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United States22883 Posts
On April 26 2010 04:28 Milkis wrote:Oh good. So they speak for the players, don't they? Stop bringing up things that'll contradict yourself. Especially when you're so utterly wrong. http://ko.wikipedia.org/wiki/한국e스포츠협회Korea e-Sports Association is what they stand for. Stop being ignorant. Show nested quote +Annnnnnd we have a winner, ladies and gentlemen!
Fuck, KeSPA should just declare non-profit status and set themselves up as a humanitarian aid organization. They save hundreds of kids each year! Yup. Trolling, blatant sarcasm, and ridicule is the best way to get your point across. Maybe you'll have a more coherent and complete argument if you actually responded to my entire argument instead of trying to attack little pieces that are irrelevant to the actual arguments at hand. Your actual argument is that you don't care about the legal system and you think KeSPA does a fanfuckingtastic job, therefore Blizzard should hand over control of their game. It's even funnier that you chose to cite an IP argument, and then quickly backpedaled that you're not concerned about legality. When presented with evidence of their misconduct and the fact that they've strangled competition, you've just thrown out answers that completely ignore the reality of the KeSPA/chaebol relationship. The conflicts of interest extend to the very core of the organization.
"We welcome you to the 2010 NBA Finals on NBA TV, between the NBA Nerdrockets and the Denver Nuggets!"
Players are barred from forming a union. A strike would get them blacklisted.
You're not even presenting an economic argument. This is just an opinion piece on why Blizzard dr00lz and KeSPA r00lz, with a couple of economics terms thrown in incorrectly and nice formatting.
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On April 26 2010 04:21 Milkis wrote:KeSPA has signaled clearly that they care about eSports and wish to develop it. Or do you not understand what "necessary signals" are? They have more than proven themselves. Way to not read the rest of my response.
Killing GOM. "Free Agency." Horrific work conditions. KeSPA's acts have been entirely consistent with a monopoly that is trying to wring as much short term profit out of something as possible and not an organization that cares about growth.
Show nested quote +Do you not understand the point of collusion with labor contracts? The chaebols profit maximized because they are keeping the player salaries at slave wages. Because they don't charge tickets because they can't and keep fans, they simply do things like make sure the players are underpaid and just eat up the television revenue. Giving JD the contract he deserves would drive up player salaries in general and hurt them all. The Starcraft players don't have to agree to those terms. What stops them from going on strike? I dont think you understand. 20K a year in Korea? That's what college grads get in Korea. Fuck, I know so many people who work for so much less, something like 800 dollars a month. Proplayers are EXTREMELY well paid, especially for their wage, if you consider what normal people get paid in Korea.
Do you honestly think most Starcraft players make 20K a year? Most players play for nothing but housing and food or nominal contracts like 5K a year. Only the top players on teams sponsored by wealthy chaebols make any money. Why do you think Up and half of eSTRO got involved with gambling?
Yeah and this isn't Superbowl either. Why do you assume the advertising revenue is enough? There are many people who are organized to make things happen, what makes you think that they're making a solid profit? Do you have KeSPA's earning statements? Why don't you show me the billions they have raked in?
KeSPA is making a profit, but only because they exploit almost free labor. They're resisting Blizzard's demands for royalties on their IP because the ESPORTS market might not be sustainable with them.
If you really want to not talk about the law and what is morally correct, the Korean SC scene should probably be demolished as they're exploiting teenagers with dreams of playing a game for a living and taking them at the point where they should be worrying about their education and instead making them work 15 hour days and not gain any practical job skills. I'm a bit of a hypocrite because I enjoy watching the games, but quit acting like there's a moral high ground here.
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5003 Posts
Alright, let's make this one thorough. Let's see what I actually said here.
Your actual argument is that you don't care about the legal system
"Unfortunately, we are having an economic argument. I never cared for a legal argument -- anyone could tell you that Blizzard has the "right" legally."
Where does this say that I don't care about the legal system? All I have said is that, this argument that I am making is not a legalistic standpoint -- there would be no argument from a legalistic standpoint, and anyone would actually know this.
I'm making an Economic argument based on efficiency. I have made this utterly clear many times, which is something you have glossed over in my many posts I have made in response to you.
and you think KeSPA does a fanfuckingtastic job,
"KeSPA has signaled clearly that they care about eSports and wish to develop it. Or do you not understand what "necessary signals" are? They have more than proven themselves."
I never said that they were do a "fantastic" job. All I have said is that they have sent many signals stating that they care about the growth of eSports.
