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<link href="http://fonts.googleapis.com/css?family=Abel" rel="stylesheet" type="text/css"><style> .epnp-wrap { background: #ffffff url('http://www.teamliquid.net/staff/Meko/articles/epnp/background.png') center center repeat; width: 700px; clear: both; margin: 6px auto; display: block; box-shadow: 0 1px 1px 1px rgba(0, 0, 0, 0.3); } .epnp-wrap img { box-shadow: 0 1px 1px 1px rgba(0, 0, 0, 0.4); } .epnp-header { background: url('http://www.teamliquid.net/staff/Meko/articles/epnp/header.jpg') center top no-repeat; width: 660px; clear: both; padding: 300px 20px 20px; display: block; } .epnp-header, .epnp-header p { font-family: Arial, Helvetica, sans-serif; font-size: 100%; font-weight: normal; color: #2e3031; text-align: left; text-decoration: none; line-height: normal; } .epnp-header p { margin: 0 0 20px 0; padding: 0; font-size: 90%; line-height: 180%; } .epnp-header h1, .epnp-header h2, .epnp-header h3, .epnp-header h4, .epnp-header h5, .epnp-header h6 { margin: 0; padding: 4px 0 10px 0; font-family: Abel, Arial, Helvetica, sans-serif; font-weight: 400; color: #2e3031; text-align: center; text-decoration: none; } .epnp-header h3 { font-size: 180%; } .epnp-header table { width: 700px; clear: both; margin: 0 0 20px -20px; } .epnp-header table tr th, .epnp-header table tr td { width: 160px; height: 40px; border: none; text-align: center; } .epnp-header table tr:nth-child(even), .epnp-header table tr.tableheader { background: url('http://www.teamliquid.net/staff/Meko/articles/epnp/tablebackground.png') center center repeat; } .epnp-header table .yearcol { width: 220px; } </style> <div class="epnp-wrap"> <div class="epnp-header"> <p>The organization of video games into a spectacle for mainstream entertainment is a new phenomenon. As much as our lives and interests may revolve around competitive gaming, its position as an industry, if not tenuous, is still in the process of formation. Recently there has been a homogenization of esports culture and competition. The fighting game, RTS, MOBA, and FPS genres are all jostling within the category of esports and sharing fans, whether they like it or not. This conflation has come to the forefront of our community's consciousness and is advocated by many. Indeed, it is a concept with much merit. But while it promotes a synthesis between competitive games by positing for the greater importance of esports as a whole, it derives value from a demographic rather than a specific long-term fan base. Within this framework, there is potential for both growth and decline. The shift away from Brood War over the past two years has made long-time fans despondent and cast doubt on the longevity of any future game and fan base. With contemporary game developers realizing the potential of esports, competitive games will become more frequently produced, and Brood War's lifespan within the industry may perhaps remain unsurpassed. Conversely, the influx of competing games will bring more exposure to the esports industry and provide new opportunities for professionals and organizations to stabilize and expand.</p> <p>Unlike their foreign counterparts, Korea had little access to games and gaming culture prior to StarCraft. Japan's long and brutal occupation of Korea in the beginning of the 20th century gave cause for the Korean government to ban Japanese media after World War II, a policy which stunted the growth of the domestic gaming industry and culture. The products of Nintendo, Sega and Sony that helped pioneer the global gaming industry were all absent from Korea until the ban was completely lifted in 2004. By then, however, StarCraft and PC gaming had already become popular and entrenched. For Korea, the ban gave the government the ability to manipulate the development of gaming. This opportunity, however, was not realized until the Asian Economic Crisis in the late 1990s.</p> <p></p> <p>After unprecedented, consistent economic growth for three decades, Korea was blindsided by the collapse of its biggest corporations in 1997. Korea was bailed out by the International Monetary Fund for $60 billion, but the damage had already been done. Many were left unemployed and Korea's heavy industry based economy had no choice but to evolve. The government decided to immediately invest $11 billion into building a nationwide broadband infrastructure to modernize and form the foundation for new business ventures. Competition between service providers led to a decrease in pricing and a boom in net cafes called "PC bangs" as many affected by the economic collapse either opened a PC bang or used them for inexpensive entertainment – that is, to play StarCraft. Once a miniscule market, PC bangs exploded. At the end of 1998, there were 3,000 PC bangs in Korea. The number increased by 440% to 15,000 by the end of 1999, and in 2001, only two years after the release of StarCraft and StarCraft: Brood War, there were 23,000 in operation with a total revenue of $1.1 billion. The popularity of StarCraft was a large force in the development of the PC bang industry in Korea, and likewise, PC bangs were the spawning ground for the very first competitive StarCraft tournaments.