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On July 30 2011 21:20 Azz wrote:Show nested quote +On July 30 2011 21:07 DarkPlasmaBall wrote:
Props to Sundance here. I'm a fan of the honesty and straightforwardness. I like to know what needs to be done to take things a step further with MLG (and e-sports in general) too. I'm sold.
I'm generally a fan of iNcontroL as well, but I disagree with him on this one. Geoff, what did you expect? It's business; at least it's out in the open. This stuff can't be cheap. As someone who helped run NASL, surely you know that firsthand. Actually its VERY COST EFFICIENT to run an event like MLG with the current prize pool & revenue raising. Incontrol is a smart bloke. You say 'at least its out in the open' .. if only you had an idea of their business model. You can argue that they 'vaguely underestimated the potential' for this year. If they were truly thinking of the development of esports... they would have made a move to COMPENSATE and CORRECT their prize distributions due to 'updated profit projection rates'. At the end of the day, MLG are a business, once again the point is to make profit and with their current prize pool structure they are basically tossing a few bones to hundreds of hungry gamers. Yes, they are developing E-sports, but not in the interest of the players monetary gains.
Prove it. Break down the expenditures and revenues, since you seem to think you know so much about MLG's financials. Demonstrate how cost efficient it is to run an event like MLG through facts, not mere claims...which is all you're sharing at the moment. Show your math.
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On July 30 2011 21:25 Zomodok wrote:
Hmm MLG Dallas is a complete failure, stream dies constantly and latency at the venue is downright horrible to the point where the game is near unplayable.
Sundance comes out and goes "We messed up and it's a disgrace, we are going to fix it" and proceeds to do Columbus which while it had it's hiccups, was an overall great event. Even allowing the HD stream to be previewed to everybody. Sundance then continues to work with the community and asks questions about what needs to be improved and how and has an overall positive attitude.
NASL becomes a running joke with "the audio" guy and the horrible commentating and just the amateur presentation and Incontrol cries like a baby going "If you don't support us you want Esports to fail" and continues to cry about growing pains and "learning" experiences, but never improves on any of the communities input or improves at all. The only good thing about the NASL was the Final match between MC/Puma and that sadly was it.
Hold on a second while I decide which person I want to support with my money to make "ESPORTS" grow.
lol
1. Did you watch any games past idrA vs. Boxer?
2. The stream was perferct, I was running 1 Ultra quality stream and 1 midquality stream on the dual-stream page with the hotkeys, switching those streams as fast as Losira on that keyboard man
Don't blame MLG on your horrible internet - Try go look at the livereport threads, I promise you, if there was people that were having issues, you would notice right away!
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So, Sundance is basically trying to guilt us into buying HD stream now? No thanks. He might as well say "If you don't buy MLG passes you're killing ESPORTS!"
I do wish people would stop talking about business models and revenue as if they have any idea what-so-ever. If they come out and publically state how they make money and how much they make then you can act like an expert. In the mean time, call it what it is: ill-informed speculation.
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It's great how Sundance is constantly trying to increase the prize pool, however this particular criteria is kind of dodgy. Membership sales is not the only form of financing MLG has. What about sponsorships, ad revenue, ticket/pass sales? By making membership sales the bottom line of whether the prize money will increase or decrease, seems questionable and full of ulterior motives.
Why Sundance? Is MLG losing sponsors? Is the venue/trucks costing too much? Venture capitalists backing out? All this twitter announcement does is make things even cloudier for me.
