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5003 Posts
Soviet Russia and the Economic Calculation Problem
There once was a time people believed that a centralized command economy was a viable alternative over the free market. In theory, it was utopia, where all the profits made by the big companies would be shared amongst the people, while the government exercised control over every company and had it worked out just right. The entire economy would be working towards a common goal -- the happiness of everyone.
Yet, things didn't quite work out. Economists have often pointed to the Soviet Union's economy, where there would be piles and piles of merchandise no one wanted to buy, while there would be miles and miles of people just waiting in line to buy undershirts. While in theory, the government would be able to avoid the wastefulness that came with capitalism, in practice what happened was the exact opposite -- resources were wasted, and the unsustainable economic conditions slowly worked towards the collapse of the Soviet Union.
The core of the problem that was suffered by the Soviert Union has been called the "Economic Caclulation Problem". In a gist, it states that without a properly operating price mechanism, it is difficult to rationally distribute resources. This is because price matches incentives -- if there is a shortage, then prices go up, lowering incentives to buy, but increasing incentives to sell, and vice versa in the case of a surplus. When there is one organization in control over the distribution of the resources, then without perfect knowledge of incentives, it is difficult to hope for an efficient outcome.
Blizzard, through their new Battle.net policy, is attempting to grab total control over eSports. That is, Blizzard is attempting to create a centralized command economy through Battle.net.
Step One: Limit Freedom
When one entity exercises total control over the economy, the first thing that happens is the the limitation of freedom. After all, the entity needs to establish that it is the organization that holds control over how the resources should be distributed -- you follow it's will, and your will does not exist.
It is no surprise that KeSPA has resisted this move the entire way through. It isn't just Blizzard storming in and asking for royalties, but Blizzard storming in, demanding that the entire industry must be under total control over Blizzard, and asking for royalties. Perhaps this restriction of freedom was not a part of Blizzard's initial intentions -- perhaps, Blizzard simply wanted to cash in on what they believed was rightfully theirs. Yet, in order to tame the billion dollar industry Blizzard has successfully restricted the freedom of the entire competitive gaming community. There would be no LAN play, there would be no alternative gateways of multiplayer, but everything must be played through Battle.net, where players won't even be able to switch regions to compete against other countries.
Of course, this would only be a minor problem, if Blizzard has proven itself in the past to develop the competitive scene.
Step Two: Step Over Boundaries and Take It Over
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.
There is no doubt that Blizzard wants access to KeSPA's resources. However, Blizzard, by using and extending it's rights over "Intellectual Property", simply attempted to absorb KeSPA -- That KeSPA will be using Battle.net, and that, any competitions or broadcasting that comes out as a result is the property of Blizzard. Rather than helping KeSPA take Starcraft 2 off of the runway and into the air, Blizzard has chosen the route of simply taking control of everything KeSPA could do, and demand that they pay royalties.
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.
+ Show Spoiler +
The main economical justification behind Intellectual Property has been to protect the artists from pirates. The argument goes as follows.
Suppose that a firm decides to spend some amount, let's say, 5 million dollars, to create a new product. This 5 million dollar becomes a fixed cost that the firm pays in advance. Let's suppose that it takes the firm 20 dollars each to make copies of the product. They decide to sell the product for 50 dollars each, using the 30 dollars from each product to first pay off the fixed cost, and then to make a profit.
However, suppose that there is no concept of Intellectual Property and patent. Upon the creation of the product, there are other firms who take a hold of the product, and reverse engineer the product for 10,000 dollars. They then sell the product for 25 dollars each, since they need to make so much less in order to for them to pay off the fixed cost and make the profit.
It does not matter if the copycat firms' product is slightly inferior -- because this directly costs the original firm sales. As competition increases, price approaches marginal cost -- eventually, firms will make very little money by selling the product. This is fine for the copycat firms -- who probably already paid off the fixed cost. But the original firm takes a huge loss for developing the product.
Hence, we have Intellectual Property -- to protect firms who create products, and to prevent firms from copying them.