</p> <p>By the early 2000s, the Korean gaming industry had the greatest potential of Korea's cultural content markets. PC gaming had become the de facto medium for video games, and esports was on the rise. To promote Korea's gaming industry and soft culture, the Ministry of Culture and Tourism founded events like the World Cyber Games and further supported esports by giving professional players tax deductions and hosting esports festivals. A mix of media and sport, StarCraft created lucrative marketing opportunities and was easily picked up and integrated by corporations into established models of mass marketing. OnGameNet, a subsidiary of OnMedia (the largest cable and satellite broadcaster in Korea) enjoyed 3-4 million viewers during its 6-to-10 p.m. timeslot in 2007, while its rival MBC Game drew 1.5 million viewers. One should also keep in mind that esports, compared to high-quality dramas, is much cheaper to produce. That same year, the two broadcasters made a combined revenue of $203 million from advertising. Team sponsors such as KTF saw profits too, as an investment of $4.5 million between 1999 and 2005 earned back $46.8 million worth of marketing. As a result of this success, rival corporations like CJ Group decided to sponsor a team with an initial investment of $2 million and experienced $13.2 million in benefits, in less than a year. Other organizations like ShinHan Bank became tournament sponsors, spending $5 million on the Proleague StarCraft tournament per year.</p> <h2>Number of Professional Gamers</h2> <table cellspacing="0"> <thead> <tr class="tableheader"> <th class="yearcol">Year</th> <th>Registered</th> <th>Canceled</th> <th>Total</th> </tr> </thead> <tbody> <tr> <th scope="row">2001</th> <td>131</td> <td>-</td> <td>131</td> </tr> <tr> <th scope="row">2002</th> <td>63</td> <td>-</td> <td>194</td> </tr> <tr> <th scope="row">2003</th> <td>36</td> <td>58</td> <td>172</td> </tr> <tr> <th scope="row">2004</th> <td>73</td> <td>26</td> <td>219</td> </tr> <tr> <th scope="row">Early 2005</th> <td>32</td> <td>11</td> <td>240</td> </tr> <tr> <th scope="row">Late 2005</th> <td>21</td> <td>24</td> <td>237</td> </tr> <tr> <th scope="row">Early 2006</th> <td>61</td> <td>18</td> <td>280</td> </tr> <tr> <th scope="row">Late 2006</th> <td>53</td> <td>22</td> <td>311</td> </tr> <tr> <th scope="row">Early 2007</th> <td>70</td> <td>10</td> <td>371</td> </tr> </tbody> </table> <p>Players experienced financial gains as well, albeit on a different scale. In 2005, the industry supported hundreds of licensed professionals. 70% of them made $10,000 per year and 15% made $10,000 to $30,000 - this, of course, in addition to the costs of living provided by the team, which combined could cost a sponsor over $200,000 per month, as it did for CJ in 2007. A small handful of star players, functioning as a sponsor's primary medium for marketing, could earn as much as $200,000 per year.</p> <p>This has been the direction and constitution of esports up until 2011-2012. Today, we face a paradigm shift as more competitive games enter the market. When once there were 12 professional StarCraft: Brood War teams, there are now eight (one without a sponsor). One broadcasting station has closed its doors and the tournaments that esports was founded on are struggling to find financial backing. We have seen over the last two years a transition away from Brood War. The next Proleague will incorporate StarCraft 2 and use the time-honoured classic as a gateway for Korean fans to become exposed to a new generation of gaming. If so, Brood War's dominance in esports has come to an end. But twelve years is an extremely short lifespan, and within this period it had no serious competition. How long will StarCraft 2 last before sponsors find an easier game to market through? Five years? Ten? What about League of Legends? While the demographic of esports fans is growing, it is still limited and niche within the whole of a population, and thereby also limited in its marketing potential. Ideally, sponsors would support a single game into the mainstream where it would reach a wider audience and find new methods to generate money. The sponsors that target the esports demographic, however, do not necessarily target another, or already do so successfully through other mediums. There is a finite amount of money sponsors are willing to spend on esports exposure – they cannot support every competitive game, but are rather forced to pick and choose. Thus, to quote Peter Ustinov, "the parents are the bones on which children sharpen their teeth."</p> <p>To date, competitive gaming as a spectator sport has only existed and been made possible by sponsors who find value in marketing to the teenager and young-adult demographic. For many (but certainly not all) of esport's large sponsors, one could argue that the value of esports as a marketing tool diminishes as the age of the fan base increases. Rather than invest in the long-term popularity of a single game, sponsors and tournaments may instead increasingly invest in the abstract concept of "esports" and rely on a cyclical influx of new fans, games, and professional players to replace the old and waning. Competitive gaming would grow and expand, becoming more viable and attractive to sponsors, but also fluid and uncertain for fans, professionals, and specialized tournament organizations. With new esports games and fans always on the horizon, how will the industry adapt? Will organizations and teams rise and fall in tandem with the popularity of a given game, or will compromises be made to homogenize and thereby sustain? How to deal with the transitory nature of video games in popular culture is perhaps the biggest issue the esports community needs to address. The emergence of the foreign market and new competitive games in popular culture has already had a huge effect on the evolution of esports. The decisions made by leading parties in these formative years will become established models and precedents that their esports descendents will prescribe to.