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On July 30 2011 20:53 hdan wrote:Show nested quote +On July 30 2011 20:49 adeptz wrote:On July 30 2011 03:47 kentarre wrote:I think a lot of people are simply not understanding the business aspect of MLG. MLG is a company, funded by venture capital. To date, they have raised ~52.5 million dollars (source: http://www.industrygamers.com/releases/18597/). They were founded in 2002, and while I don't have the raw stats on hand, ~35 millionw as raised in 2006, ~10 million raised in 2010. The other 6-7 million were spread across the remaining years. Venture capital is being raised for companies for various reasons, the main are 1) the company has a promising business model, but not enoguh capital to push it forward; or 2) the company has a very popular service and audience, but the business model is not entirely stable yet and requires capital to stablize. Again, without knowing anything regarding the insides of how MLG functions or utilizes its finances, I am of the opinion that MLG falls under category 2. In that MLG has proven it has a large audience, it is a popular service, however the source of revenue to provide such an ongoing service is shakey. Now this is partly the fault of MLG on some points. The choice to provide full HQ streaming for the last MLG event was done at cost to MLG. This was a service towards the fans that was not up to par for the amount of money they asked for, so they had to take the hit and go forward. Now take the time into consideration. This is end of July rolling into August of 2011. In business terms this is the middle of Q3. In order to secure additional funding (if its needed), or to prove that it has a strong business model, MLG needs to prove that it can make enough revenue that it can stand on its own two feet. Or it needs to make a sizable growth in that direction to prove to investors. As Sundance mentioned, a 10% interest in membership from its audience is not unreasonable, especially from an investment stand point. Spotify (a recent launch in NA but huge following in EU) only yields a 10-15% return on their premium membership services. 10% is a ballpark low number for any investor to be looking for. TLDR: what this really means is that if Sundance, and by extension MLG, can prove that eSports fans are willing to invest in paid services for better viewing and playing experiences, that looks AWESOME to investors. Investors will whip out their checkbooks and invest more into MLG. MLG will in return get more funding and be able to expand further. This is why Sundance said he can close the deal and push out more tournaments, ladders, and higher prize pools. You want eSports to push forward? Put up the money. This. Finally someone who understands how business works. I think this shows that Starcraft 2 has basically revived MLG and if it wasnt for MLGs sudden amazing growth in viewers, and money going in it would probably be bankrupt by now, and MLG is paying the progamers that made it all happen a slap in the face.
Let's not delude ourselves, it's a symbiotic relationship between two entities. One wouldn't grow much without the other, but that's a different issue.
It's not a slap in the face - anyone who has any business acumen would know/can imagine the short term losses MLG had to take to turn things around from Dallas to Columbus. Last i heard, satellite trucks don't come cheap, not to mention the free HQ streams over the second part of the tourney. And that's just two things, i'm sure there are many facets that were tweaked/introduced to make it the experience it was at Columbus.
Kentarre in his post above pretty much outlines the major points: and the point isn't really about sustaining it, but expanding it. I see the MLG-Esports audience relationship as a give and take one: they've given and we've taken. Now it's our turn to give back.
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On July 30 2011 21:38 Azz wrote:Show nested quote +On July 30 2011 21:35 Nayl wrote:
I don't see the problem everyone have with MLG's prize pool. MLG is doing the right thing, spending money to have perfect event rather than spending all its cash to boast the prize pool.
Sirscoot himself criticized Riot games for spending tons of money on prizes instead of actually making the game esports friendly. NASL has huge prize pool, but with subpar experience for the viewers.
MLG/Dreamhack ect on the otherhand focus on the event itself rather than just having huge prize pool to draw the audience. Which method do you think will be sustainable in the end? The best tournament to date is probably the HDH 1. If only they could have done the HDH2 with the new prize pool.
LOL, you've got some interesting views on things, I think you're young and not experienced in business at all
Economics 101. there's a difference between revenue and profit, many businesses plan to become profitable after 4-7 years whilst growing during that period you have to re-invest your revenue into the business.
Almost every company for example in silicon valley grows the way that MLG have, by steadily increasing their customer base and diluting their equity via venture capital investment, the VC people make their money if and when the business that they have invested in floats and becomes a publicly traded company or is acquired by another company.
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I bought a pass because I'm interested in the VODs, and even if I wouldn't be killing ESPORTS if I hadn't done it, atleast now I'm sure that I've done my part in supporting it.
