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Calgary25963 Posts
On February 15 2012 06:00 iky43210 wrote:Show nested quote +On February 15 2012 05:34 Chill wrote:On February 15 2012 05:25 m4inbrain wrote:On February 15 2012 05:22 Chill wrote:On February 15 2012 05:19 Chicane wrote:On February 15 2012 05:02 T.O.P. wrote:On February 15 2012 03:50 Kuni wrote:
Are none of the other good tournaments (Dreamhack, IPL etc) making any money? Because if it is only MLG, then there is something wrong that won't be fixed by PPV.
Viewers will drop significantly with PPV. I wonder if less exposure is a good thing. Doubt it. All the big tournaments lose money. Actually all the big tournaments profit. Link to their balance sheets please. Isnt the fact that theyre still around "evidence" enough? Do you really think a tournament will survive if they lose money for 10 years straight? Do you actually think an organisation would even consider to rescue a "business" which paints red numbers for 10 years? Well. I actually do believe that they are in the blacks, without seeing their balance sheets. Again, the fact that theyre still here is proof enough. Edit: although it was a joke, i stick to my opinion.  A tournament that would make consistenly a - at the end of the year wouldnt be around for so long. Look at history. The majority of major ESPORTS companies have been farces based on non-payment and then a quick declaration of bankruptcy. It's easy to get some initial investments, take a loss, and then hope that the numbers stack up to make it sustainable. MLG trimmed all their fat, cut all their extra production, fired all the writers, and started charging PPV on the stream. If that doesn't ring bells in your ears then I don't know what will. I don't think this is a case of a greed, I think it's a desire to actually tun a profit. yes, because obviously the case of 10 years using an ad based model should try to trim fats and use PPV in order to turn profit after a substantial growth in viewership. Again full of speculation with no evidence backing. You can't claim something like "esport makes no profit" without some evidence
Read what people working for these companies have posted time and time again. I don't have access to their balance sheets so I can only cite what people have publically said, what the debt figures posted in this thread say, and I can reference what people have privately told me (without disclosing who they are).
Conversely, what is your basis for posting that they are making money?
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On February 15 2012 06:01 Quenchiest wrote:Show nested quote +On February 15 2012 05:52 Chill wrote:On February 15 2012 05:38 Quenchiest wrote:On February 15 2012 05:34 cz wrote:On February 15 2012 05:33 legaton wrote:On February 15 2012 05:04 iky43210 wrote:On February 15 2012 04:19 legaton wrote:
Well, i guess we are just hearing the bubble pop
Today's business model is just not sustainable. Costs in the e-sports industry and specially in SC2 are extremely high. To run a LAN, you must face a huge investment for the location of the hall (several thousands dollars, if not more, for an MLG sized event). But SC2 LAN are specially expensive because you truly have a globalized game, so someone (either the teams or the event organizers) has to pay a small fortune on plane tickets. You also need a lot of fairly new computers as you could run into graphic lag if you use PC with bad graphic cards, and you need a top of the notch internet connection as you depend on it to play the game.
On the other hand, revenues are scarce. For a long time, the only sources of revenue were the entry fees of viewers (non existent on a closed door event as this one) and the ad revenue. Problem is the ad revenue is way smaller most people believe it is. Most events end up with red numbers, and huge event organizers are losing money. MLG only survives thanks to the gullibility of some venture capitalists that poured millions on a "booming" industry, but you can't ride for free forever. It is fair for them to try to cut their losses.
Sadly, MLG is fucked over. The ppp system works for sports events because they have a total monopoly on some sports. In boxing or in the UFC, you either pay or you don't see anything. In Starcraft, a 1000 euros monthly cup as the MSI/Millenium tournament has a roster as good as MLG. This business model is bound to fail too.
