source: Elaborated with
w data
UCEMAT (2017).
from JU

Another place worthy of note is the Southeast Region, which is a gateway to the main transportation routes
of Mato Grosso and main access to the most developed regions of the country. In this corridor is located
Rondonópolis, which has gained status as the second largest economy in the state and stands out for its
industrialization in the last decade. The Central-North Region is considered one of the main agribusiness
regions of the state—also one of the most affected, mainly in the transformation segment—as well as the North
Region, which accumulated closures in both sectors. In the Eastern Region, the impacts were higher in the
extractive industry—though all regions presented closures in the period.
As previously stated, the bankruptcy of companies in Mato Grosso suffered from the main crises for the
period under study, so the survival rate partly follows such oscillations. In Figure 5, it can be observed that
before 2006 the companies presented better indicators of longevity, reaching 98.17% and 97.48%, in the face of
agribusiness crisis in Mato Grosso. The negative effect on economic activity is very clear across industries,
evidenced by a sudden drop in survival to 57.32% and 52.84% between 2006 and 2008.
2.5
94.15% 98.17%
2
91.53%
94.97% 96.75%
83.04%
73.37%
1.5
82.96% 76.34%
95.90% 97.48%
1 88.28% 57.32%
97.50% 76.03%
93.66% 70.90%
73.01% 75.12%
0.5
52.84%
0
96-98 98-00 00-02 02-04 04-06 06-08 08-10 10-12 12-14 14-16
Transformation Extraction
Figure 5. Survival rate of the industries in Mato Grosso (1996-2016). Source: Elaborated with data from JUCEMAT (2017).
As from 2008 the economy of Mato Grosso reacts again and the indicators of industries’ survival
gradually improve. It should be noted that in all crises there were many bankruptcies. However, between 2010
and 2016 many companies also started, maintaining some stability in the survival rate. To some extent, the
extractive sector blamed the country of the political-economic crisis from 2015 onwards. Nevertheless, the
decline was not as marked as 2006, which is a sign that the industrial sector of Mato Grosso was better adapted
by the event of that year—including an improved survival amid the devastating global effect for many
subprime countries in 2010.
With regard to the analysis of the main factors responsible for closures, an evaluation of the tests and
parameters confirms the significance of the results indicated by the model. The sphericity test of Bartlett has a
significance level close to zero, which is why the null hypothesis is rejected. Moreover, the
Kaiser-Meyer-Oklin measure of 0.787 indicates that the variables are correlated with each other and that the
results can be analyzed with this multivariate technique. These values are shown in Table 2. Furthermore, all
commonalities are greater than 0.5, as presented in Table 3.

Table 2
Bartlett’s Test of Sphericity and Kaiser Meyer Oklin
Kaiser-Meyer-Oklin: Measure of Sampling Adequacy 0.787
Bartlett’s Test of Sphericity: Approx. Chi-Square 627.001
Df. 105
Significance 0.0000
Source: SPSS 20. Extraction Method: Principal Component Analysis (Varimax).
Table 3
Communalities Presented by the Variables
Variable Initial Value
External changes 1.000 0.736
Expansion productive capacity 1.000 0.593
Investments 1.000 0.745
Location 1.000 0.634
Market competition 1.000 0.501
Employees 1.000 0.777
Market time 1.000 0.639
Capital 1.000 0.740
Planning for creation 1.000 0.603
Strategic planning 1.000 0.623
Recognized brand 1.000 0.539
Stock control 1.000 0.605
Quality control 1.000 0.663
Access to credit 1.000 0.740
Sales failures 1.000 0.516
The total number of variables incorporated by model (15) is between the desirable range, in compliance
with the recommendation that the number of variables must respect the ratio of five to one, considering the
number of observations. The variation explained by rotational factor loads corresponds to 64.3% of the total
variables employed, divided into four factors. The minimum parameter of 60% is also considered. However,
the first two are the most expressive and explain, cumulatively, 38.1% of the database (Table 4).
Table 4
Total Variance Explained
Initial Extraction sums of Rotation sums of
eigenvalues squared loadings squared loadings
Comp.
% da % % da % % da %
Total Total Total
Variance Cumulative Variance Cumulative Variance Cumulative
1 4.971 33.140 33.140 4.971 33.140 33.140 3.181 21.205 21.205
2 1.922 12.813 45.952 1.922 12.813 45.952 2.548 16.984 38.189
3 1.641 10.941 56.894 1.641 10.941 56.894 2.345 15.631 53.819
4 1.112 7.414 64.308 1.112 7.414 64.308 1.573 10.488 64.308
Once all the parameters of the model are considered, Table 5 shows the groupings. The main one can be
named Organizational Factor, accountable for the explanation of 21.2% of the database. Its composition reflects