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Does anybody know how much running the streams and whatnot costs? I`m assuming its a lot. While I think they should raise the prize pool no matter what, I do like the incentive he is putting out. I really wish I knew what kind of money that required though. You have to take into account other expenses, venues, computers, employee salary (chairs). But going to mlg cost about 60 bucks weather its to watch or compete. Plus the thirty dollars for a year to the stream. I dont think its farfetched to say that Mlg is making a boatload, but it also isnt far fetched that they are barely getting by.
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On July 30 2011 21:50 ELA wrote:Show nested quote +On July 30 2011 21:25 Zomodok wrote:
Hmm MLG Dallas is a complete failure, stream dies constantly and latency at the venue is downright horrible to the point where the game is near unplayable.
Sundance comes out and goes "We messed up and it's a disgrace, we are going to fix it" and proceeds to do Columbus which while it had it's hiccups, was an overall great event. Even allowing the HD stream to be previewed to everybody. Sundance then continues to work with the community and asks questions about what needs to be improved and how and has an overall positive attitude.
NASL becomes a running joke with "the audio" guy and the horrible commentating and just the amateur presentation and Incontrol cries like a baby going "If you don't support us you want Esports to fail" and continues to cry about growing pains and "learning" experiences, but never improves on any of the communities input or improves at all. The only good thing about the NASL was the Final match between MC/Puma and that sadly was it.
Hold on a second while I decide which person I want to support with my money to make "ESPORTS" grow.
lol 1. Did you watch any games past idrA vs. Boxer? 2. The stream was perferct, I was running 1 Ultra quality stream and 1 midquality stream on the dual-stream page with the hotkeys, switching those streams as fast as Losira on that keyboard man Don't blame MLG on your horrible internet - Try go look at the livereport threads, I promise you, if there was people that were having issues, you would notice right away!
Did you read the guys post past the first sentence? You do know MLG Dallas was the one two MLG's ago right? He is on the side of MLG in his post, saying that Sundance got things together after the failings in Dallas, and compares it to NASL who never really fixed anything in a timely manner.
On July 30 2011 21:53 W2 wrote:
It's great how Sundance is constantly trying to increase the prize pool, however this particular criteria is kind of dodgy. Membership sales is not the only form of financing MLG has. What about sponsorships, ad revenue, ticket/pass sales? By making membership sales the bottom line of whether the prize money will increase or decrease, seems questionable and full of ulterior motives.
Why Sundance? Is MLG losing sponsors? Is the venue/trucks costing too much? Venture capitalists backing out? All this twitter announcement does is make things even cloudier for me.
Because being able to go to a sponsor and say "We have 100,000 people that have paid $30 to sign up for a whole year of membership" is a big deal. This shows that you not only have consumers but you have return consumers.
These are subscriptions, not once off events where someone watches an MLG, hates it, and then doesn't watch the next one. 100,000 members guarantees not only that 100,000 people will be watching MLG each time it comes around, but that there are 100,000 people that have already shown they have the capacity to spend money on gaming related things. As such, they are the perfect targets for sponsors who want to sell products. If you want to pull sponsors you need to show your viewers can be converted to sales, having 1 billion viewers is worthless if they have no spending potential.
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EDIT: Sorry for the double post, I assumed with how fast this thread was going that someone would post between them.
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On July 30 2011 21:58 Enzyme wrote:Show nested quote +On July 30 2011 21:50 ELA wrote:On July 30 2011 21:25 Zomodok wrote:
Hmm MLG Dallas is a complete failure, stream dies constantly and latency at the venue is downright horrible to the point where the game is near unplayable.
Sundance comes out and goes "We messed up and it's a disgrace, we are going to fix it" and proceeds to do Columbus which while it had it's hiccups, was an overall great event. Even allowing the HD stream to be previewed to everybody. Sundance then continues to work with the community and asks questions about what needs to be improved and how and has an overall positive attitude.
NASL becomes a running joke with "the audio" guy and the horrible commentating and just the amateur presentation and Incontrol cries like a baby going "If you don't support us you want Esports to fail" and continues to cry about growing pains and "learning" experiences, but never improves on any of the communities input or improves at all. The only good thing about the NASL was the Final match between MC/Puma and that sadly was it.