Perhaps my cynicism to the "Anti-KeSPA" retorts that everyone throws around as TeamLiquid is getting to you, however. All I have said was KeSPA is the best shot we have at making SC2 a professional sport, which I don't think is refutable.
therefore Blizzard should hand over control of their game.
"A win-win contract would be Blizzard helping out SC2 on the runway (ie, sponsor many tournaments, etc etc) and then Blizzard getting a share once the SC2 scene pays off. There is nothing wrong with Blizzard getting a nice slice of pie, in fact, it is their right as investors. Blizzard can help the SC2 scene materialize, and guarantee to make the SC2 scene a success."
"If Blizzard had a much clearer plan and vision, perhaps I would be supporting them. However, their signals are mixed -- their words say "we want eSports to happen", but everything they have done so far will hinder the development (Battle.net? Seriously?)."
It's even funnier that you chose to cite an IP argument, and then quickly backpedaled that you're not concerned about legality.
"But, before we can argue about justification on whether or not Blizzard deserves the royalties, we need to talk about the Economics behind Intellectual Property."
Bolded a key word.
When presented with evidence of their misconduct and the fact that they've strangled competition, you've just thrown out answers that completely ignore the reality of the KeSPA/chaebol relationship.
"I'm not too sure with the television negotiations with MBC/OGN, so I won't comment."
"Think of it this way. There's an alternative league to the MLB, and the MLB simply states that it is not recognized by the MLB, and the teams could compete there if they wished. However, some of the teams refuse to compete, and the league fails.
In this case, MLB did nothing wrong. It is the individual teams with vested interests."
The conflicts of interest extend to the very core of the organization.
"Now, it's not even fair to say "Blizzard's past is far less unscrupulous than KeSPA's". Blizzard never had to work with such a large professional scene that has hundreds, if not thousands of people employed. All they had to do is make the games and do generic customer support -- on the other hand, KeSPA has to play politician amongst different interest groups. If we're going to say statements like this, let's put it in proper context -- playing politician by definition has to be less scrupulous than simply creating games and "consumer support"."
Players are barred from forming a union. A strike would get them blacklisted.
Killing GOM. "Free Agency." Horrific work conditions. KeSPA's acts have been entirely consistent with a monopoly that is trying to wring as much short term profit out of something as possible and not an organization that cares about growth.
They don't have to play Starcraft, you know. What makes you think they dont have a choice to just stop playing, if the conditions are so bad?
If they are thinking about making a short term profit, why aren't they charging for tickets? Just please, answer that. No, "Advertising" isn't enough, because tickets are the most obvious seller.
You're not even presenting an economic argument. This is just an opinion piece on why Blizzard dr00lz and KeSPA r00lz, with a couple of economics terms thrown in incorrectly and nice formatting.
http://en.wikipedia.org/wiki/Signaling_(economics)
http://en.wikipedia.org/wiki/Economic_planning#Criticism
http://en.wikipedia.org/wiki/Intellectual_Property#Economics
Do you honestly think most Starcraft players make 20K a year? Most players play for nothing but housing and food or nominal contracts like 5K a year. Only the top players on teams sponsored by wealthy chaebols make any money. Why do you think Up and half of eSTRO got involved with gambling?
KeSPA is making a profit, but only because they exploit almost free labor. They're resisting Blizzard's demands for royalties on their IP because the ESPORTS market might not be sustainable with them.
Okay, let's see some stats on this. Go find me a legitimate article that states this.
Oh, and let's also see some profits these companies are making first from sponsoring those teams, and how much KeSPA makes.
Oh good, so do you want a professional esports market, or do you not want one?
If you really want to not talk about the law and what is morally correct, the Korean SC scene should probably be demolished as they're exploiting teenagers with dreams of playing a game for a living and taking them at the point where they should be worrying about their education and instead making them work 15 hour days and not gain any practical job skills. I'm a bit of a hypocrite because I enjoy watching the games, but quit acting like there's a moral high ground here.
I talked about what was Economically correct, not in respect to "money" or "markets" or whatever shallow understanding of economical concepts people have. What I'm talking about is specifically about the survival of eSports, which is the biggest deal. I have made this clear.
Why should I care about such a vague concept as morality?
In short, try and respond with a bit more grace and intelligence next time. I'll stop wasting my time responding to the silly simplified arguments now, I think.
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United States47024 Posts
On April 25 2010 19:37 Milkis wrote:
In order to exercise total control, there must be nothing that stands in Blizzard's way. One entity that has fought against Blizzard is KeSPA -- an interest group representing the many sponsors that have made Starcraft the game we know and love today.
