EPTWith all the recent discussion resulting from the Valencia Congress, player compensation, and industry health overall, I've given our current state of affairs more thought and discussion, and being from the Technology sector I, like my co-owners, tend to view things through the lens of a technology start-up company. One benefit of looking at things in this regard, after having myself only learned of the prior eSports false-starts second-hand, is that we look at things in comparison to the tech bubble, the rise of Silicon Valley, diffusion theory, and behavioral change as both a driver and an indicator for market adoption of new products and services.
With that parallel in mind, I want to draw an analogy between the lifecycle of birth, growth, adoption, and subsequent market development in technology as a backdrop to the same lifecycle phases and indicators for eSports, with my goal being to deliver a message of unity in purpose and method for advancing this thing we love through a concept I’m calling “eSports Open Source”.
“The Internet is what happens when all of the computers in the world speak the same language” is what I used to tell folks when speaking at industry events almost a decade ago. But alas, it isn’t quite that simple. The Internet and software that powers it share their origins in the education and government sector, both from a university/state agency, and military-industrial perspective, and would have never been possible without the combined collaboration and self-governance of many institutions, agencies, and corporations, all working together. All the great things we enjoy today, especially those which we would all agree on as having produced lasting positive advancement through technology, largely hail from the halls and minds of our great universities, standards bodies like the W3C and IEEE, or the extrapolation of their prior works, resulting in VC funded speculative ventures like Google, Facebook, and many more.
Taking a step back, underpinning many of these projects there is and continues to be a broad-reaching philosophical movement of ideas and individuals, colloquially known as the “Open Source movement”. Rather than describe it myself, I’m going to quote a few lines from the Wikipedia entry. “requires that no one can discriminate against a group in not…or hinder others from editing their already edited work. This approach…allows anyone to obtain and modify… all individuals participating…are disclosed and the transformation…documented over time. This method makes it difficult to establish …but is in keeping with the open source movement philosophy. These goals promote...”high quality”…as well as “working cooperatively with other similarly minded people” to improve open source technologies.” Also worth noting is the fact that many popular for-profit products we use and enjoy every day either include or are based on the fundamental concepts and functionality of open source software components, with even Microsoft’s Internet Explorer browser having its roots in NCSA Mosaic, just as an example.
Ok, so before I lose you, let me tie this all back to what we love, eSports. I view it all as the evolution of an industry and its associated market, over time. As an emerging market begins to take hold and shape in the world, there are times at which the products and services that serve the market are ahead or behind of their demand. So markets don’t just stroll on down the road, hand in hand, skipping all the way, with supply and demand in perfect harmony. Furthermore as each side tugs on the other, the entire equilibrium of the market ecosystem can be whipsawed back and forth, which is what we are seeing now within our little world, as it becomes clear that we are going to grow up some day and need to get our collective affairs in order post haste.
So, the growth we saw in 2011 was demand tugging on the supply side, and while both encouraging and exciting, the growth which resulted from that sharp increase in demand required a great deal of additional investment, along with creating a whole slew of industry problems which did not exist before, things like how we as an emerging industry deal with event scheduling conflicts, player contracts and trades, sponsors and representation, revenue sharing for both advertising (passive) and merchandising/licensing (active) revenue streams, etc. In 2011 all we needed to do was ride the wave, follow the demand, and not screw up, and I think we did well for ourselves, by in large.
Now it’s heading into late 2012, and we’ve seen a year where heavy investment continued to power massive expansions in supply, while demand growth bisected outward across multiple emerging titles, each powered by unique, and often new, investment methods, funding sources, and even groups of people. The result has been continued growth, but at a far slower pace, and in a far more distributed fashion, than was seen alone in 2011 through democratized StarCraft alone. This has created a market environment where we are seeing a great deal of market entry, exit, and an overall supply surplus, from all angles (content, events, players, etc) which, as is often the case in such environments, has been accompanied by what appears to be a funding slowdown of sorts, where all the investments made last year and early this year resulted in positions for which the holders are waiting for recovery, but wait, we aren’t there yet, the growth has slowed again, or wait, maybe not, maybe it’s just fragmented outward, into LoL, DOTA2, CS:GO, and other titles. Like a 16 year old with a new car, we are driving that puppy all over town, pushing its limits, trying to see what she can do.
This is called “the chasm” in the tech world, made popular by author Geoffrey A. Moore’s popular book “Crossing The Chasm”. Once again, I’ll reference Wikipedia to give you some goodness. “In Crossing the Chasm, Moore begins with the diffusion of innovations theory from Everett Rogers, and argues there is a chasm between the early adopters of the product (the technology enthusiasts and visionaries) and the early majority (the pragmatists). Moore believes visionaries and pragmatists have very different expectations, and he attempts to explore those differences and suggest techniques to successfully cross the "chasm," including choosing a target market, understanding the whole product concept, positioning the product, building a marketing strategy, choosing the most appropriate distribution channel and pricing.”. WOW, that sounds like what we are doing right now, doesn’t it? (ha). Yes, YES, it does indeed, and we are currently doing it in the most cost inefficient and ineffective ways possible, if at all.
The Wikipedia synopsis continues “Crossing the Chasm is closely related to the technology adoption lifecycle where five main segments are recognized; innovators, early adopters, early majority, late majority and laggards. According to Moore, the marketer should focus on one group of customers at a time, using each group as a base for marketing to the next group. The most difficult step is making the transition between visionaries (early adopters) and pragmatists (early majority). This is the chasm that he refers to. If a successful firm can create a bandwagon effect in which enough momentum builds, then the product becomes a de facto standard. However, Moore's theories are only applicable for disruptive or discontinuous innovations. Adoption of continuous innovations (that do not force a significant change of behavior by the customer) are still best described by the original technology adoption lifecycle. Confusion between continuous and discontinuous innovation is a leading cause of failure for high tech products.”