The purpose of Intellectual Property is to promote creativity, research and developement for firms. Without Intellectual Property -- the original firm will not be able to make a profit by developing new products.
Under this argument, Blizzard should not need to charge KeSPA royalty -- rather, it should be paying KeSPA to pick up the game, supporting the game, as it would take an extremely myopic view to argue that a professional SC2 scene would not boost sales phenomenally. These boosted sales are enough to justify the eSports scene.
Blizzard knows that charging royalty would make KeSPA step out of the market. One reasoning behind this is that KeSPA is clearly not a profit maximizing firm. While many people may argue that they wouldn't be in it if it weren't making them money, but Starcraft eSports has definitely been something that has not been maximizing -- one evidence for this is that they have not charged for tickets for many of the major events. Secondly, the argument would only apply if there was competition involved in eSports -- if there was competition, surely, we can assume that it would be profit maximizing. Yet the transient existance of Gom leagues has not affected the behavior of eSports -- if a major competitor left the market, then why hasn't the eSports changed in response -- that is, why aren't there signs that KeSPA is using their monopoly powers?
The Fate of eSports
Given this, Blizzard and KeSPA's actions can be modelled simply by game theory.
Blizzard can either choose to "Enforce IP" or "Not Enforce IP". KeSPA can choose to "Adopt SC2" or "Not Adopt SC2".
If Blizzard enforces IP, and KeSPA adopts SC2 -- then the best model I can think of regarding this is taxation -- royalties are equivalent to a proportional tax. In case of a proportional tax -- the firm simply brings the tax over the consumers. Rather than a free event, Starcraft 2 will likely have tickets you need to purchase, and perhaps, more commercialized things to maximize profits (although, it won't take long for Blizzard to demand rights over these too). While this may be a benefit to many people, in the end, it is a cost to consumers.
But don't assume that KeSPA will not be hurt -- KeSPA will now be under 100% control of Blizzard. This loss of freedom will make it a loss to KeSPA. In the meanwhile, Blizzard makes it big -- the competitive eSports boosts SC2 sales, and the royalties it collects, this is the best result for Blizzard.
If Blizzard enforces IP, and KeSPA does not adopt SC2 -- then first, Blizzard loses royalties and the boost in sales. There is little chance that without the support of KeSPA, Blizzard will be able to suceed in Korea. There are simply too many things working against Blizzard -- the connections KeSPA has with the broadcasting firms, the government, the progamers themselves.
The end result is that Kespa doesnt pick up SC2, and will continue simply with SC1. This means simply just means that SC2 wont get as big as SC1, which is no big deal, in the long run. But remember what Blizzard is trying to do -- they want SC2 to replace SC1.
This pretty much means Blizzard has failed to accomplish what they wanted to do. No matter how good SC2 is, this is a negative signal on the company, and simply states that SC1's success wasn't replicated. To us who keep up with this stuff, we know better, but to the masses, this means a lot. "Why is there a SC1 proscene but not a SC2 proscene?" That question will speak for itself.
While many argue that there will be a proscene outside of a Korea -- this is very unlikely to happen, for many reasons that other people have covered better. Here is a few sampling of their posts.
On April 25 2010 15:23 p4NDemik wrote:Most here foster hope that a competitive SC2 scene will equal if not surpass BW's success in Korea and I'm saying the most likely avenue to get to that point is through KeSPA. Could a non-KeSPA backed SC2 scene reach that point? I'm not going to absolutely 100% rule it out, but I don't believe it's what we as fans should be crossing our fingers for.
On April 25 2010 16:48 StarcraftMan wrote:For those who believe Blizzard and us ESports fan have nothing to lose, again you are wrong. You cannot duplicate Kespa's infrastructure setup, Kespa's relations with MBC and OGN, and Kespa's relations with the media in one easy step. Don't forget that Kespa has influence over the government, the media, and Korean e-sports scene. If Blizzard tries to push SC2 as an Esport on GOMTV, it could very well fail if Kespa is fighting Blizzard every step of the way. At the end of the day, not only can the SC1 E-Sports scene implode, but SC2 as an E-Sport may never take off for the same reasons.