Hold on a second while I decide which person I want to support with my money to make "ESPORTS" grow.
lol 1. Did you watch any games past idrA vs. Boxer? 2. The stream was perferct, I was running 1 Ultra quality stream and 1 midquality stream on the dual-stream page with the hotkeys, switching those streams as fast as Losira on that keyboard man Don't blame MLG on your horrible internet - Try go look at the livereport threads, I promise you, if there was people that were having issues, you would notice right away! Did you read the guys post past the first sentence? You do know MLG Dallas was the one two MLG's ago right? He is on the side of MLG in his post, saying that Sundance got things together after the failings in Dallas, and compares it to NASL who never really fixed anything in a timely manner.
True - I somehow read his opening sentence as Anaheim
I withdraw my previous statement, sry Zomodok
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Look at the competition at MLG.
Look what players have flown out there.
Look how much money has been spent by teams on their players, including those just coming to the open bracket.
Look at the quality of the games and atmosphere.
What compulsion is there for MLG to change anything? This tournament and scene is epic with only 5k for first place - if you increase that by a factor of 10 would any of the above become better 10 times? I doubt it - they are already amazing.
It seems to me the only logic in raising the prize pool is to make it mesh in with the serious/proffessional/hyped atmosphere of the whole tournament. I.e - "we have epic players and scale, but the prize pool looks a bit silly being so low", but there is no business sense in raising it. Therefore I think Sundance is doing a good thing 
Also, surely Incontrol should be preparing and focusing on starcraft 2, not on his next internet argument?
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Pretty sure Azz is trolling this thread, since he obviously has no idea about the profit numbers etc that are his entire argument.
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On July 30 2011 21:53 W2 wrote:
It's great how Sundance is constantly trying to increase the prize pool, however this particular criteria is kind of dodgy. Membership sales is not the only form of financing MLG has. What about sponsorships, ad revenue, ticket/pass sales? By making membership sales the bottom line of whether the prize money will increase or decrease, seems questionable and full of ulterior motives.
Why Sundance? Is MLG losing sponsors? Is the venue/trucks costing too much? Venture capitalists backing out? All this twitter announcement does is make things even cloudier for me.
I'm going to venture to say that ticket/pass sales barely (or not at all) cover renting out convention centers, paying admins and moving stuff from venue to venue. That stuff is expensive.
As far as sponsorships and advertising go, its a sellers market at the moment. There is an insane amount of ad space to be filled in a plethora of media. Coupled with most major companies cutting back marketing budgets at this time, I feel we may be overestimating the amount of money that MLG can generate from sponsorship and adspace.
Having the 100,000 subs for MLG memberships would prove to these venture capitalists, who are the ONLY people keeping MLG afloat at the moment, that the demographic that MLG is appealing to ie 16-36 year old gaming males, are willing to provide a solid revenue base on which MLG can give consistent, dependable revenue. The entire esports industry, every bit of it is precariously in the hands of sponsors - as far as I can see it makes up the majority of revenue for nearly ever major organisation.
Sundance is simply laying out the facts. He scaled up massively to accomodate SC2. New staff, new stream, more players, more commentators, satellite trucks.....that stuff all costs money. Lots of money. He bet on SC2 providing a foundation on which to grow MLG into a sustainable business, not one looking for handouts from venture capitalists and sponsors, rather one that has its own customer base that pays real money for the content it produces.
That content is more than worth the tiny price per day you pay for gold.
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On July 30 2011 17:43 Jibba wrote:![[image loading]](http://upload.wikimedia.org/wikipedia/commons/d/d7/Snake-oil.png) I don't see how you possibly think it's appropriate for you to criticize another business's advertising method, especially when that business has a proven track record. GosuCoaching v.1 GosuCamp GosuGuide GosuBodyMassage
Geoff "InCOntrol" RObinson AND The Former Toronto BLue Jays General Manager J.P. Ricciardi
What do J.P. Ricciardi and Geoff "InCOntrol" RObinson have in common you might ask?