Someone like Plexa or FakeSteve need to do an article explaining exactly where KeSPA fits into the scheme of Starcraft's development. Because too many newbies on this forum come in with the false impression KeSPA has been around since the beginning and has managed ESPORTS in Korea for the longest time, when, from my understanding, nothing could be farther from the truth. I would do it myself, but I admit that my knowledge is fairly limited, and mostly comes from bits and pieces picked up from more knowledgeable posters.
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5003 Posts
On April 26 2010 05:02 TheYango wrote:Show nested quote +On April 25 2010 19:37 Milkis wrote:
In order to exercise total control, there must be nothing that stands in Blizzard's way. One entity that has fought against Blizzard is KeSPA -- an interest group representing the many sponsors that have made Starcraft the game we know and love today. Someone like Plexa or FakeSteve need to do an article explaining exactly where KeSPA fits into the scheme of Starcraft's development. Because too many newbies on this forum come in with the false impression KeSPA has been around since the beginning and has managed ESPORTS in Korea for the longest time, when, from my understanding, nothing could be farther from the truth. I would do it myself, but I admit that my knowledge is fairly limited, and mostly comes from bits and pieces picked up from more knowledgeable posters.
Not sure how reliable Korea's Wiki article on KeSPA is, but KeSPA has been around since 1999, and they were KPGA before, which had monthly tours that grew to the MSL.
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you can't throw around the word "economics" and "efficiency" and magically end up with a valid argument. the reason kespa does not charge for admission tickets is because it was tried before and the fans got pissed. what you also have to consider is that kespa isn't some third party entity, they are a committee of team sponsors (i think) and their livelihood is tied to the success and control of the progaming scene. the more people watch sc, the more profitable it is for them, whether it be indirectly through marketing / exposure or directly through ad revenue.
whether it's a legal or economic argument, blizzard has control and kespa can't do anything about it. what does blizzard gain if they give in to kespas demands for free broadcasting rights? almost nothing. i suppose you can consider the idea that maybe leagues in korea will help drive sales but that in itself can only provide so much ROI for blizzard in return for relinquishing all their broadcasting rights. what blizzard is looking for is a symbiotic relationship with kespa. in return for some royalties, kespa gets blizzards approval to run leagues and possible influence in future design processes (aka it'd be nice if you could build in such in such as an overlay).
also, not that this has anything to do with anything else but it's common knowledge that unless you are at the top of your team you don't get paid all that much.
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5003 Posts
you can't throw around the word "economics" and "efficiency" and magically end up with a valid argument.
All my argument was that, this current situation isn't exactly pretty for the fate of eSports. Even if we are talking about simply money between Blizzard and KeSPA, this situation is clearly not pareto efficient.
So, yes, the argument is valid.
almost nothing. i suppose you can consider the idea that maybe leagues in korea will help drive sales but that in itself can only provide so much ROI for blizzard in return for relinquishing all their broadcasting rights
Professional SC2 scene => SC2 Survives Longer, SC2 becomes more competitive, free advertisement, Blizzard's reputation improves.
SC2 Survives Longer => Future Revenues increase.
SC2 becomes more competitive => More competitive players will be drawn to SC2 => More sales.
Free Advertisement => More people are aware of SC2 => Even greater reputation improvement
Blizzard's improvement in reputation => Future games get more hype
what blizzard is looking for is a symbiotic relationship with kespa. in return for some royalties, kespa gets blizzards approval to run leagues and possible influence in future design processes (aka it'd be nice if you could build in such in such as an overlay).
I'm not too sure that Blizzard is exactly looking for a symbiotic relationship, especially after the recent events. Even then, what signals have Blizzard sent, other than words?
But in general, I don't support Blizzard getting royalties -- if anything, the money should go the players.
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On April 26 2010 05:24 Milkis wrote:Show nested quote +you can't throw around the word "economics" and "efficiency" and magically end up with a valid argument. All my argument was that, this current situation isn't exactly pretty for the fate of eSports. Even if we are talking about simply money between Blizzard and KeSPA, this situation is clearly not pareto efficient. So, yes, the argument is valid. Show nested quote +almost nothing. i suppose you can consider the idea that maybe leagues in korea will help drive sales but that in itself can only provide so much ROI for blizzard in return for relinquishing all their broadcasting rights Professional SC2 scene => SC2 Survives Longer, SC2 becomes more competitive, free advertisement, Blizzard's reputation improves. SC2 Survives Longer => Future Revenues increase. SC2 becomes more competitive => More competitive players will be drawn to SC2 => More sales. Free Advertisement => More people are aware of SC2 => Even greater reputation improvement Blizzard's improvement in reputation => Future games get more hype Show nested quote +what blizzard is looking for is a symbiotic relationship with kespa. in return for some royalties, kespa gets blizzards approval to run leagues and possible influence in future design processes (aka it'd be nice if you could build in such in such as an overlay). I'm not too sure that Blizzard is exactly looking for a symbiotic relationship, especially after the recent events. Even then, what signals have Blizzard sent, other than words? But in general, I don't support Blizzard getting royalties -- if anything, the money should go the players.
