In that aspect I wouldn't consider it to be a bubble, but just a subsidized product. What I think is silly is that LAN tournaments that used to be a natural extension of other events to reduce overall costs have turned into the same scheme as boxing/wrestling promotions. The game publisher's investments really go all the way back to the fact that the traditional tournament scenes from back in the day (kespa, wcg, etc) didn't kick anything back up to the developers and could keep ticket sales/sponsorship costs. Now they subsidize that market so they have some aspect of control and to also get their piece through various monetization schemes.

The reason why I suggest it's similar to boxing/wrestling is that really all you need to get into the market and trying to create an event is charisma, connections, and time to pull off a single event. It's not like there is an overarching master event planner for all events and leagues, it's a much more loose market and you may be able to throw a few big promotions a year. It's not too different than putting on an industry event like a home show, IT expo, or any other kind of weird infrequent event. Since the actual profits for those kind of events are slim at best people cut corners and be exploitative in all sorts of fun ways.

The question is always just going to be when are the subsidies/sponsorships are going to stop. A cynical part of me feels like there are a lot of people on the inside of corporations writing sponsorship checks are driven by people who are fans of esports as well- just the same as people who write checks for golfers or NASCAR.