Bye bye SC2, it was nice knowing you. people ought to not use the word bubble when they have no idea what they're talking about. Also you provide alot of speculation with no citation whatsoever. MLG has been running for 10+ years, I doubt their previous ad-based model was constantly putting them in the red. Companies don't operate, even expand, on the basis of being red for so many years. So much for your speculations This isn't a case of "cutting your loses", its about attempting to use a new business model to achieve more profit. Simple as that. Nobody is dumb enough to "cut your loses" by paying tens of thousands of dollars ahead of time to fly everyone around the globe to NY, in addition to hire a huge list of expensive casters. Its an experimentation at the new model I'm going to show you something, it is called a SEC form: http://www.sec.gov/Archives/edgar/data/1371551/000137155111000001/xslFormDX01/primary_doc.xmlYou will see it was filled by MLG and they are selling debt + options on their business. They sold 3,1 millions. They have done this several times on the last years: You just need to search the SEC archives. http://www.sec.gov/cgi-bin/browse-edgar?company=Major League Gaming Inc.&match=&CIK=&filenum=&State=&Country=&SIC=&owner=exclude&Find=Find Companies&action=getcompanyThe MLG costs a lot of money. It's a super expensive operation and they've been fairly successful at securing venture capital, but it seems they are burning money to exist. Everybody here is so delusional about the financial state of the "e-sports" scene. Not all of us. The e-sports audience is one of the most difficult audiences to monetize. It's full of people who are used to pirating / not paying for things and/or don't have credit cards / don't have much money. Really tough. It's not even so much that. It's that when you charge above and beyond what others are charging (or not charging) for similar events you're not going to get a lot of bites. I don't doubt there's some people that don't get it, but I'd say the majority probably realize this is an expensive business to run. That said, you can't just start gouging people because you need money and expect them to pay up. But everyone is losing money. The lesson here is that ESPORTS just isn't profitable. You either give it away undervalued like everyone else, or charge what it costs and get labeled "gouging". Lose/Lose. If 20 bucks for a weekend event is what it's ultimately going to cost then I'm afraid this business just isn't going to last very long unless someone can come up with a sustainable model. With the abundance of tournaments and free viewing it's going to be hard to convince anyone to drop 20 dollars on a weekend event.
I think the point was that there won't be any free viewing events in the future, as they're all losing money. If no one is willing to pay to watch, then the ESPORTS scene is doomed.
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Calgary25963 Posts
On February 15 2012 06:01 Quenchiest wrote:Show nested quote +On February 15 2012 05:52 Chill wrote:On February 15 2012 05:38 Quenchiest wrote:On February 15 2012 05:34 cz wrote:On February 15 2012 05:33 legaton wrote:On February 15 2012 05:04 iky43210 wrote:On February 15 2012 04:19 legaton wrote:
Well, i guess we are just hearing the bubble pop
Today's business model is just not sustainable. Costs in the e-sports industry and specially in SC2 are extremely high. To run a LAN, you must face a huge investment for the location of the hall (several thousands dollars, if not more, for an MLG sized event). But SC2 LAN are specially expensive because you truly have a globalized game, so someone (either the teams or the event organizers) has to pay a small fortune on plane tickets. You also need a lot of fairly new computers as you could run into graphic lag if you use PC with bad graphic cards, and you need a top of the notch internet connection as you depend on it to play the game.
On the other hand, revenues are scarce. For a long time, the only sources of revenue were the entry fees of viewers (non existent on a closed door event as this one) and the ad revenue. Problem is the ad revenue is way smaller most people believe it is. Most events end up with red numbers, and huge event organizers are losing money. MLG only survives thanks to the gullibility of some venture capitalists that poured millions on a "booming" industry, but you can't ride for free forever. It is fair for them to try to cut their losses.
Sadly, MLG is fucked over. The ppp system works for sports events because they have a total monopoly on some sports. In boxing or in the UFC, you either pay or you don't see anything. In Starcraft, a 1000 euros monthly cup as the MSI/Millenium tournament has a roster as good as MLG. This business model is bound to fail too.
Bye bye SC2, it was nice knowing you. people ought to not use the word bubble when they have no idea what they're talking about. Also you provide alot of speculation with no citation whatsoever. MLG has been running for 10+ years, I doubt their previous ad-based model was constantly putting them in the red. Companies don't operate, even expand, on the basis of being red for so many years. So much for your speculations This isn't a case of "cutting your loses", its about attempting to use a new business model to achieve more profit. Simple as that. Nobody is dumb enough to "cut your loses" by paying tens of thousands of dollars ahead of time to fly everyone around the globe to NY, in addition to hire a huge list of expensive casters. Its an experimentation at the new model I'm going to show you something, it is called a SEC form: http://www.sec.gov/Archives/edgar/data/1371551/000137155111000001/xslFormDX01/primary_doc.xmlYou will see it was filled by MLG and they are selling debt + options on their business. They sold 3,1 millions. They have done this several times on the last years: You just need to search the SEC archives. http://www.sec.gov/cgi-bin/browse-edgar?company=Major League Gaming Inc.&match=&CIK=&filenum=&State=&Country=&SIC=&owner=exclude&Find=Find Companies&action=getcompanyThe MLG costs a lot of money. It's a super expensive operation and they've been fairly successful at securing venture capital, but it seems they are burning money to exist. Everybody here is so delusional about the financial state of the "e-sports" scene. Not all of us. The e-sports audience is one of the most difficult audiences to monetize. It's full of people who are used to pirating / not paying for things and/or don't have credit cards / don't have much money. Really tough. It's not even so much that. It's that when you charge above and beyond what others are charging (or not charging) for similar events you're not going to get a lot of bites. I don't doubt there's some people that don't get it, but I'd say the majority probably realize this is an expensive business to run. That said, you can't just start gouging people because you need money and expect them to pay up. But everyone is losing money. The lesson here is that ESPORTS just isn't profitable. You either give it away undervalued like everyone else, or charge what it costs and get labeled "gouging". Lose/Lose. If 20 bucks for a weekend event is what it's ultimately going to cost then I'm afraid this business just isn't going to last very long unless someone can come up with a sustainable model. With the abundance of tournaments and free viewing it's going to be hard to convince anyone to drop 20 dollars on a weekend event.