giving up broadcasting rights to simply "improve their image" is a losing proposition. do you think blizzard honestly needs to improve their image at this point? how much profit do you think they would forgo in order to achieve this? blizzard has their own marketing team and can probably generate more hype more efficiently than giving up broadcasting rights to kespa.
the sc2 progaming scene in korea driving sales is questionable at best. driving sales of a product is a short term gain, even if everyone in korea buys a copy of sc2 that is still only a finite amount and thus finite profit. it seems far more profitable for blizzard to seek royalties for broadcasting rights which will both drive sales and continual revenue.
how is blizzard not looking for a symbiotic relationship? if they weren't they would just flat out deny broadcasting rights and do it themselves. you are basing your argument on the large assumption that blizzard is being unreasonable in negotiating.
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On April 26 2010 05:24 Milkis wrote:Show nested quote +you can't throw around the word "economics" and "efficiency" and magically end up with a valid argument. All my argument was that, this current situation isn't exactly pretty for the fate of eSports. Even if we are talking about simply money between Blizzard and KeSPA, this situation is clearly not pareto efficient. So, yes, the argument is valid.
oh lol yes it is
giving more power to blizzard hurts kespa
giving more power to kespa hurts blizzard
situation is pareto efficient
q.e.d.
stop pretending u know economics
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5003 Posts
On April 26 2010 05:57 Caller wrote:Show nested quote +On April 26 2010 05:24 Milkis wrote:you can't throw around the word "economics" and "efficiency" and magically end up with a valid argument. All my argument was that, this current situation isn't exactly pretty for the fate of eSports. Even if we are talking about simply money between Blizzard and KeSPA, this situation is clearly not pareto efficient. So, yes, the argument is valid. oh lol yes it is giving more power to blizzard hurts kespa giving more power to kespa hurts blizzard situation is pareto efficient q.e.d. stop pretending u know economics
Maybe in your simplified view -- which is precisely why I haven't bothered responding to your first post.
The situation is not pareto efficient. The current situation is "Blizzard Enforced IP" and "KeSPA does not adopt SC2". This situation is "Blizzard takes a huge risk with SC2" and "KeSPA eventually dies" -- the lose-lose scenario (well, not quite as bad for Blizzard) Even the event where Blizzard Enforces IP and KeSPA cooperates, KeSPA is better off, and Blizzard is even better off.
You assume that this agreement has already happened. If we were already in the agreement, then yes, we are pareto efficient. But,if we're still in the "Enforce/Not Adopt" play, giving more power to Blizzard hurts KeSPA -- but it kills KeSPA. Blizzard knows this, and that's why they were allowed to make ultimatums such as this.
Perhaps it is you who don't understand economics, or, perhaps, understand it in such a simplistic way that whatever you know doesn't matter. Don't simplify everything and pretend it's that simple.
PS: Nice blog posts. Clearly, taking Econ 200~201 makes you believe you understand anything about economics. Maybe if you were able to actually apply Economics in an interesting way you wouldn't have to ask TL for ideas for Experimental Econ. I have a pretty good feeling I know exactly who you are (how freaky), and if you are that individual, then I'll just giggle, shrug you off, and move on.
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United States47024 Posts
On April 26 2010 05:14 Milkis wrote:Show nested quote +On April 26 2010 05:02 TheYango wrote:On April 25 2010 19:37 Milkis wrote:
In order to exercise total control, there must be nothing that stands in Blizzard's way. One entity that has fought against Blizzard is KeSPA -- an interest group representing the many sponsors that have made Starcraft the game we know and love today. Someone like Plexa or FakeSteve need to do an article explaining exactly where KeSPA fits into the scheme of Starcraft's development. Because too many newbies on this forum come in with the false impression KeSPA has been around since the beginning and has managed ESPORTS in Korea for the longest time, when, from my understanding, nothing could be farther from the truth. I would do it myself, but I admit that my knowledge is fairly limited, and mostly comes from bits and pieces picked up from more knowledgeable posters. Not sure how reliable Korea's Wiki article on KeSPA is, but KeSPA has been around since 1999, and they were KPGA before, which had monthly tours that grew to the MSL.