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.
If Blizzard does not enforce IP, and KeSPA adopts SC2 -- Then while KeSPA is able to run the formats identical to what we have with Starcraft: Broodwar, there is still a significant risk involved: Is Starcraft 2 actually good enough for a pro scene?
There is no way I can answer this question -- I know little to nothing about Starcraft 2. However, there is still a risk involved. 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 does not enforce IP, and KeSPA does not adopt SC2 -- Won't happen.
Step 3: Enforcing of Standards and the Competitive Decline
Blizzard, in the end, has chosen to enforce IP, through Battle.net centralization. Yet, this has far more repercussions than just on the fate of professional eSports.
With centralization comes a set of standards that everyone is forced to agree to -- a set of ideals, regarding what multiplayer Starcraft 2 is supposed to look like. This is because even if fans disagree, they are not able to create an alternative gateway to support their cause -- they are stuck with what Blizzard can offer through Battle.net. We will not be able to play with friends over LAN, nor will we be able to choose alternative services that picked up the ball on where Blizzard has left off (see: iCCup and the anti-hack launcher).
It is true that Blizzard has learned from the community through Brood War, but it is far-fetched to assume that Blizzard has learned everything they needed to do. Whether it be the AntiHack Launcher or replay analyzers, there are many things that Blizzard has only learned through fans demonstrating the feasibility. With centralization, this is no longer an option -- less you break Blizzard's terms of service. In best case scenario, Blizzard is on the ball on every issue -- deals with maphackers and laghackers while continually updating the best maps to play competitively. Worst case scenario, we're stuck with Battle.net, and it'd be akin to being forced to play on Battle.net over iCCup on Starcraft today.
Now, there is no doubt that I am painting these words to make my case extreme. In reality, perhaps Blizzard will be a bit more fair to the competitive community. Yet, there are many mixed signals Blizzard has sent over the past about eSports, professional gaming, and competitive play, and it'd be nothing but a disappointment if they were to err, and we are left in Starcraft 2 simply something that is called eSports only by name, the lack of professional gaming, and a laggy game that slowly walks the road traveled by many other RTSes -- the road to obscurity. It is this fear that compelled me to write this post.
 
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Very sad story, indeed.
game theory is sweet btw.
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I agree with a lot of what you say, especially with regards to the lack of complete control allowing other parties to build their own useful tools to supplement what Blizzard had originally provided.
There's no way Blizzard can internally replicate the pool of ideas from other players and the ability of everyone else to realize these ideas. All the tools we have today are because Blizzard does not have control completely over Brood War, which is what they seem to be trying to do with SC2.
And despite Activision-Blizzard's prowess, they don't have the expertise, experience, or resources to assemble the organization, broadcast, and execution of a professional game scene.
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Are you high on something? KeSPA is the one controlling and strangling the free market. Have you taken a look at their ridiculous player contracts? They literally caused the scandal to happen by severely underpaying players.
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Sadly i don't think there are a good guy and a bad guy in this story. Two entities are just struggling for money and power.
And when two elephants fight, the grass suffers...
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i really really REALLY hopes that sc2 WILL be the new sc:bw
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United States22883 Posts
Your thread reads like pure propaganda.
Blizzard, through their new Battle.net policy, is attempting to grab total control over eSports. Patently untrue.
That is, Blizzard is attempting to create a centralized command economy through Battle.net. What? Blizzard's actions are extremely capitalistic. They're not taking control of distribution, they're trying to license it out. They are a private company and they've identified what they believe to be in their best interests. If they take control and their ESPORTS model doesn't work, they'll adjust. We're not talking about basic human rights; THEY ARE NOT A GOVERNMENT.
Portraying KeSPA as some type of freedom fighter is pushing the boundaries of absurdity. I have a feeling that you're either an excellent troll trying to rile people up or see what you can make idiots agree to, or simply that you work for KeSPA.