I agree. As I've said, I believe these companies undercut each other trying to give more and more value until nothing is sustainable anymore. It's become a game of chicken - bleed money until everyone else dies and then start charging what it really costs because you're now the monopoly.
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On February 15 2012 06:03 Chill wrote:Show nested quote +On February 15 2012 06:00 iky43210 wrote:On February 15 2012 05:34 Chill wrote:On February 15 2012 05:25 m4inbrain wrote:On February 15 2012 05:22 Chill wrote:On February 15 2012 05:19 Chicane wrote:On February 15 2012 05:02 T.O.P. wrote:On February 15 2012 03:50 Kuni wrote:
Are none of the other good tournaments (Dreamhack, IPL etc) making any money? Because if it is only MLG, then there is something wrong that won't be fixed by PPV.
Viewers will drop significantly with PPV. I wonder if less exposure is a good thing. Doubt it. All the big tournaments lose money. Actually all the big tournaments profit. Link to their balance sheets please. Isnt the fact that theyre still around "evidence" enough? Do you really think a tournament will survive if they lose money for 10 years straight? Do you actually think an organisation would even consider to rescue a "business" which paints red numbers for 10 years? Well. I actually do believe that they are in the blacks, without seeing their balance sheets. Again, the fact that theyre still here is proof enough. Edit: although it was a joke, i stick to my opinion. A tournament that would make consistenly a - at the end of the year wouldnt be around for so long. Look at history. The majority of major ESPORTS companies have been farces based on non-payment and then a quick declaration of bankruptcy. It's easy to get some initial investments, take a loss, and then hope that the numbers stack up to make it sustainable. MLG trimmed all their fat, cut all their extra production, fired all the writers, and started charging PPV on the stream. If that doesn't ring bells in your ears then I don't know what will. I don't think this is a case of a greed, I think it's a desire to actually tun a profit. yes, because obviously the case of 10 years using an ad based model should try to trim fats and use PPV in order to turn profit after a substantial growth in viewership. Again full of speculation with no evidence backing. You can't claim something like "esport makes no profit" without some evidence Read what people working for these companies have posted time and time again. I don't have access to their balance sheets so I can only cite what people have publically said, what the debt figures posted in this thread say, and I can reference what people have privately told me (without disclosing who they are). Conversely, what is your basis for posting that they are making money?
I have reedited my posts that you quoted for some other opinions. I am simply basing my reasoning why I believe they're making money on the fact that its still alive after 10 years. If it can sustain itself for 10 years with less viewers, I don't see how having drastically more now due to sc2 would do the opposite.
your entire assumption of enough investments to pay off the debt each year for 10+ years is both illogical and improbable.
Just because you know a few "esport people" that are doing in the red doesn't mean all of them are.
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On February 15 2012 06:03 Chill wrote:Show nested quote +On February 15 2012 06:00 iky43210 wrote:On February 15 2012 05:34 Chill wrote:On February 15 2012 05:25 m4inbrain wrote:On February 15 2012 05:22 Chill wrote:On February 15 2012 05:19 Chicane wrote:On February 15 2012 05:02 T.O.P. wrote:On February 15 2012 03:50 Kuni wrote:
Are none of the other good tournaments (Dreamhack, IPL etc) making any money? Because if it is only MLG, then there is something wrong that won't be fixed by PPV.