From the thread about Blizzard ceasing negotiations. Obviously WaxAngel isn't an official source, but given how well he keeps the rest of TL informed about Korean SC news, I would consider him adequately informed about the subject:
On April 26 2010 06:06 Waxangel wrote:I think people should keep something very important things in mind when they assess what KeSPA has done for e-sports. OnGameNet and MBCGame were running Starcraft tourneys perfectly fine for four years before KeSPA came into place. All of the early pioneering and laying of the foundations was done by the TV companies, the very early Pro-game teams (no big corporate sponsors for most of them, many of them were really quite poor), and the progamers who stuck through it when there was barely any money. After it became apparent that E-sports had a chance of having a viable mid-term future, KeSPA came into play. KeSPA is a strange organization by the way, it's more accurate to call it the "E-sports Team OWNER's association," as it's controlled by the interests of the pro-game teams (the NFL, MLB, NBA are ostensible different, tho one could say they cater to the owners to a fault). KeSPA's primary creation is the pro-league, not exactly the most original idea, but part of their vision to make Starcraft a team centric sport. The only league they actually operate is the proleague, the OSL and MSL are just tournaments they officially recognize. Five day proleague weeks is part of their strategy to make proleague the important league (and in many ways it is). KeSPA's gutsiest and most reckless move was when they tried to sell the broadcasting rights of their Starcraft leagues. Essentially, they were making OGN and MBCGame pay to broadcast the content they had created without KeSPA's help years ago, and without any design to pay Blizzard any royalties for the direct profit they would be making off their game. Anyway, some kind of organization was always going to be needed, but KeSPA is a very incompetent and selfish incarnation 
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On April 26 2010 06:12 Milkis wrote:Show nested quote +On April 26 2010 05:57 Caller wrote:On April 26 2010 05:24 Milkis wrote:you can't throw around the word "economics" and "efficiency" and magically end up with a valid argument. All my argument was that, this current situation isn't exactly pretty for the fate of eSports. Even if we are talking about simply money between Blizzard and KeSPA, this situation is clearly not pareto efficient. So, yes, the argument is valid. oh lol yes it is giving more power to blizzard hurts kespa giving more power to kespa hurts blizzard situation is pareto efficient q.e.d. stop pretending u know economics Maybe in your simplified view -- which is precisely why I haven't bothered responding to your first post. The situation is not pareto efficient. The current situation is "Blizzard Enforced IP" and "KeSPA does not adopt SC2". This situation is "Blizzard takes a huge risk with SC2" and "KeSPA eventually dies" -- the lose-lose scenario (well, not quite as bad for Blizzard) Even the event where Blizzard Enforces IP and KeSPA cooperates, KeSPA is better off, and Blizzard is even better off. You assume that this agreement has already happened. If we were already in the agreement, then yes, we are pareto efficient. But,if we're still in the "Enforce/Not Adopt" play, giving more power to Blizzard hurts KeSPA -- but it kills KeSPA. Blizzard knows this, and that's why they were allowed to make ultimatums such as this. Perhaps it is you who don't understand economics, or, perhaps, understand it in such a simplistic way that whatever you know doesn't matter. Don't simplify everything and pretend it's that simple.
First off, you state that yes, in my scenario, the situation is pareto efficient. So you agree with me.
Now we move onto your newly specified argument, that this situation is not pareto efficient. Your argument suggests that it makes no sense that this situation happen because of this. I tend to agree, but...
let's try this in a game theory situation
Two players, Blizzard and Kespa
Player 1, Kespa has two choices: Cooperate or Defect
Player 2, Blizzard has two choices: Cooperate or Defect.
In terms of priorities we can say that Kespa prefers:
DC>CC>DD>CD
We can say Blizzard prefers:
CC>CD>DD>DC
because this is what you're arguments states. Kespa would rather have a monopoly, then cooperate with blizzard, then refuse to cooperate, then finally let blizzard have everything. Blizzard would rather cooperate, then have a monopoly, then refuse to cooperate, then let Kespa have a monopoly.
What can we clearly see? Kespa would always defect as it is strictly dominant. Blizzard is (probabilistically) indifferent between cooperating and defecting. However, given the response functions, we would predict that Blizzard would defect in response to a Kespa defect. Now you say that this situation is not pareto efficient. If Blizzard cooperates, Kespa improves and blizzard weakens. If Kespa cooperates, Blizzard improves and Kespa weakens. If both choose to cooperate, both benefit, but Blizzard benefits more than Kespa does (relatively). This isn't prisoner's dillemma (as their preferences are different) but because of the way response functions are set up, Blizzard will end up arriving at the same strict Nash equilibrium as Kespa (that proceeds to not be Pareto efficient). If we suppose that changes can only be made by one party at a time, and both parties cannot "choose" to cooperate at the same time, then it would not be pareto efficient. And seeing how negotiations have been broken off, this situation appears to be the status quo.