the inability of industries to face competition in the market and to cope with impacts and changes. The positive
indicators point out that there was investment in this sense and, according to the interviewees, one lot had the
competence to increase productive capacity. However, medium and low indicators showed that such effort was
not enough to face competition, identified as problematic because it is a perfectly competitive market.
Factors such as location and external changes were identified as satisfactory by the research; the majority
of respondents reported that external changes positively affected or did not cause problems in the market. The
location factor was also considered positive since companies were located in the main cities of their regions,
which are also the largest markets.
Table 5
Matrix of Rotated Components
Variables Factor 1 Factor 2 Factor 3 Factor 4
External changes 0.826 0.148 -0.153 0.097
Productive capacity expansion 0.540 0.314 0.356 0.276
Investments 0.753 0.234 0.169 0.307
Location 0.744 0.208 0.158 0.111
Market competition 0.640 -0.243 0.157 -0.035
Employees 0.219 0.851 0.043 0.051
Market time 0.307 0.697 0.219 0.106
Capital -0.161 0.832 0.140 -0.042
Planning for creation -0.179 -0.035 0.749 -0.099
Strategic planning 0.301 0.250 0.683 -0.055
Well-known brand 0.077 0.382 0.591 0.193
Stock control 0.444 0.005 0.637 0.034
Quality control 0.386 0.108 0.490 0.512
Access to credit 0.058 -0.136 0.031 0.847
Sales failures 0.173 0.359 -0.154 0.578
The second grouping includes variables, whose characteristics allow nominating it Structural Factor, with
medium factorial loads and accountable for the explanation of 16.9% of the database. With regard to the
number of employees and the capital of the company, the model shows high factor loads, assuming an adequate
structural pattern. According to research data, they are micro and small companies with an average capital of
approximately 17.4 thousand reais and an average of eight employees. However, with respect to the time of
performance, the indicators are not very representative and draw the attention to the fact that 27% of the
industries have never performed after their formalization. The data in Figure 6 also show that most companies
did not operate for more than five years in the market—a barrier surpassed by only 8% of them and a fact that
explains the factorial load of 0.697, very close to the acceptable minimum.
The third grouping includes four variables, whose characteristics allow defining the Managerial Factor,
with acceptable factor loads and accountable for the explanation of 15.6% of the database. It is noted that the
loads associated with planning, however larger, are considered medium and reflect an unsatisfactory level in
this case. Most of the informants reported that there was no planning whatsoever at the time when they decided
to formalize the opening of the company—a tendency which remained during the company’s operation.
The lack of strategic planning while the company was operating in the market corroborates the lack of
managerial capacity, as seen in Figure 7. Only 44% of managers carried out strategic planning at least once

68 THE ECONOMIC BA
ANKRUPTC
CY OF THE IN
NDUSTRIES
S IN MATO G
GROSSO
over the opperating periood, a percentage very closse to that relaated to their qualification.
q . The researcch identified
that over 50%
5 of the managers do not
n have somee type of train ning in the management
m aarea, which could enable
them to im
mplement strattegic actions capable of withstanding in nternal or eveen market-related adversitiies.
3
38%
40%
35% 27% 27%
30%
25%
20%
15% 8%
10%
5%
0%
Upp to 1 year From 1 to 5 years Morre than 5 years Never accted
Figure 6.
6 Time of act inn the market. So
ource: Researchh Data (2017).
In refference to innventory conttrol and the brand, the modelm showed minimal fa factorial load
ds—close to
acceptable— —somewhat natural, since more than half (56%) did d not carry outo any invenntory controll (Figure 7).
The brand was also soomething thatt received litttle attention from managgers. Understtandably, sin nce they are
markets off perfect comppetition and the
t price facttor is of greatter importancce, both for thhe companiess at the time
of acquisitiion of raw maaterial and coomposition off costs, and fo
or consumers, either wholeesale or retaill.
70% 60% 62%