Viewers will drop significantly with PPV. I wonder if less exposure is a good thing. Doubt it. All the big tournaments lose money. Actually all the big tournaments profit. Link to their balance sheets please. Isnt the fact that theyre still around "evidence" enough? Do you really think a tournament will survive if they lose money for 10 years straight? Do you actually think an organisation would even consider to rescue a "business" which paints red numbers for 10 years? Well. I actually do believe that they are in the blacks, without seeing their balance sheets. Again, the fact that theyre still here is proof enough. Edit: although it was a joke, i stick to my opinion. A tournament that would make consistenly a - at the end of the year wouldnt be around for so long. Look at history. The majority of major ESPORTS companies have been farces based on non-payment and then a quick declaration of bankruptcy. It's easy to get some initial investments, take a loss, and then hope that the numbers stack up to make it sustainable. MLG trimmed all their fat, cut all their extra production, fired all the writers, and started charging PPV on the stream. If that doesn't ring bells in your ears then I don't know what will. I don't think this is a case of a greed, I think it's a desire to actually tun a profit. yes, because obviously the case of 10 years using an ad based model should try to trim fats and use PPV in order to turn profit after a substantial growth in viewership. Again full of speculation with no evidence backing. You can't claim something like "esport makes no profit" without some evidence Read what people working for these companies have posted time and time again. I don't have access to their balance sheets so I can only cite what people have publically said, what the debt figures posted in this thread say, and I can reference what people have privately told me (without disclosing who they are). Conversely, what is your basis for posting that they are making money?
Take, i guess. HSC did black numbers, as he stated on a german website.
So i think both statements are completely wrong. Not every tournament loses money (which we can read) - and not everyone is making profit. Thats that.
Edit: argh, i think i misunderstood you. Sorry about that.
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On February 15 2012 06:00 m4inbrain wrote:Show nested quote +On February 15 2012 05:50 Adreme wrote:On February 15 2012 05:49 m4inbrain wrote:On February 15 2012 05:44 Kralic wrote:On February 15 2012 05:43 m4inbrain wrote:On February 15 2012 05:34 Chill wrote:On February 15 2012 05:25 m4inbrain wrote:On February 15 2012 05:22 Chill wrote:On February 15 2012 05:19 Chicane wrote:On February 15 2012 05:02 T.O.P. wrote:
[quote]
All the big tournaments lose money. Actually all the big tournaments profit. Link to their balance sheets please. Isnt the fact that theyre still around "evidence" enough? Do you really think a tournament will survive if they lose money for 10 years straight? Do you actually think an organisation would even consider to rescue a "business" which paints red numbers for 10 years? Well. I actually do believe that they are in the blacks, without seeing their balance sheets. Again, the fact that theyre still here is proof enough. Edit: although it was a joke, i stick to my opinion. A tournament that would make consistenly a - at the end of the year wouldnt be around for so long. Look at history. The majority of major ESPORTS companies have been farces based on non-payment and then a quick declaration of bankruptcy. It's easy to get some initial investments, take a loss, and then hope that the numbers stack up to make it sustainable. MLG trimmed all their fat, cut all their extra production, fired all the writers, and started charging PPV on the stream. If that doesn't ring bells in your ears then I don't know what will. I don't think this is a case of a greed, I think it's a desire to actually tun a profit. MLG trimmed all their fat, so thats why they hold their tournament in NYC? Because their offices and studio where this tournament will be taking place are there? So having a studio in one of the most expensive cities in the world is smart then, yes? "Cant be trimmed down, we have to have a more expensive tournament, because we have our studio in the most expensive town in the western hemisphere - and thats smart.". Sorry. I dont want to sound insulting, but that actually is completely no argument, at all. Even more so, it feels a bit stupid to me, and "two-faced" (dont know the right word in english). People have business offices in New York because it is strategically a smart business decision to do so. Yeah. Sounds really smart to me, especially if you claim to do red numbers all the time (which may be true - i dont believe it, but that doesnt matter). Maybe stop doing "smart" business decisions, and start doing "reasonable". You see, it maybe good for your image to have an office in big apple, but its bad for your image when you start to look two-faced. If you dont make money, you should not be in new york, its that easy. Cut your expenses, even if that means to give up the "strategically smart" office in NY. Which screws you and your fans over, if you think about it (thats why the pass is that expensive, Hotel and stuff, studiorent etc - it could be so much cheaper).
Actually moving your entire business and its employees is an incredible expense to take on.
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On February 15 2012 05:22 Chill wrote:Show nested quote +On February 15 2012 05:19 Chicane wrote:On February 15 2012 05:02 T.O.P. wrote:On February 15 2012 03:50 Kuni wrote:
Are none of the other good tournaments (Dreamhack, IPL etc) making any money? Because if it is only MLG, then there is something wrong that won't be fixed by PPV.
Viewers will drop significantly with PPV. I wonder if less exposure is a good thing. Doubt it. All the big tournaments lose money. Actually all the big tournaments profit. Link to their balance sheets please.