KeSPA -- an interest group representing the many sponsors that have made Starcraft the game we know and love today. How have the chaebols changed the game of Starcraft? Not a single way. None at all. The game is unchanged, because of them. They're responsible for viewer acceptance, enthusiasm, etc. but they have not touched the game. While the effectiveness of their past promotions are unquestionable, this is a totally different era of gaming. KeSPA and the Korean companies helped create viewership (and in this case, your market) but that does not entitle them to control over it. Blizzard's stipulations are fairly standard and will actually serve to open up your pseudo-market even further by introducing competition TO KeSPA. The same cry was heard when Valve introduced LAN royalty fees on CS 1.6 and Steam, and following that, 1.6's competitive scene actually boomed. I doubt there's causation there, but the point is that it didn't hinder development.
I'm not sure this is any different than a company choosing not to sell their products in a specific store. Not everyone wants to sell their shit in Walmart, even if they could potentially sell more. KeSPA is a shady business partner, and any short term gain Blizzard would get by immediate acceptance of SC2 could be completely offset in the future by the organization's lack of oversight, planning, etc.
Under this argument, Blizzard should not need to charge KeSPA royalty -- rather, it should be paying KeSPA to pick up the game, supporting the game, as it would take an extremely myopic view to argue that a professional SC2 scene would not boost sales phenomenally. Completely incorrect understanding of IP. Did Blizzard make money in Korea? Yes. But they should have made a lot more, not simply through broadcasting but the PC Bangs as well. Your argument is akin to saying that pirating Photoshop should be allowed, because it brought Adobe more Photoshop users. Is that true? Yes. Does that justify it? Absolutely not. Adobe and Blizzard have their own products and their own business strategies. I would venture to say that MOST IMMEDIATE $$$ is not their primary goal.
Blizzard knows that charging royalty would make KeSPA step out of the market. One reasoning behind this is that KeSPA is clearly not a profit maximizing firm. We know KeSPA is inefficient, but that doesn't mean they're not trying to be.
one evidence for this is that they have not charged for tickets for many of the major events. Hardly evidence at all. They get people to go to malls owned by the companies that fuel the organization. Just because there's no direct transaction taking place between viewers and the organization doesn't mean they're not behaving rationally.
why aren't there signs that KeSPA is using their monopoly powers? Hi, you must be new to Starcraft.
Everything else in your post is complete speculation. If Blizzard cuts off SC1 and denies KeSPA access to SC2, then the industry just evaporates? What happened to your grand analogy to a market? The 3 million Korean viewers of OGN/MBC going to turn to CnC 18 instead? Or I guess KeSPA will just pick a new game, because the viewers (read: customers) will buy what's presented to them? Oh, how capitalistic you've become!
It is this fear that compelled me to write this post. Yeah, we'll see...
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5003 Posts
I have a feeling you only read select portions of my post considering you have missed my point completely.
What? Blizzard's actions are extremely capitalistic. They're not taking control of distribution, they're trying to license it out. They are a private company and they've identified what they believe to be in their best interests. If they take control and their ESPORTS model doesn't work, they'll adjust.
A lot of companies are criticized all the time for limiting freedom of their customers. While they're simply trying to license out the distribution, the sideeffects (where's my LAN? Why should I have to play with lag?) are clear. What companies decide in their best interests doesn't lead to the most efficient outcome?
Portraying KeSPA as some type of freedom fighter is pushing the boundaries of absurdity. I have a feeling that you're either an excellent troll trying to rile people up or see what you can make idiots agree to, or simply that you work for KeSPA.
In no way I portrayed KeSPA as a freedom fighter -- I simply portrayed them as an organization getting damaged by this.