56% 5
56%
60% 53%
477% 44%
50% 44%
40%
%
38%
40%
30%
20%
10%
0%
Saless Failures Strategic Stock Contrrol Manaager Workking Capital
Planning Trainning
Yes Noo
Figure 7. Pllanning, sales annd managemen

nt. Source: Reseearch Data (2017).
The foourth and lastt grouping, with

w medium factorial
f load
ds and accounntable for the explanation of
o 10.4% of
the databasse, includes variables
v thatt allow nomiinating it as Commercial Factor. As aalready stated d, there was

investment in the expansion of productive capacity, added to the aid of credit, which explains the positive
factor load (0.847). However, a number of owners reported their difficulties in obtaining credit exclusively for
floating capital. This is an essential element for the consolidation of term sales, fundamental for certain markets
and that directly influenced the micro and small enterprises of Mato Grosso.
As pointed out by 62% of respondents, one of the main consequences of the lack of credit for floating
capital was the sales failure—identified in 53% of the cases (Figure 7). The minimum factor loads also confirm
that there were problems at this point, but also for quality control of the products, which is still associated with
the lack of capital to run the business. In fact, management was one of the main problems identified by the
research, since only 40% of the owners and/or managers have some training or qualification courses aimed at
business management. Besides, training in an upper level is rare, which can explain successive failures in
quality controls, inventories, as well as to break the bureaucracy necessary to access credit. The natural cause of
this process was the failure in sales which, to a certain extent, is intensified by competition in the
aforementioned market structure.
Final Considerations
The data show that the industrial sector of Mato Grosso was impacted by the main negative events
occurred in the international and Brazilian economy of the last decades. It should be observed that the
economic and political crisis in 2015 caused the largest number of bankruptcies, both in the extraction and
transformation segments. However, the subprime and agribusiness crisis of 2006 also aggravated the problems
for the sector. Regardless of the level of industrial development and corporate solidity, developments of this
nature tend to have negative impacts; difficulties did not only surround the state or had a local
impact—significant company closures took place in many regions of the country and around the world.
Among the impacted structures, the effects were more aggressive for microenterprises, taking into account
that more than half of the bankrupt industries had this characteristic. Considering the main extractive activities
in Mato Grosso, the greatest impact was observed in the sand, gravel, and cobble extraction segment, which
represented a quarter of the bankruptcies, also influenced by the saturation in the construction sector and the
lack of resources to keep part of the infrastructure works in the state. The problem of wood processing
industries, one of the main segments of the local economy, was also aggravated.
When observing the spatial distribution of industries closed in Mato Grosso, the highest rates are clearly
identified in the Southern Region, where the capital Cuiabá and the city of Várzea Grande, with its Industrial
District, are located. These two cities have the highest population density and, for many years have been the
largest economies in the state. Currently, the second largest economy spot belongs to Rondonópolis, due to its
industrialization over the last decade and its strategic position in the territory. Located in the Southeast Region,
the municipality is the gateway to the main accesses to the state, a meeting point of the two main highways that
connect to the Center, South, and Southeast, and which holds the largest grain warehouse for grain disposal.
The process of industrialization has accelerated in the last decade and, therefore, the industries of the region
were also affected by the problems of the sector in the abovementioned periods.
The indicators of longevity for the industries in Mato Grosso have always been high and greater than 90%
until the first major regional crisis in 2006. The negative effect on economic activity is very clear across
industries, evidenced by a sudden drop in survival for just over a half between 2006 and 2008—a period in
which both segments were impacted. However, in relation to the political-economic crisis faced by the country