Thus, depending on your definitions, the current situation may or may not be pareto efficient. IT is, however, a stable Nash equilibrium, so it's not that surprising that they're in this state.
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5003 Posts
giving up broadcasting rights to simply "improve their image" is a losing proposition. do you think blizzard honestly needs to improve their image at this point? how much profit do you think they would forgo in order to achieve this? blizzard has their own marketing team and can probably generate more hype more efficiently than giving up broadcasting rights to kespa.
the sc2 progaming scene in korea driving sales is questionable at best. driving sales of a product is a short term gain, even if everyone in korea buys a copy of sc2 that is still only a finite amount and thus finite profit. it seems far more profitable for blizzard to seek royalties for broadcasting rights which will both drive sales and continual revenue.
That honestly depends, and I'm kind sick of arguing about it -- I've made posts in WaxAngel's thread and this thread covering this already. I have already called this viewpoint myopic.
how is blizzard not looking for a symbiotic relationship? if they weren't they would just flat out deny broadcasting rights and do it themselves. you are basing your argument on the large assumption that blizzard is being unreasonable in negotiating.
It honestly looks to me like Blizzard wants to absorb KeSPA. This is the second part of my post.
From the thread about Blizzard ceasing negotiations. Obviously WaxAngel isn't an official source, but given how well he keeps the rest of TL informed about Korean SC news, I would consider him adequately informed about the subject:
Either the Korean Wiki is wrong, or WaxAngel is wrong. When I'm feeling more sane, I'll start doing some research on Fomos.
First off, you state that yes, in my scenario, the situation is pareto efficient. So you agree with me.
I had to ASSUME your scenario, since you obviously did not make it obvious. It's quite amusing how you applied YOUR assumption to MY analysis to say that "I am wrong"
Two players, Blizzard and Kespa
Player 1, Kespa has two choices: Cooperate or Defect
Player 2, Blizzard has two choices: Cooperate or Defect.
In terms of priorities we can say that Kespa prefers:
DC>CC>DD>CD
We can say Blizzard prefers:
CC>CD>DD>DC
If you're making an analysis make it clear what the actions are referring to. First step to any real economic analysis.
KeSPA can defect (no SC2), or Cooperate (SC2)
Blizzard can defect (charge royalties) or Cooperate (dont charge royalties)
I'm going to use these terms since it reflects the situation a lot better.
KeSPA prefers
CC > DD >=< CD = DC
Blizzard's prefers
CD > DD > CC = DC
What can we clearly see? Kespa would always defect as it is strictly dominant. Blizzard is (probabilistically) indifferent between cooperating and defecting. However, given the response functions, we would predict that Blizzard would defect in response to a Kespa defect. Now you say that this situation is not pareto efficient. If Blizzard cooperates, Kespa improves and blizzard weakens. If Kespa cooperates, Blizzard improves and Kespa weakens. If both choose to cooperate, both benefit, but Blizzard benefits more than Kespa does (relatively). This isn't prisoner's dillemma (as their preferences are different) but because of the way response functions are set up, Blizzard will end up arriving at the same strict Nash equilibrium as Kespa (that proceeds to not be Pareto efficient). If we suppose that changes can only be made by one party at a time, and both parties cannot "choose" to cooperate at the same time, then it would not be pareto efficient. And seeing how negotiations have been broken off, this situation appears to be the status quo.
The argument hinges on KeSPA's preferences, on DD and CD. If the current eSports industry cannot survive with Blizzard Royalties, then KeSPA is better off not picking up SC2, and there is no Equilbrium. If the eSports Industry can survive, then CD > DD, and we would have an equilibrium at CD.
Yet, remember, this is only PREFERENCES, ie, what Blizzard and KeSPA has stated as preferences. I have continually argued that CC >= CD for Blizzard, as there are much, much, positive externalties that benefits Blizzard. I'm not going to bother arguing that again. I believe the pareto optimal option will be CC -- at most, CD can also be pareto optimal, under certain conditions.
Remember that in my main analysis I did not give numbers for a reason. I'm not modeling the KeSPA/Blizzard relationships, I'm modeling their impact on eSports.
In the meanwhile, I guess I'm done arguing about this.