In 2001 JP Ricciardi was hired as General Manager of the Toronto Blue Jays.
He was not always honest in his dealing with employees, colleagues, and fans right from his first day on the job. In the beginning the lying and half-truths seemed to be tolerated. There was the occasional "zealot" of a Blue Jay fan who hated JP Ricciardi's constant half-truths and occasional outright lies. But, they were basicallly ignored and JP Ricciardi did a nice job covering up his dishonest tracks.
As the years went on and lie after lie piled up. And, dubious incident and "scandal" piled up.
During 2008, Seemingly over night JP Ricciardi (from a public relations stand point) became thoroughly hated by all. He was doing just as much lying and deceit in 2008 as he did from 2001 to 2007.
What happened was that a CRITICAL MASS of dubious events piled up so that the queit, sober thinking, basically optimistic Toronto Blue Jays fan finally decided
Ricciardi was a complete fraud.
In watching Geoff Robinson get absolutely buried on this forum board for what I'd call meagre infractions or slightly deceptive actions I think he is experiencing the same thing J.P. Ricciardi did as General Manager of the Toronto Blue Jays in 2008.
It seems to me Geoff "inControl" Robinson is a bit of a bullshitter. His plans often don't work out and they end up costing the SC2-consumer a few bucks here or there. But, he is not some master charlaton robbing "the community" of millions. But man.. is he hated ....
Based on what I've seen of his actions he is slightly underhanded... and a bit of liar. But, I got news for the 15 year olds on this forum.
MOST ADULTS ARE LIARS. Geoff is a bit of a bullshitter with a high profile whose every word gets magnified because of his profile.
I'd say 20% of the TL.Net members are "bullshit more" in their lives than Robinson does in his. its his high profile that is killing him. And, we've now built up a CRITICAL MASS of dishonest deeds and now the mob appears to be circling.
I get the feeling if InControl were in a Protoss mirror against Satin that most of TL.Net would be cheering on the devil.
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MLG is no different than all those venture-capital fueled "internet" societies that blossomed during the nineties. Their strategy was to offer an internet-based service, and to monetize the generated traffic on a second moment.
Most companies (all those you never heard about) failed at the first stage of this plan, trying to seduce a large user base. it happens also in e-sports. Remember 2009? Remember the Championship Gaming Series getting shut down? That’s what happens when you are making losses and you fail to secure more venture capital to keep going until the next year (http://www.nytimes.com/2009/04/02/sports/othersports/02video.html ). Under Matthew Bromberg leadership, MLG obtained a sizeable chump of capital from investors, and even managed to turn a small profit in 2009 (same source). Note that this means they were working in the red for 2006-2008.
How did they do in 2010? Did they actually had benefits in 2009? Of course, we don’t know, but the management changes in 2010 gave some hints about the problems of MLG and the strategies of Sundance and Bromberg: http://reflectzyn.com/competitive-gaming/2010/05/11/matt-bromberg-resigns-as-ceo-of-major-league-gaming-sundance-digiovanni-steps-in/
It seems they had two options, slow organic growth, securing the small cash revenue they had obtained, as Bromberg wanted, or a more ambitious strategy –based in SC2 as we know now- like Sundance wanted. Bromberg left MLG and Sundace become their new CEO. Some months later, we learnt they got another 10 millions in venture capital, in December 2010: http://www.venturecapitalupdate.com/company/12/26/major-league-gaming.html
It seems pretty obvious that since 2010, MLG decided to invest a lot of money of their events, and on a new game: SC2, to increase hugely their viewership. We can be pretty certain that since 2010, they are working again in the red, and the disaster of their event in Dallas and the measures they took to appease the uproar put them probably in the deep deep red. Therefore, either they achieve to monetize –fast- the traffic they are obtaining, through ads and pay-per-view, or they fold, downsize or die.
