The three main sponsors at the Candidates Tournament that starts this Friday in Madrid are all coming from online chess. It is Chess.com, their former main shareholder, the Scheinberg family (they sold their shares to General Atlantic in January), and Chessable, the most profitable part of the competing Play Magnus Group. One may assume that online chess is thriving when its protagonists are financing over-the-board chess, but after two golden years this is not the case any more.
Since Russia invaded Ukraine in February, the chess economy has been stagnating or declining due to the near-global recession. Chess lovers order less courses and subscriptions. Streamers don’t see their audience grow any more. Much fewer jobs are advertised than half a year ago.
Probably the clearest indication that the outlook has changed was the first quarter 2022 presentation by the Play Magnus Group. While the bookings in January were considerably higher than a year before, this changed in February. If the Meltwater Champions Chess Tour wasn’t going so strong, the numbers would look even more humbling, admitted CEO Andreas Thome.
He went on to line out several cost-cutting policies that are already in place. chess24 has taken cuts in all but the English and Spanish language markets. The Hamburg office has been closed. After Chief Product Officer Gerald Tan left in March, the position has not been filled again. Supervision of the technology team has been taken over by Aimchess CEO Anton Gora who left Moscow for Dubai and is relocating to Barcelona.
In spite of all the measures it is hard to see how the Play Magnus Group can manage to reach its goal of 100 million US-Dollar in bookings by 2025. The share prize closed at 8.15 Norwegian Crowns this Thurday, which is 65% lower than a year ago.
Crypto companies are going through an even deeper crisis, and we won’t see that sponsorship for some time.
The hit on other sectors has an impact on online chess as well. The crypto economy is going through a deep crisis. In 2021 crypto currency companies sponsored tournaments, streamers and even the world championship, and we won’t see that sponsorship for some time.
Chess viewing numbers on Twitch have been declining by 31% over the last three months. It has yet to be seen if and by how much this may be turned around by the Candidates Tournament. Hikaru Nakamura remains bullish. While the most popular chess streamer is going to compete for the right to play a world championship match, he has lined up eight streamers to run his channel.