On August 29 2012 01:19 TotalBiscuit wrote:Hi folks,
Over the last couple of days I've had the chance to speak to several Korean players a great deal about the situation in Korea and was surprised to hear a couple of things.
1) The sponsorship situation in Korea is worse than I thought and the only team that is really well sponsored right now is LG-IM (none of them mentioned FXO though I assume they are doing well too atm)
2) The online tournament scene in Korea is essentially non-existent.
So why are these two facts relevant and is there a link?
Startale recently announced that it would shut down it's League of Legends team due to limited funds and focus entirely on it's SC2 division. Good news for SC2 fans of course and no doubt much cheering and jeering occurred, however it reveals a deep-seated problem. If a team as successful as Startale, who has within it's ranks so much success, cannot maintain it's League of Legends team due to lack of funds, then what on earth is going on over there in terms of sponsorship?
From what the Korean players I have spoken to tell me, things are rather grim right now. LG-IM is stable thanks in no small part to the huge LG sponsorship, by far the biggest in the Korean scene so far. Needless to say it helps that they have arguably the best stable in the world right now. Other teams are merely getting by. You've heard the stories about unsalaried players, well there are plenty of them. Even cutting corners like that, Korean teams are struggling to send anyone but an absolute safe bet over to tournaments like MLG and IPL, even more so to European events where the competition is tougher and the travel more expensive. If you don't nab one of those qualification spots with costs included, then you're going to have a bad time.
Why is the sponsorship situation so difficult? Well unlike SC1, teams are in an awkward spot when it comes to sponsorship ROI. ROI = Return on Investment, you want to at least break even on the value you get out based on the value you put in. If you have a product to sell, ROI could be as simple as selling X more units because of your sponsorship. More often than not though it's much trickier than that, it's hard to directly prove ROI. If I see LG's logo on Nestea's shirt and then go and buy an LG television, how does LG know the cause? Some companies gather data via referral links though that is clearly not relevant in most cases. Others allow you to tell them as you "check out" where you found out about them, but that only really applies if you're buying direct. If I buy an LG TV from Amazon, how on earth can I possibly let LG know that it's because of Nestea? Short answer is, I cannot. As a result, sponsorship ROI often has to be a lot higher than you might think, because you can't accurately track it.
None of that explains the Korean situation though. The problem is multi-faceted. Sponsors want ROI. They want to raise brand awareness and sell units in the demographic of SC2 viewers. However, S.Korea is not actually that big a country with an estimated population of 50 million. The UK is currently sitting closer to 70 million. To make matters worse, SC2 is not actually that popular in Korea right now. It isn't pulling in the numbers SC1 did. As a result, trying to raise brand awareness in the Korean market using SC2 team sponsorship is actually very difficult, the ROI is low. But fear not, for there is one country where advertising is king and ROI is huge! That's right, the United States of America. One of the reasons that Koreans want to come to MLG besides the large prize-pool and good shot at winning it, is the sponsorship exposure. When teams can afford it, they'll send players to MLG because it stands as one of the highest viewed SC2 events alongside IPL and Dreamhack. MLG is also very reliable when it comes to showing sponsorship logos in stage matches with high definition cameras, solid camera work and plenty of booth shots, not to mention the constant presence of player cams during matches. If you get on stage at MLG, your sponsors are happy.
However, constantly flying out to foreign events is not only expensive but can also negatively affect the players. Jetlag, sickness from airtravel, fatigue and of course a lack of practice time all take their toll. Smaller teams cannot afford to send many if any players to large foreign events unless they are able to qualify and get their ticket paid for by the event itself. What a nasty catch-22. Can't afford to send players to foreign events because of lack of sponsorship money, lack of sponsorship money because players aren't being seen at events.