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On April 26 2010 06:53 Milkis wrote:Show nested quote +giving up broadcasting rights to simply "improve their image" is a losing proposition. do you think blizzard honestly needs to improve their image at this point? how much profit do you think they would forgo in order to achieve this? blizzard has their own marketing team and can probably generate more hype more efficiently than giving up broadcasting rights to kespa.
the sc2 progaming scene in korea driving sales is questionable at best. driving sales of a product is a short term gain, even if everyone in korea buys a copy of sc2 that is still only a finite amount and thus finite profit. it seems far more profitable for blizzard to seek royalties for broadcasting rights which will both drive sales and continual revenue. That honestly depends, and I'm kind sick of arguing about it -- I've made posts in WaxAngel's thread and this thread covering this already. I have already called this viewpoint myopic. Show nested quote +how is blizzard not looking for a symbiotic relationship? if they weren't they would just flat out deny broadcasting rights and do it themselves. you are basing your argument on the large assumption that blizzard is being unreasonable in negotiating. It honestly looks to me like Blizzard wants to absorb KeSPA. This is the second part of my post. Show nested quote +From the thread about Blizzard ceasing negotiations. Obviously WaxAngel isn't an official source, but given how well he keeps the rest of TL informed about Korean SC news, I would consider him adequately informed about the subject: Either the Korean Wiki is wrong, or WaxAngel is wrong. When I'm feeling more sane, I'll start doing some research on Fomos. Show nested quote +First off, you state that yes, in my scenario, the situation is pareto efficient. So you agree with me. I had to ASSUME your scenario, since you obviously did not make it obvious. It's quite amusing how you applied YOUR assumption to MY analysis to say that "I am wrong" Show nested quote +
Two players, Blizzard and Kespa
Player 1, Kespa has two choices: Cooperate or Defect
Player 2, Blizzard has two choices: Cooperate or Defect.
In terms of priorities we can say that Kespa prefers:
DC>CC>DD>CD
We can say Blizzard prefers:
CC>CD>DD>DC
If you're making an analysis make it clear what the actions are referring to. First step to any real economic analysis. KeSPA can defect (no SC2), or Cooperate (SC2) Blizzard can defect (charge royalties) or Cooperate (dont charge royalties) I'm going to use these terms since it reflects the situation a lot better. KeSPA prefers CC > DD >=< CD = DC Blizzard's prefers CD > DD > CC = DC Show nested quote +
What can we clearly see? Kespa would always defect as it is strictly dominant. Blizzard is (probabilistically) indifferent between cooperating and defecting. However, given the response functions, we would predict that Blizzard would defect in response to a Kespa defect. Now you say that this situation is not pareto efficient. If Blizzard cooperates, Kespa improves and blizzard weakens. If Kespa cooperates, Blizzard improves and Kespa weakens. If both choose to cooperate, both benefit, but Blizzard benefits more than Kespa does (relatively). This isn't prisoner's dillemma (as their preferences are different) but because of the way response functions are set up, Blizzard will end up arriving at the same strict Nash equilibrium as Kespa (that proceeds to not be Pareto efficient). If we suppose that changes can only be made by one party at a time, and both parties cannot "choose" to cooperate at the same time, then it would not be pareto efficient. And seeing how negotiations have been broken off, this situation appears to be the status quo.
The argument hinges on KeSPA's preferences, on DD and CD. If the current eSports industry cannot survive with Blizzard Royalties, then KeSPA is better off not picking up SC2, and there is no Equilbrium. If the eSports Industry can survive, then CD > DD, and we would have an equilibrium at CD. Yet, remember, this is only PREFERENCES, ie, what Blizzard and KeSPA has stated as preferences. I have continually argued that CC >= CD for Blizzard, as there are much, much, positive externalties that benefits Blizzard. I'm not going to bother arguing that again. I believe the pareto optimal option will be CC -- at most, CD can also be pareto optimal, under certain conditions. Remember that in my main analysis I did not give numbers for a reason. I'm not modeling the KeSPA/Blizzard relationships, I'm modeling their impact on eSports. In the meanwhile, I guess I'm done arguing about this.
You've continually stated that completely caving in to KeSPA is positive for Blizzard, but despite how much you try to justify your viewpoint by trying to couch it in economic terms, you've shown no actual evidence that the externalities you've stated have led to any actual benefits to Blizzard. Starcraft was amazingly popular in Korea before eSports. Most of the groundwork in the eSports scene was done before KeSPA stepped in. How many additional sales did Blizzard get? Are you taking into account how many players just play in PC Bangs and how nowadays many of them just play on private servers with pirated copies? Can you prove the success of WCIII or WoW in Korea is anything KeSPA related?