To simplify the implications of these principals:
- eSports is a disruptive/discontinuous innovation, meaning we aren’t going to have to do all this hard work we are doing right now to sort out things forever, but it also means that we are forcing significant change of behavior by our target customer, the fan, who while they may or may not have been locking themselves to their computers before, certainly were not doing what we are asking them to now do with their time and money, that’s disruptive (but yes it’s lots of fun, and you should do it too) – And remember, our target demographic is 15-34 y/o mostly male marketing adverse, ad-block toting, change-the-channel-omg-its-a-commercial consumers aren’t easy to sell at the best of times, so in order for us to grant anyone access to those people, we have to gain that access ourselves first.
- Everyone reading this blog right now, including any of the estimated 100k StarCraft fans out there, the massive numbers of LoL viewers, the older generation of CS folks, or even the console contingent, all of you, like myself, are visionaries, aka “Early Adopters”, meaning you got here first, and thought, wow, this is pretty cool stuff, I think other people would like this, maybe I will share this with others so we can enjoy it together – Cheers, and congatz on showing up early
- Everyone else out there, those people who you and I and all of us know, the many to our few, those people who don’t know or care or understand what eSports is, why it’s exciting, or what it’s even like, those people are the pragmatists, aka “Early Majority”. These are the people who you might share your passion with, and they seem interested or ask questions, or maybe you even show them a video or two, and you can clearly see they are intrigued, but that’s it, they never pursue it further without being prompted by your further. They may or may not be gamers, or actively participate in online gaming, that matters less than the fact that while they may even see or be aware of what is happening here, they are NOT here, like we are, got it? Right.
- We are in the chasm, the void, the long haul, the drought, where water is scarce, people are thirsty, tempers flare, and there are cries for help occurring regularly. This is the long haul in a marathon where your legs burn like hell until you find a way to tune it out mentally and just focus on putting one foot in front of another until you make it. The market size you see today, largely comprised of early adopters, will not increase rapidly or in a linier fashion, in fact it will not increase much at all until we can get buy in from the early majority, the pragmatists, many of whom know knowing about it. This isn’t all bad though, as dedication to details and time to refine is both necessary and beneficial to helping us get it right in multiple areas.
- In order to cross the chasm, we will need to turn all of you, the early adopters, into our market evangelists, our eSports advocates, this is and has been happening, but I’m not sure many fans realize that as an early adopter, this is just as much their job as it is ours on the industry side. We also will need to define and understand our “whole product”, as in what are we delivering of value to the customer/fan and what/how should we be compensated for that value and by whom. We will need to do this fully within our test segment of diehard early adopters first, before we can hope to achieve market penetration with the next segment of pragmatists.
- Finally, we will need to all pull our very best ideas and methods together “openly” through sharing and collaboration, both within industry and with the community, to be sure our product offering is ready and able to be delivered at scale. We will need to learn to self-govern to the benefit of the entire ecosystem, to assure the health and vitality of all entities operating at all levels, who are doing things “right” within the context of our self-defined governance. Only when we do this most essential work, will we be ready to, as the book calls it, “bandwagon” our message of eSports, our collectively combined offering, and all the passion and excitement behind it, to take our emerging, evolving, thing we love, to the next level, to the masses, the early majority, the pragmatists.
Which at last, brings us full circle to my concept of “eSports Open Source”, the fundamental motivating principal from which I became involved with eSports and founded Quantic, both in its original philanthropic form and as the business it continues to evolve into. But the point I’m driving home here is far wider reaching than any one company or individual influencer in the space, both in significance and effect.
With recent discussions, both in industry and among the community, and in light of the generated interest in these topics, I’m quite hopeful that we can in reality pull together to pull this whole thing off after all. I know that is the hope in the hearts and minds of many, both industry folk and fans alike. But rest assured, this will not be easy, free, or fast. It’s going to take a lot of work, from a lot of people with big egos and seemingly competing interests, over an extended period, the chasm, where it is arid, dry, and might even seem hopeless at times. Some may not make it, for one reason or another, but it is my sincere hope that all those who have invested so much of themselves in this space, who are committed to doing this right, seeing it fly, even if they go down in the process, it’s my hope that they and their entities do make it and live to enjoy soaring in open skies once the rain comes.
As it stands right now, many of us, even myself who has only been here for a few years, are very cautionary with folks when making recommendations or giving advice on entering the space. As I often say to folks, if in spite of my warnings you decide to do this anyway, then maybe, just maybe it’s for you.
It’s my hope that in a few years I’ll be able to both promote and encourage entry into this market, because let’s face it, only once we are at that point, can or will we ever see that wide-adoption-oriented growth we are all dreaming of.I hope to find the time to write more about my specific thoughts on how we do this together, eSports Open Source, and am eager to engage with others, both in and out of the space, to begin the good work needed to see good things happen, for everyone. Please be encouraged to reach out to me by email at mark@quanticgaming.com if you yourself have any ideas or suggestions, or would like to assist with the development or funding of new models for the scene and its future.
Oh, and Thank You, for reading my post, and considering what I have shared, perhaps even sharing with others you feel it may interest.
Cheers,
Mark Ferraz
Founder & CEO
Quantic Gaming, LLC
mark@quanticgaming.com
Please follow me on Twitter @QuanticCinergy
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