from 2015 onwards, the extraction sector faced more difficulties, with a slight drop in the survival of its
industries. The transformation segment remains stable, just as were all the companies of Mato Grosso in the
subprime period—a difficult time for the national and, mainly, international economy. Despite the record of
difficulties in some activities, the industry remained solid after the first major crisis of 2006.
The economy literature makes clear that the industrial reality of Mato Grosso has always faced difficulties
related to logistics, due to the distance factor, but also due to the precariousness of the transportation routes.
Nevertheless, this study reveals that this is not a crucial element in the bankruptcy of the group of industries
investigated. The location factor associated with external changes was considered satisfactory, which can be
justified by the characteristic and basic objectives of these industries. They are mostly micro and small in size,
distributed around the state, with restricted productive capacity, often focused on meeting local demand. Most
of the owners made investments and expanded their production capacity. So, from the structural point of view,
these industries were able to maintain themselves, even in the face of local competition—one of the main
elements pointed out as negative.
The fight against competition requires continuous actions, especially in the medium to long term, which
are mainly derived from planning. Most entrepreneurs have revealed that they have not even planned the
opening of the companies, carried out any strategic planning during the operation period, and even when they
did, it did not always have the expected effect. It is a necessary procedure at various stages of production and/or
marketing, identified as limited by the research.
The planning flaws are directly related to the managerial capacity, and the lack of qualification of the
managers was the crucial point for the economic bankruptcy of most of the industries. This was not only due to
the lack of an academic-professional training, as the experience over the years may enable the manager to plan
the productive and commercial process of their company. However, a limited strategic planning and quality
control and deficient inventories, when undertaken by the owners/managers were identified.
Despite the registration of capital for investment and expansion of productive capacity, there was also
demonstration about the lack of floating capital in most companies. Market access for certain products requires
a certain amount of time, which may be even greater for the consolidation of a network of buyers and suppliers.
Very often, without a financial reserve, it is not possible to manage production and, at the same time, to wait for
revenue to flow in—a situation that can worsen when there is debt. Fortunately, among the industries surveyed,
indebtedness was not a very important factor, although this may be linked to the inability to access credit, often
not for the lack of guarantees, but for the inability to superpose bureaucracy.
In structures of perfect competition, it is natural that market problems occur. New competitors are always
joining, even if they see expansion of activities in other spaces, such as new consumer markets. Thus, there will
always be price competitiveness, since in most cases products are substitutes and/or obsolete, so as not to
attract the consumer by means of some differential. In this case, mainly in regionalized markets, demand is
limited and the entry of a more structured industry aggravates the problems of micro and small ones—often
enough to cause economic bankruptcy.
Another consequence of the constant competition is the flaws in sales, claimed by most businessmen. With
limited managerial capacity, lack of internal controls and difficulties in access to credit for floating capital, the
investments made in the expansion of productive capacity may not have the expected positive effect and the
company ends up with part of its fixed capital, which aggravates even more the situation. The abovementioned
limitations hinder the company’s success in the medium and long term—a problem that can be linked to 92% of