How have the chaebols changed the game of Starcraft? Not a single way. None at all. The game is unchanged, because of them. They're responsible for viewer acceptance, enthusiasm, etc. but they have not touched the game. While the effectiveness of their past promotions are unquestionable, this is a totally different era of gaming. KeSPA and the Korean companies helped create viewership (and in this case, your market) but that does not entitle them to control over it. Blizzard's stipulations are fairly standard and will actually serve to open up your pseudo-market even further by introducing competition TO KeSPA. The same cry was heard when Valve introduced LAN royalty fees on CS 1.6 and Steam, and following that, 1.6's competitive scene actually boomed. I doubt there's causation there, but the point is that it didn't hinder development.
Depends on how you define "the game". The Viewer Acceptance, the enthusiasm, and the level of competition, etc, are all products created by KeSPA.
Does CS 1.6 have a professional scene? That is, is there a large number of people who play the game for a living?
I'm not sure this is any different than a company choosing not to sell their products in a specific store. Not everyone wants to sell their shit in Walmart, even if they could potentially sell more. KeSPA is a shady business partner, and any short term gain Blizzard would get by immediate acceptance of SC2 could be completely offset in the future by the organization's lack of oversight, planning, etc.
The difference is that eSports is not a product of the game, but an externality produced by the game. eSports is not a Blizzard product, it's something that uses Blizzard products.
Completely incorrect understanding of IP. Did Blizzard make money in Korea? Yes. But they should have made a lot more, not simply through broadcasting but the PC Bangs as well.
Read the spoiler tag. My justification for what IP should be is pretty damn sound. Anything past that is greed. "Completely incorrect understanding?" Pray tell, give me a better one and justify it economically.
We know KeSPA is inefficient, but that doesn't mean they're not trying to be.
Evidence.
Hardly evidence at all. They get people to go to malls owned by the companies that fuel the organization. Just because there's no direct transaction taking place between viewers and the organization doesn't mean they're not behaving rationally.
Yeah, okay. I'm going to buy this.
Ok, so apparently you're new to Starcraft.
Okay, evidence.
Everything else in your post is complete speculation. If Blizzard cuts off SC1 and denies KeSPA access to SC2, then the industry just evaporates? What happened to your grand analogy to a market? The 3 million Korean viewers of OGN/MBC going to turn to CnC 18 instead? Or I guess KeSPA will just pick a new game, because the viewers (read: customers) will buy what's presented to them? Oh, how capitalistic you've become!
The industry is fragile, and can evaporate for many reasons. I don't think I ever said "these viewers will turn to another game", anywhere. It seems as if your entire argument is simply missing the point and stuffing random words into my mouth.
If you're going to try and pick off points, please actually read what I wrote because apparently, you have completely missed my point.
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United States22883 Posts
I read it thoroughly. Blizzard is trying to take complete control of ESPORTS (note: the only ESPORT they're going after is the one produced by the game they made) and you think KeSPA should have the rights to use their product because you think Blizzard profited by their work. That's simply not how IP works, and it is about greed. You can make a fairly strong case that Blizzard deserved to make more money in Korea, and its simply not KeSPA's property, whether it benefited from them or not. They're both looking for profits, except Blizzard is making a product while KeSPA is making a service predicated upon that product being available. KeSPA needs to buy that product in order to offer the service.
What companies decide in their best interests doesn't lead to the most efficient outcome? Yay for undefined efficiency. Blizzard is trying to fulfill a balance between value for their customers and their own profit. You disagree with the balance they've chosen, but that doesn't mean you break the entire barrier.
Evidence of KeSPA throwing around their weight? '08 television negotiations with MBC/OGN? GOM Invitational's destruction? The Jaedong free agency saga? The teams throw their weight around all the time in ways that negatively impact the viewers and the players.
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5003 Posts
I read it thoroughly. Blizzard is trying to take complete control of ESPORTS (note: the only ESPORT they're going after is the one produced by the game they made) and you think KeSPA should have the rights to use their product because you think Blizzard profited by their work. That's simply not how IP works, and it is about greed. They're both looking for profits, except Blizzard is making a product while KeSPA is making a service predicated upon that product being available. KeSPA needs to buy that product in order to offer the service.