This is a huge business, with 46 millions invested since 2006. Ask yourselves, how much money do you think the investors had gained since 2006? What’s the expected Return on Investment (ROI) for a business like this one? For a risky start-up, it should be at least around a compounded ROI of 15%...
People in here are too used to the “everything is free” culture of the internet. They are forgetting how heavy the fixed costs are for content- providers: a convention center for several days, streaming as much date as the superbowl (and believe me, this shit is expensive), the salaries for all the people working there, all this stuff adds up and explains why they are in the red. People keep saying MLG has the lowest profit to prizes ratio of all tournaments. I kindly ask them to shut the fuck up. You don’t have their financial reports. Period. And all the information we have points to the same conclusion, 2010 was a “bad year”.
I’m not without critics towards Sundance. I do believe he thinks SC2 this year, and probably LoL next year, are cash cows. I also believe he should give more money to the players because the cost structure of SC2 doesn’t work the same way than Halo. In Halo, they have huge expenses because they nurture the entire progamer userbase. In SC2, these expenses are paid by the teams. Therefore, they could find some money for the SC2 players. At least, we can say that E-sports work just like sports. Of course, athletes can win a fortune, but their salaries are just small fraction of the money generated by the sports. This is capitalism and how it work (and you can hate it for it), but salaries and prizes will always be an adjustment variable of costs, especially if you can have the same good players for a prize of 10000 dollars or for 100000 dollars. As a side note, this is way athletes unionize.
So, MLG needs your money? Yes.
Is this going to help the players? Marginally, but it will please the investors a lot.
If they don’t monetize the traffic generated, will they downsize or close? Probably, nobody likes to lose millions a year.
And a last question, is E-sports a bubble? I don’t know, but I think so. What I’m sure about is that even if Sundance is right, a lot of the new structures (NASL for sure) will fold in the next two years just because this is a competitive business.
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Wanted to post this as a blog, but i couldn't find the button? I feel like such a noob 
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On July 29 2011 14:30 ChrysaliS_ wrote:
Did the free stream ever even top 100k viewers for Columbus? Seems to be a pretty ridiculous benchmark.
He never mentioned anything about sc2 on his tweet so I'd assume it's for all games? And they did mention something like a 500k unique visitors or a figure like that on live on 3 over the weekend
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I feel like I got $29 worth out of just MLG Columbus to be completely honest. I went straight to the MLG site and purchased the gold membership after reading this.
If my $29 can help you attract the best players in the world to your tournament I am very happy to chip in. So far this year you guys have proven that you are listening to the community and doing whatever it takes to produce a high quality product.
Definitely worth $29 for me as a viewer, and if that money helps the prize pool out for the players, fuck yeah. If there are more events next year maybe one will be close enough for me to go in person.
Sundance fighting!
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On July 30 2011 22:24 Rayansaki wrote:Show nested quote +On July 29 2011 14:30 ChrysaliS_ wrote:
Did the free stream ever even top 100k viewers for Columbus? Seems to be a pretty ridiculous benchmark. He never mentioned anything about sc2 on his tweet so I'd assume it's for all games? And they did mention something like a 500k unique visitors or a figure like that on live on 3 over the weekend
Should we be expected to support other games if all we really want to watch is Starcraft? It seems sort of unreasonable.
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On July 30 2011 22:29 Kyir wrote:Show nested quote +On July 30 2011 22:24 Rayansaki wrote:On July 29 2011 14:30 ChrysaliS_ wrote:
Did the free stream ever even top 100k viewers for Columbus? Seems to be a pretty ridiculous benchmark. He never mentioned anything about sc2 on his tweet so I'd assume it's for all games? And they did mention something like a 500k unique visitors or a figure like that on live on 3 over the weekend Should we be expected to support other games if all we really want to watch is Starcraft? It seems sort of unreasonable.
I never said that, I'm just saying that the 100k number isn't that unlikely since it isn't just the sc community that counts towards it.
And yes, you are supporting other games as much as other game's communities are supporting sc if you aim for that figure.
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EPT