bankruptcy cases, since only 8% have been able to operate in the market for more than five years. This is not a
simple problem or easy to be solved without the expansion of managerial capacity in Mato Grosso, something
that depends not only on the entrepreneur, but on the industry as a whole, the public power and the primary
productive base. It is not enough to have abundant raw materials, it is necessary to have a joint view of the
benefits that the transformation can generate for the socioeconomics of the state.
References
Albuquerque, A. A. (2013). Fatores de Mortalidade de Pequenas Empresas: análise de empresas do setor varejista a partir do
ciclo de vida organizacional. 339f. Tese (Doutorado em Engenharia de Produção)—Escola de Engenharia de São Carlos,
Universidade de São Paulo.
Alves, F. P., & Lisboa, W. T. (2014). Vida e Morte da Pequena Empresa no Brasil: aspectos conceituais e contextuais com vistas
ao reposicionamento estratégico. Revista Cesumar, 19(2), 479-500.
Andrade, G. M. (1985).Estatística Geral Aplicada (2nd ed.). São Paulo: Atlas.
Chér, R. A. (1991). Gerência das Pequenas e Médias Empresas (2nd ed.). São Paulo: Maltese.
Chiavenato, I. (2008). Empreendedorismo: dando asas ao espírito empreendedor. São Paulo: Saraiva.
Churchill, N. C., & Lewis, V. L. (1983). Business growth the five stages of small business growth. Harvard Business Review,
61(3), 30-50.
Commercial Registry of the Mato Grosso State—JUCEMAT. (2017). Estatísticas. Disponível em: http://www.jucemat.mt.gov.br/.
Acesso em: 22 Sep.
Cope, J. (2011). Entrepreneurial learning from failure. Journal of Business Venturing, 26(6), 604-623.
Cravens, D. W., & Piercy, N. F. (2007). Marketing Estratégico. São Paulo: McGRAW-HILL.
Degen, R. O. (2005). Empreendedor: fundamentos da iniciativa empresarial. São Paulo: Pearson Education.
Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2006). Multivariate data analysis. Pearson/Prentice Hall,
Upper Saddle River: Pearson/Prentice Hall.
Instituto Nacional de Estadística—INE. (2017). Indicadores de Demografía Empresarial. Disponível em:
http://www.ine.es/prensa/np944.pdf. Acesso em: 20 Nov.
Mariotto, F. L. (1991). O conceito de Competitividade da Empresa: uma análise crítica. Revista de Administração de Empresas,
31(2), 37-52.
Mingoti, S. A. (2005). Análise de Dados Através de Métodos de Estatística Multivariada. Belo Horizonte: Editora UFMG.
Mintzberg, H., Lampel, J., Quinn, J. B., & Ghoshal, S. (2006). O Processo da Estratégia: conceitos, contextos e casos
selecionados (4th ed.). Porto Alegre: Bookman.
Organisation for Economic Co-Operation and Development—OECD. (2017). Employer enterprise survival rates. Disponível em:
http://stats.oecd.org/index.aspx?queryid=21581. Acesso em: 5 jun. 2017.
Paiva, M. J. G. D. E., & Ramalho, R. X. (2013). Constituição e Extinção de Microempresas em Juazeiro do Norte-Ce. Cadernos
de Pesquisa, 20(3), 26-33.
Pindyck, R. S., & Rubinfeld, D. L. (2010). Microeconomia (7th ed.). São Paulo: Prentice Hall.
Telles, R. (2003). Marketing empresarial. São Paulo: Saraiva.
Toledo, P. F. C. S., & Abrão, C. H. (2012). Comentários à Lei de Recuperação de Empresas e Falência( 5a rev ed.). São Paulo:
Saraiva.
Westgaard, S., & Wijst, V. D. (2001). Default probabilities in a corporate bank portfolio: A logistic model approach. European
Journal of Operational Research, 135(2), 338-349.
Whittington, R. (2006). O que é Estratégia. São Paulo: Thomson Learning.
Wilcox, J. W. (1971). A simple theory of financial ratios as predictors of failure. Journal of Accounting Research, 9(2), 389-345.
Zeller, R. A., & Carmines, E. G. (1980). Measurement in the social sciences: The link between theory and data. Cambridge:
Cambridge University Press.

Chinese Business Review ISSN 1537 1506 V

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chinese Business Review ISSN 1537 1506 V

Uploaded by

Copyright:

Available Formats

Chinese Business Review

Volume 19, Number 2, February 2020 (Serial Number 191)

David Publishing Company

Editorial Board Members:

David Publishing Company

The Economic Bankruptcy of the Industries in Mato Grosso, Brazil 55

The Emerging eSport Market:

Keywords: eSports, entertainment, videogames, Virtual-Reality (VR), Augmented-Reality (AR)

Introduction to the Network Society

y What business precedents exist for both technologies in this market?

Fiigure 1. eSportss value chain. Source:

Origen and Evolution of the eSports Industry

which 17 NBA franchises participate)10 in 2017.

Fiigure 2. Globall eSports revenuue growth estim

Rest of the World

Businness opportunnities in a market

Designing the Future of eSports

Permanent Innovation Through Startups That Renew the Experience

Expanding the eSports Phenomenon to Other Categories of Actors

Amazon Prime could become a great trigger for the market28.

Marquardt, M. (2018). Pioneers in eSports. Norwood House Press.

The Economic Bankruptcy of the Industries in Mato Grosso,

X = a p-dimensional vector of original variables, X’ = (x1, x2, ..., xp);

p = % with which the phenomenon is verified;

Bankruptcy of the Industries of Mato Grosso

Extraction Enterprises Transformation Enterprises

Mediuum and large companies were

Limesstone and Dolom

Ironn Ore 4.6%

one, Sand and Clay

Sand, Gravel or Bouulder 25.7%

0% 5% 100% 15% 20% 25% 3

Cuiabá andd Várzea Grannde, the mainn urban settlement of Mato

0% 5% 10% 15% 20% 25%

Figure 3. Economic activvity of transform

70% 60% 62%

Figure 7. Pllanning, sales annd managemen

The foourth and lastt grouping, with

You might also like