Alright, now why did I mention online tournaments? I asked the Koreans how many there were and the answer? 1. 1 regular event. There have been a handful of attempts but aside from the Korean weekly, that's really about it. I asked if Korean players disliked online events and they said no, actually they enjoy them and want more. It's a chance to win some money, gain some exposure, but not have to travel to the other side of the planet to do it. It's low-risk high-reward for them and also the reason some try to compete in foreign online tournaments though as the skill level of SC2 continues to rise, cross-server player becomes less and less viable and cross-server results less and less important. Right now online tournaments also suffer from another problem, lack of sponsorship ROI. Sure, if you win a big online event, your team will get recognition, but it's not even close to being as effective as that logo on a shirt in 1080p on a big stage with cheering fans. Some teams, realizing this, have taken matters into their own hands with so-called "title sponsorship". This involves placing the sponsor in the user ID of the player. EG is a recent example of this with Raidcall, as are Fnatic. Mousesports also do it with Card Coaches. It's smart but not necessarily effective. Neither of these brands are well known for their acronym. You put LG in IM's name and you know what it is, you put RC or CC and explanation is required. This ambiguity can work in the favor of a sponsor since curious viewers will go and look for information on what these sponsors do, but it also tosses an element of unreliability into the mix.
Is it possible to create an online tournament that provides sponsorship ROI and could that help the situation in Korea?
Online tournaments are primarily watched by Americans, at least according to the analytics from my Twitch and Youtube channels. This is a good thing, sponsors like the American demographic and it opens up a lot of sponsorship options due to the sheer number of products available in such a large and wealthy country. Sponsoring an online tournament makes good business sense, chances are your ROI is gonna be great assuming the tournament is at least marginally successful in terms of views. But what of the players? I've mentioned this before in a previous blog post but no SC2 tournament has tried to do it. My opinion was vindicated by an unlikely party.
http://esportsbusiness.com/valve-show-developers-how-to-support-esports-with-dota-2/Valve understands the problem and implemented an in-game solution in the form of in-game branding. Super smart and considering Valve's history of ineptitude when it comes to eSports, quite the surprise. SC2 has no such system and there's no sign of it coming in either. Sad thing is Blizzard could pull it off, they already have a logo-decal system in the game. If you see MMA play on his European account he clearly has a Blizzcon logo and it looks good. Blizzard could implement a system which would allow authorized teams to display sponsorship logos on command structures for instance. However this probably will not happen so who is responsible for the promotion of sponsors?
Teams can only do so much. How on earth do you promote your sponsors during an online event without having a title sponsor? There is no stage, no cameras, no live audience, your jersey is irrelevant and you might as well be wearing it on your head. Quite frankly, I think this responsibility needs to start falling to tournament organizers. If you broadcast a tournament you have the ability to display sponsorship information in your overlay. The scoreboard would be an ideal place to do so, as would winner splash-screens. I particularly like the idea of displaying the sponsors if the player wins, it just makes sense in a competitive eSport. Win and make your sponsors happy!
Someone needs to step forward and do this so it might as well be me.
All future SHOUTcraft tournaments and showmatches will feature the teams sponsors somewhere in the tournament overlay itself.
This all comes back around to the original topic, the sponsorship situation in Korea. It occurs to me that SCI has been focused in the wrong place. While foreigners frequently struggle to get results against Korean players, they are more often than not well-sponsored and at least get paid a nominal amount. Many Korean players don't get paid a thing and their teams struggle to find sponsorship. What Korean team has the number of sponsors that EG is sporting right now? Short answer, none of them do. As a result until the forseeable future I will be looking to focus SCI events and funding on Korea. I wish to create regular online events for Korean players to participate in and give their sponsors reliable exposure and ROI in Europe and America. I want to give Korean teams the opportunity not just to win money but actually build stability via the acquisition of new sponsors. I am hoping that SCI events in Korea will be a small step towards allowing that to happen. I will also look to find corporate sponsorship to fund additional Korean online events.
In the meantime, I would urge online tournaments to start supporting team sponsors rather than just their own. You might say "that's not our responsibility" but you have to understand that eSports is a fragile ecosystem and we depend on each other to ensure it remains alive. It is in your best interests to ensure that more money enters the scene, it benefits you as a tournament organizer, it benefits the viewers and the players. The problem is not going to fix itself, proactive effort is required by those with the power to do so.
Thanks for reading.
EPT
