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Hi, I'm not a big name here, haven't been here long. But I had an epiphany of sorts. I've read with quite a lot of interest about the community reaction to the MLG PPV change. And listening to the general reaction, it seems like a split in the community. And splits are never good for any community.
But if you listen to MLG's reasoning for the change they make it clear that they are not the bad guys, they are just having trouble getting enough money and have to at least try something to get enough money to stay around at the level that they are. As Sundance said in his interview last year, nobody is making money in this business.
So that begs the question. Why?
The problem I see is that there's too much in-fighting between the streaming companies. Livestream, Ustream, Twitch, own3d, youTube entering...
How many streaming services do you need? I see this having a negative impact because when business owners look to advertise through online streaming, they have no idea where to go. Google made the internet work with AdWords, they (or at least a company who "gets e-sports") need to do the same with streaming video.
If they don't, if they cant, then what other options will MLG have?
One possibility I can think of is trying to get more exposure to the team, event and personal sponsors. I've always wondered why MLG hasn't invested more in actually getting fans to interact with the sponsors, not in person, but through the game itself. At the very least have sponsor names in player introductions or have some kind of interface to be able to click on links to sponsors depending on who's playing etc... In turn they could raise player fees and extract more money from the teams.
After all if the teams can show to sponsors that direct team sponsorship will benefit them greatly, like actual regular visits to online stores, twitter and facebook pages etc depending on the performance of the player... Then I'm certain they will be able to have an incredible increase of funds and pass some of that down to the tournaments. It would also provide star player on teams a greater role and probably monetary incentive as well to reach those top spots.
But the problem there is it's kind of a chicken/egg scenario, who will front the money first? Will the sponsors say "have more money, and show me results?" or will a Tournament go all out on developing their own interactive e-sports viewer/player that is entirely designed around getting people to click on sponsor links in the hopes of being able to attract more direct sponsors. Due to the inherent risk from either side I can't see it happening except from a revolutionary new start-up (I would love to see TL get involved in this btw.)
Another option is for Blizzard to answer the gauntlet thrown down by Valve, but that's a blog for another day.
Either way, this issue is something I haven't seen talked about enough. It just honestly seems like we are still not ready for truly mass-popular e-sports and if we are it wont come from SC2 at the moment. We are close, and a damn sight closer than the early BW days, and definitely the CPL days.
But we are still not quite there, and wont be until the streaming/advertising platform gets nailed down. In the not to distant future we will have "interactive" television and if the current organisations haven't figured out a way to get revenue that does not rely on direct payment by then, I fear they never will.
 
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eSports (heavily relying on SCBW) is already "there" in Korea. It's been at that stage since like 2002-2005 and it's been doing well until the recent series of troubles (match-fixing scandal, Blizzard IP legal battle). Even so, it does well enough to continue and adopt new games (LoL is the new big thing). Financially, KeSPA handles almost everything. It's not a separate governing entity - KeSPA consists largely of sponsor representatives (like KT, SK, etc.) that act in the best interests of the whole scene, not individual needs. Of course that's what it says on paper, and I'm sure each executive tries to pull strings to favour his company in little ways. Still, the fact is that there is a central governing body and it is critical to the longevity of the scene. Despite the flaws and stumbles, KeSPA held eSports together for a decade and it looks like they'll continue to do that in the future. Attending live events was free from the beginning and still remains free. VODs are available for free (might not be high quality, but whatever). You do need cable TV to watch it live on TV.
Elsewhere in the world - i.e. outside Korea - we don't have that. GOM is trying to give off that sort of image with GSL and stuff, but GOM is a company with its own interests. Sponsors for teams and tournaments act in their best interest, but actually have limited power and organization when it comes to the scene as a whole. When organizers and teams turn to online stream-based revenue to sustain themselves, there are far too many problems and conflicts for everyone to grow together on the same grounds.
Maybe I went off-topic a bit with this centralized organization stuff, but I truly believe that it is the missing piece - and also the key piece - that is needed in the global eSports scene.
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I still argue oversaturation. Whether MLG makes it or not, companies are going to fall and disappear. A lot of people in the community don't want to see anyone go. Regardless of what model businesses use, there's just too much of everything constantly.
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Why does everyone accept whatever Sundance (or any other 'big' community figure says, really) as the ultimate truth all the time? :p Just because Sundance said something doesn't mean it's true; if companies didn't make money off SC2 and e-sports in general, you wouldn't be seeing all the tournaments and teams we have out there. It's not like all this is happening just because 'we love e-sports', lol.