I believe KeSPA should have the rights based on the model that they have created for themselves. KeSPA and Blizzard has the potentially to be mutually benefiting companies, and it'll lead to the more efficient outcome.
I don't believe Blizzard created the end-product. If Blizzard spent many hours creating Starcraft, then KeSPA and the proplayers have spent many more hours creating eSports based on Starcraft. Blizzard made no investment into the sports of eSports, and what they did not invest in, they should not get.
Yay for undefined efficiency. Blizzard is trying to fulfill a balance between value for their customers and their own profit. You disagree with the balance they've chosen, but that doesn't mean you break the entire barrier.
Yes, and my argument is that, we're undoubtedly stuck by it. As consumers, we should be happy that there are more firms in the markets competing, not less.
My definition of efficiency is simple: The livelihood of eSports. This is clearly a lose-lose scenario.
Evidence of KeSPA throwing around their weight? '08 television negotiations with MBC/OGN? GOM Invitational's destruction? The Jaedong free agency saga? The teams throw their weight around all the time in ways that negatively impact the viewers and the players.
I'm not too sure with the television negotiations with MBC/OGN, so I won't comment.
GOM Invitational's destruction? See Plexa's post in this thread
Jaedong free agency saga? That was Jaedong's parents. Jaedong wanted to play for Oz, it was his parents that stopped him. While KeSPA could have had a better system in place, putting the blame on KeSPA is just silly -- in fact, Oz offered him the same contract.
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United States22883 Posts
What about his post? KeSPA is those companies. The fact that they have a hand in regulating the tournaments that they compete in and that they broadcast should raise alarms to anyone about the foundations of Korean Pro SC atm. KeSPA is just a body for official, unified decisions, it's the chaebols that Blizzard's really dealing with. If they can split them up, I think it'll be better for fans. The NFL has already crossed iffy territory with the NFL Network, and if CBS/Fox/ABC/ESPN contracts didn't exist, of course they'd be hauled to court. Now what if Roger Goodell was also a team owner?
Oz was able to offer Jd the same contract because no other teams would offer him one. Free agency simply does not exist in professional Starcraft. Again, we're talking about collusion among the chaebols to limit a player's freedom. Just because KeSPA didn't make an official decree of it, doesn't mean that the bodies who essentially run it don't work together to make that happen.
Blizzard made no investment into the sports of eSports, and what they did not invest in, they should not get. Unfortunately, we're not having a moral argument. This is a legal one. We see it in technology cases all the time. Someone creates code designed to do X, and another person finds a better use for it. They implement it for that second use, and the original creator is still entitled to royalties, even if it had gone basically unused before then.
I think you're misreading Blizzard's intentions if you think they want to be the sole firm in charge of eSports. I think it's too much of a burden, and likely not profitable in the long run (and inevitably bad for their image, since fans always turn on the league.) They're looking for contractors to do it. If you really want to use the monopoly analogy. then it's a monopoly screwing another monopoly, and in most fans' eyes, Blizzard's past is far less unscrupulous than KeSPA's.
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5003 Posts
What about his post? KeSPA is those companies. The fact that they have a hand in regulating the tournaments that they compete in and that they broadcast should raise alarms to anyone about the foundations of Korean Pro SC atm. KeSPA is just a body for official, unified decisions, it's the chaebols that Blizzard's really dealing with. If they can split them up, I think it'll be better for fans. The NFL has already crossed iffy territory with the NFL Network, and if CBS/Fox/ABC/ESPN contracts didn't exist, of course they'd be hauled to court. Now what if Roger Goodell was also a team owner?
Then say that it's the chaebols. It has nothing to do with KeSPA as a whole, but a subset of KeSPA, and it should be specifically labeled as that. As far as I am concerned, all KeSPA did was not recognize it.
Oz was able to offer Jd the same contract because no other teams would offer him one. Free agency simply does not exist in professional Starcraft. Again, we're talking about collusion among the chaebols to limit a player's freedom. Just because KeSPA didn't make an official decree of it, doesn't mean that the bodies who essentially run it don't work together to make that happen.