</p> <p></p> <p>What shape will esports take in the future? How will, or can, it settle as a stable industry? New graphics, gaming genres and platforms will remain on the frontier of popular culture and thereby, most likely, appeal to new esports fans and keep the lifespan of a single competitive game transient and transitory. As a tool for game developers and technology based industries, the marketing potential of esports should only increase as competitive gaming grows to further encompass the burgeoning consumer demographic. A competitive game may last for ten or even twenty years in the esports industry, but is that really enough? What happens to the fans and disenfranchised professionals? Recently we have heard top StarCraft 2 players Polt and Stephano express their doubts about a sustainable future in professional gaming. Perhaps esports will simply become a stopping point for young adults to make some money and enjoy themselves before moving on to "real" careers. And while many of KeSPA's current policies are exploitative and directly harm the careers of players (as seen in Jaedong's free agency debacle), if individual games lose value within esports as a whole, players may only have less leverage, and sponsors, less reason to entreat with them. Even within the current StarCraft 2 scene, very few players enjoy a salary. A dismal future, indeed. But a more likely narrative is one of growth and prosperity.</p> <p>Based on our contemporary situation, increasing stability for esports professionals and organizations is by far the most likely outcome of new competitive games entering esports. Community figures like djWheat, dApollo, JP and Slasher have transitioned successfully with the trends of the industry and will certainly continue to do so in the future as they develop a brand and following. For many of the top professional RTS players, adapting to StarCraft 2 from Brood War or Warcraft 3 was simply a natural and easy continuation of their esports career, and similarly, MLG and IPL have only grown as a result of new games like StarCraft 2 and League of Legends entering the limelight. As esports expands globally, an ever larger pool of sponsors will use it for marketing, which will increase the competition among them and provide better financing for professionals.</p> <p>In time, growth and sponsor interest will plateau, but for now, esports is still very young and full of potential. Players and organizations could evolve to function around genres (RTS, MOBA, FG) rather than specific games and flourish through a process of continuous transition, making teams like `Liquid established in multiple genres. In the case of a game, or even an entire genre falling out of favor, esports organizations and professionals would be able to survive and adapt, rather than live or die by the popularity of niche following. In this regard, organizations like Evil Geniuses and players like Grubby are already ahead of the curve in their ability to adapt and take advantage of new, popular games. With a large network of games and fans to support them, organizations and professionals will be more robust and better able to survive the tremors of the industry. It is also important to keep in mind that sponsors are not the be-all and end-all of esports financing. The accessibility and agency of all aspects of esports will increase exponentially with improving technology and create many opportunities for direct fan support and involvement. MLG successfully hosted a PPV event, and from that model an organization can derive revenue directly from the fans of a specific game. Furthermore, as internet streaming and esports-friendly games sophisticate, physical space and time will increasingly become less inhibiting factors. In this sense, a single game could be sustained as an esport solely by a robust and willing fan base.</p> <p>One of the effects of the popularization of competitive gaming is the inclusion of new fans and games. Developers like Valve have already shown their support of esports by creating spectator-friendly interfaces, and large esports organizations like MLG and Team Liquid have already incorporated new games and grown as a result. While games in the future may not stay center-stage in esports for as long as Brood War has, and professionals may be forced to shift gears and transition more frequently, the inclusion of new games within the esports industry will ultimately provide stability and opportunities for growth.
Sources: Korea Content Creative Agency, Korea Gaming Industry Agency, and Korea's Online Gaming Empire.
Thanks to: Antoine, Waxangel, Nazgul, SirJolt, Riptide and Heyoka for proofreading.
Graphics by: Meko.</div> </div>
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