Furthermore, my measuring things in their "impact on eSports", you're assuming that the current system is optimal and must be protected. If eSports is so fragile that royalty payments are going to destroy them, perhaps they need to be torn down and built back up with a new system that is less tenuous and can actually pay players.
I'm a law student and not an economics major, but I feel like both of your cooperation analyzes are flawed because they don't take into account the fact that the real doomsday scenario for KeSPA is that Blizzard decides to enforce copyright protections on SC1 and that KeSPA fails to use political connections to protect themselves.
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Starcraft was amazingly popular in Korea before eSports. Most of the groundwork in the eSports scene was done before KeSPA stepped in.
Sorry, I don't buy that. From what I can tell, any naysayers put in some arbitrary divisions between what KeSPA is try and divide it to "before they were evil" and treat it like some separate entity.
As a law student, you should understand the need for an organizational, governing body to get things done. Fan tournaments may occur naturally, games may be popular, but calling what they had in Korea or anywhere else "eSports" before KeSPA is ridiculous at best. KeSPA has been around since 1999, where they had monthly KPGA tours, ffs. I don't think you can't argue this at all.
How many additional sales did Blizzard get? Are you taking into account how many players just play in PC Bangs and how nowadays many of them just play on private servers with pirated copies?
Perhaps, they wouldn't be playing on private servers if Blizzard actually managed to pull off what the people wanted? You have to realize -- why would all those player on LAN on PC Bangs or on iCCuP over battle.net? That's because they all offered something that Blizzard did not, and Blizzard lost. Imagine if Battle.net was actually decent -- they would have definitely sold more copies.
I'm also going to attribute a huge majority of the SC2 hype as a consequence of SC proscene. There is no doubt that the SC proscene served not only as an inspiration to many players but also organzied communities like TL. Without KeSPA, TL wouldn't be what it is today. TL has a huge focus on the Korean Professional scene. Without KeSPA, TL wouldn't be such a source that Blizzard would even bother contacting. In all, the existence of such a professional circuit has centralized the community, which led to more hype.
Can you prove the success of WCIII or WoW in Korea is anything KeSPA related?
Korea has a huge MMORPG market. If KeSPA were able to create a competitive WoW GvG/PvP scene and tournaments, no doubt that many people who were playing on other MMOs would join over to WoW instead. I don't think you can doubt this.
Of course the games were successful. There's no doubt for that. But why is that all due to Blizzard? What matters is the community -- communities that keep the game alive. There's no doubt the proscene kept the BW community alive and extremely active.
You've continually stated that completely caving in to KeSPA is positive for Blizzard, but despite how much you try to justify your viewpoint by trying to couch it in economic terms, you've shown no actual evidence that the externalities you've stated have led to any actual benefits to Blizzard.
Caving into KeSPA means no royalties. Royalties are an essentially a tax on eSports -- meaning that it'll hinder the growth of eSports. Any economic model will support this.
Secondly, Blizzard having control over the entire eSports scene? That will lead to a tremendous amount of uncertainty, in amount of money eSports organizers will need to pay, in amount of control they will actually have, in amount of effort Blizzard will actually put in on the eSports scene (hint: it's all words, and they've only done things to hinder it, from what I can tell, so far). This uncertainty alone makes it difficult for KeSPA to agree with Blizzard unless Blizzard sends some excellent signals that they are going to be working with KeSPA in promoting eSports and not just $$$. Of course KeSPA also cares about money -- but their livelihood depends on eSports, unlike Blizzard, who see it only as a cash cow that they can milk and move on.
Furthermore, my measuring things in their "impact on eSports", you're assuming that the current system is optimal and must be protected. If eSports is so fragile that royalty payments are going to destroy them, perhaps they need to be torn down and built back up with a new system that is less tenuous and can actually pay players.
I'll agree on this -- and I want competition to make KeSPA behave more like a competitive firm, rather than what they have now. But, that's another issue separately. There are a lot of issues within KeSPA -- but fuck, they're miles better than what Blizzard could ever pull off at this point.
I'm a law student and not an economics major, but I feel like both of your cooperation analyzes are flawed because they don't take into account the fact that the real doomsday scenario for KeSPA is that Blizzard decides to enforce copyright protections on SC1 and that KeSPA fails to use political connections to protect themselves.
In the opening post:
"In the end, SC1 will eventually die (or perhaps, Blizzard blocks KeSPA off), and SC2 has a high probability of failing to become a professional, competitive eSport. "
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