If no other teams would offer him one, then sounds like Oz was being fair with him after all. Sounds like more fault would go to Jaedong's parents for creating that entire ordeal for no reason. If you're arguing this entire situation was done through collusion, then perhaps there is reason to believe that each individual team isn't profit maximizing after all -- there's incentive to pick up a top player like Jaedong.
Limiting freedom of players? More like Work Contracts. We also have them in the United States, and some of them are quite ridiculous, I may add. There's nothing wrong with restricting "freedom" of players.
Have issues? Compete. In the end, however I believe that KeSPA is the best shot we have to continue the eSports scene in SC2.
Unfortunately, we're not having a moral argument. This is a legal one. We see it in technology cases all the time. Someone creates code designed to do X, and another person finds a better use for it. They implement it for that second use, and the original creator is still entitled to royalties, even if it had gone basically unused before then.
Unfortunately, we are having an economic argument. I never cared for a legal argument -- anyone could tell you that Blizzard has the "right" legally. Should they have the right? Perhaps. Should they enforce it? No.
I think you're misreading Blizzard's intentions if you think they want to be the sole firm in charge of eSports. I think it's too much of a burden, and likely not profitable in the long run (and inevitably bad for their image, since fans always turn on the league.) They're looking for contractors to do it.
I think they want to be in full control of eSports (of Starcraft 2), and I'm simply against any company having full control of of the scene without sending the necessary signals to do so. Signals like, Blizzard being involved in eSports and trying to make it big, rather than big empty words they're throwing around that just sounds like they want to cash in. They talk big, but they don't have the logistics -- without a solid plan other than "Hire contractors", why should we trust them? What makes you think having contracts in other countries will necessarily mean SC2 will have a solid professional scene? 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?).
There's no reason to believe Blizzard will be successful in doing so. My argument is that Blizzard and KeSPA should be working together simply for the good of eSports, since in my opinion, it's the most efficient outcome with the least risk involved.
They're looking for contractors to do it. If you really want to use the monopoly analogy. then it's a monopoly screwing another monopoly, and in most fans' eyes, Blizzard's past is far less unscrupulous than KeSPA's.
While it is a monopoly screwing another monopoly, it's a monopoly with no proven track record screwing another monopoly who have proven themselves thousands of times over over a technicality.
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".
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lol economics
what we have here is simply a case of the ultimatum game
problem: sc2 in korea
kespa: let's give me 99% of the control and u can have 1% blizzard
blizzard: fuck you nobody gets anything
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On April 26 2010 02:12 Milkis wrote:Show nested quote +Oz was able to offer Jd the same contract because no other teams would offer him one. Free agency simply does not exist in professional Starcraft. Again, we're talking about collusion among the chaebols to limit a player's freedom. Just because KeSPA didn't make an official decree of it, doesn't mean that the bodies who essentially run it don't work together to make that happen. If no other teams would offer him one, then sounds like Oz was being fair with him after all. Sounds like more fault would go to Jaedong's parents for creating that entire ordeal for no reason. If you're arguing this entire situation was done through collusion, then perhaps there is reason to believe that each individual team isn't profit maximizing after all -- there's incentive to pick up a top player like Jaedong. Limiting freedom of players? More like Work Contracts. We also have them in the United States, and some of them are quite ridiculous, I may add. There's nothing wrong with restricting "freedom" of players. Have issues? Compete. In the end, however I believe that KeSPA is the best shot we have to continue the eSports scene in SC2.
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.
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T.O.P.