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I've been thinking about this a lot lately. Esports is pretty new compared to established sports, so we may be seeing something similar to how sports were originally before the professional leagues started.
For example, there are hundreds of baseball teams in the united states from MLB, to all of the minor league teams (each mlb team has between 2-5 minor league teams). Then there is college ball and high school, yet MLB doesn't have a problem generating revenue despite the oversaturation of baseball. The reason is because over time, the MLB established itself as the best of the best competition. Most other teams (like high school and college) due it purely because there is a desire by students to engage in those opportunities. I think the same thing will slowly happen in esports.
In the next 10-15 years, an organization will establish itself as the best organization and buy out all the competition or the competition will just die. This is already happening to a certain extent. League come and go, and those that are profitable remain. Right now the teams are very separate and distant with no rules binding them in place. Once an organization, such as MLG, can find a way to be profitable, while using funds to get exclusivity with the teams, this will set in place the establishment of a permanent league.
As pros begin to make more money, streaming will become less popular among pros and the only people left to stream will be those not in a league. It also means that pros and teams will make contracts with leagues which prohibit them from participating in other leagues. This means that over time, if you want to see the best players, you gotta purchase content from the providers who provide the best players. For MLG, this means buying out exclusive rights to non-korean teams and limiting them to participating in certain leagues. This only will happen if MLG has enough resources to do it and if fans are willing to pay to watch sc2 in this method. It certainly worked in korea, but will it work in a wider non-regional market is a bigger question.
It will be interesting to see how it works over time.
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On February 24 2012 07:18 Sethronu wrote:
Why does everyone accept whatever Sundance (or any other 'big' community figure says, really) as the ultimate truth all the time? :p Just because Sundance said something doesn't mean it's true; if companies didn't make money off SC2 and e-sports in general, you wouldn't be seeing all the tournaments and teams we have out there. It's not like all this is happening just because 'we love e-sports', lol.
Actually it kind of is. It is possible for companies to run a deficit for a time, effectively spending money they "don't have" to make something happen in hopes that they will make a return. Now, if you spend a deficit for a certain amount of time and start making money, it is possible to completely offset the losses and still make money, but it is just as possible to go bankrupt by effectively spending so much money that you can't afford to run the company. From what I can tell, Sundace has said that they have been running a deficit for a while, and they need to find a better way to fund themselves because their current funding situation does not allow them to throw this much money around.
The part that gets me about this is that earlier, Sundance said he was perfectly willing and capable of securing more money to throw at eSports in 2012 for bigger payouts and better events, and yet here he is saying that they need to make more money. Sounds like he was at the edge of his spending limit before and decided to push into the dangerous waters of "I hope this works".
On February 24 2012 06:10 Angel_ wrote:
I still argue oversaturation. Whether MLG makes it or not, companies are going to fall and disappear. A lot of people in the community don't want to see anyone go. Regardless of what model businesses use, there's just too much of everything constantly.
I can agree with that. to some degree. What we have an over saturation of is large scale events. There will always be a place for smaller scale events, show matches, and the like, but we have so many large scale events that they are effectively downplaying their own importance. I mean, the GSL just looks like another tournament compared to MLG, or the NASL, or the IPL. They're all pretty much the same size and the only thing keeping the GSL looking like it's more important is how the viewers perceive it. Whic brings me to an important aspect that hasn't been mentioned here: the roles that each tournament plays. The GSL is considered to be the king tournament, the most important out of them all, and for good reason, I'd say. But how does that affect the scene? It means the GSL does not compete with the MLG, NASL or IPLs. It is unequivocally considered the best tournament, period. It has it's role. I believe MLG, IPL, and NASL need to find a niche role in the market to truly survive a longterm eSports future. If they can do that, they will stop competing with eachother and will have a niche group of supporters willing to support them over the years.
Now, I'm not saying that they need to be any smaller than they are for this to work, that's not what I meant at all. I just meant that MLG needs to appeal to a slightly different crowd than say Dreamhack, or IEM, or the NASL. If they can differentiate themselves enough that their fans feel like they are MLG fans, or IPL fans, or IEM fans, and watch other stuff when they can't watch their favourite, then I feel like the scene will be much more self-supporting than it is at the moment. In short, I believe that to combat over-saturation the tournaments need to create a sense of community in their fans, in order to instill a sort of loyalty to the brand that will allow them to survive.
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EPT