Hong Kong4685 Posts
On April 26 2010 03:57 Seiuchi wrote:Show nested quote +On April 26 2010 02:12 Milkis wrote:Oz was able to offer Jd the same contract because no other teams would offer him one. Free agency simply does not exist in professional Starcraft. Again, we're talking about collusion among the chaebols to limit a player's freedom. Just because KeSPA didn't make an official decree of it, doesn't mean that the bodies who essentially run it don't work together to make that happen. If no other teams would offer him one, then sounds like Oz was being fair with him after all. Sounds like more fault would go to Jaedong's parents for creating that entire ordeal for no reason. If you're arguing this entire situation was done through collusion, then perhaps there is reason to believe that each individual team isn't profit maximizing after all -- there's incentive to pick up a top player like Jaedong. Limiting freedom of players? More like Work Contracts. We also have them in the United States, and some of them are quite ridiculous, I may add. There's nothing wrong with restricting "freedom" of players. Have issues? Compete. In the end, however I believe that KeSPA is the best shot we have to continue the eSports scene in SC2. 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.
Maybe there isn't that much esports money? The esports stadiums aren't filled even though it's free admission.
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United States22883 Posts
On April 26 2010 02:12 Milkis wrote:Show nested quote +What about his post? KeSPA is those companies. The fact that they have a hand in regulating the tournaments that they compete in and that they broadcast should raise alarms to anyone about the foundations of Korean Pro SC atm. KeSPA is just a body for official, unified decisions, it's the chaebols that Blizzard's really dealing with. If they can split them up, I think it'll be better for fans. The NFL has already crossed iffy territory with the NFL Network, and if CBS/Fox/ABC/ESPN contracts didn't exist, of course they'd be hauled to court. Now what if Roger Goodell was also a team owner? Then say that it's the chaebols. It has nothing to do with KeSPA as a whole, but a subset of KeSPA, and it should be specifically labeled as that. As far as I am concerned, all KeSPA did was not recognize it. They ARE KeSPA as a whole. This is akin to MLB before things like collective bargaining or any other players rights existed, except the team owners also happen to be the biggest companies in the country. The fact that it's called a Players' Association is just a mockery to the entire system.
I'm simply against any company having full control of of the scene without sending the necessary signals to do so. THIS IS EXACTLY WHAT KESPA HAS DONE.
I honestly believe you work for KeSPA at this point. Maybe an internship, who knows.
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United States22883 Posts
On April 26 2010 04:03 T.O.P. wrote:Show nested quote +On April 26 2010 03:57 Seiuchi wrote:On April 26 2010 02:12 Milkis wrote:Oz was able to offer Jd the same contract because no other teams would offer him one. Free agency simply does not exist in professional Starcraft. Again, we're talking about collusion among the chaebols to limit a player's freedom. Just because KeSPA didn't make an official decree of it, doesn't mean that the bodies who essentially run it don't work together to make that happen. If no other teams would offer him one, then sounds like Oz was being fair with him after all. Sounds like more fault would go to Jaedong's parents for creating that entire ordeal for no reason. If you're arguing this entire situation was done through collusion, then perhaps there is reason to believe that each individual team isn't profit maximizing after all -- there's incentive to pick up a top player like Jaedong. Limiting freedom of players? More like Work Contracts. We also have them in the United States, and some of them are quite ridiculous, I may add. There's nothing wrong with restricting "freedom" of players. Have issues? Compete. In the end, however I believe that KeSPA is the best shot we have to continue the eSports scene in SC2. 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. Maybe there isn't that much esports money? The esports stadiums aren't filled even though it's free admission. It's the full spectrum of advertising revenue.
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5003 Posts
They ARE KeSPA as a whole. This is akin to MLB before things like collective bargaining or any other players rights existed, except the team owners also happen to be the biggest companies in the country. The fact that it's called a Players' Association is just a mockery to the entire system. The number of conflicts of interest involved in Korean SC are numerous.
Wrong. 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.
THIS IS EXACTLY WHAT KESPA HAS DONE.
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.
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.
It's the full spectrum of advertising revenue.
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?
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United States22883 Posts
On April 26 2010 04:21 Milkis wrote: What stops them from going on strike?
Korean
e
Sports
Players
Association
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. They are well paid.
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!
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5003 Posts
Korean
e
Sports
Players
Association
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/한국e스포츠협회
Korea e-Sports Association is what they stand for. Stop being ignorant.
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.
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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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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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5003 Posts
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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