Im a bit lazy since im posting with mobile. DH is required to submit a anual report since its a organisation. You can view it on some swedish site(link was posted on tl last year). They werent in red
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On Feb 14 2012 16:03<span style='color:#d20000'> (2 min)</span> Kira__ wrote:Show nested quote +On Feb 14 2012 16:01<span style='color:#d20000'> (4 min)</span> Quenchiest wrote:On Feb 14 2012 15:52<span style='color:#d20000'> (13 min)</span> Chill wrote:On Feb 14 2012 15:38<span style='color:#d20000'> (27 min)</span> Quenchiest wrote:On Feb 14 2012 15:34<span style='color:#d20000'> (31 min)</span> cz wrote:On Feb 14 2012 15:33<span style='color:#d20000'> (32 min)</span> legaton wrote:On Feb 14 2012 15:04 iky43210 wrote:On Feb 14 2012 14:19 legaton wrote:
Well, i guess we are just hearing the bubble pop
Today's business model is just not sustainable. Costs in the e-sports industry and specially in SC2 are extremely high. To run a LAN, you must face a huge investment for the location of the hall (several thousands dollars, if not more, for an MLG sized event). But SC2 LAN are specially expensive because you truly have a globalized game, so someone (either the teams or the event organizers) has to pay a small fortune on plane tickets. You also need a lot of fairly new computers as you could run into graphic lag if you use PC with bad graphic cards, and you need a top of the notch internet connection as you depend on it to play the game.
On the other hand, revenues are scarce. For a long time, the only sources of revenue were the entry fees of viewers (non existent on a closed door event as this one) and the ad revenue. Problem is the ad revenue is way smaller most people believe it is. Most events end up with red numbers, and huge event organizers are losing money. MLG only survives thanks to the gullibility of some venture capitalists that poured millions on a "booming" industry, but you can't ride for free forever. It is fair for them to try to cut their losses.
Sadly, MLG is fucked over. The ppp system works for sports events because they have a total monopoly on some sports. In boxing or in the UFC, you either pay or you don't see anything. In Starcraft, a 1000 euros monthly cup as the MSI/Millenium tournament has a roster as good as MLG. This business model is bound to fail too.
Bye bye SC2, it was nice knowing you. people ought to not use the word bubble when they have no idea what they're talking about. Also you provide alot of speculation with no citation whatsoever. MLG has been running for 10+ years, I doubt their previous ad-based model was constantly putting them in the red. Companies don't operate, even expand, on the basis of being red for so many years. So much for your speculations This isn't a case of "cutting your loses", its about attempting to use a new business model to achieve more profit. Simple as that. Nobody is dumb enough to "cut your loses" by paying tens of thousands of dollars ahead of time to fly everyone around the globe to NY, in addition to hire a huge list of expensive casters. Its an experimentation at the new model I'm going to show you something, it is called a SEC form: http://www.sec.gov/Archives/edgar/data/1371551/000137155111000001/xslFormDX01/primary_doc.xmlYou will see it was filled by MLG and they are selling debt + options on their business. They sold 3,1 millions. They have done this several times on the last years: You just need to search the SEC archives. http://www.sec.gov/cgi-bin/browse-edgar?company=Major League Gaming Inc.&match=&CIK=&filenum=&State=&Country=&SIC=&owner=exclude&Find=Find Companies&action=getcompanyThe MLG costs a lot of money. It's a super expensive operation and they've been fairly successful at securing venture capital, but it seems they are burning money to exist. Everybody here is so delusional about the financial state of the "e-sports" scene. Not all of us. The e-sports audience is one of the most difficult audiences to monetize. It's full of people who are used to pirating / not paying for things and/or don't have credit cards / don't have much money. Really tough. It's not even so much that. It's that when you charge above and beyond what others are charging (or not charging) for similar events you're not going to get a lot of bites. I don't doubt there's some people that don't get it, but I'd say the majority probably realize this is an expensive business to run. That said, you can't just start gouging people because you need money and expect them to pay up. But everyone is losing money. The lesson here is that ESPORTS just isn't profitable. You either give it away undervalued like everyone else, or charge what it costs and get labeled "gouging". Lose/Lose. If 20 bucks for a weekend event is what it's ultimately going to cost then I'm afraid this business just isn't going to last very long unless someone can come up with a sustainable model. With the abundance of tournaments and free viewing it's going to be hard to convince anyone to drop 20 dollars on a weekend event. I think the point was that there won't be any free viewing events in the future, as they're all losing money. If no one is willing to pay to watch, then the ESPORTS scene is doomed.
If this is the case, then all tournaments/lans will charge. If that happens, people will select where they get the best bang for their buck. Will MLG be the one? I'll be over at GSL probably.
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On February 15 2012 05:47 Vadrigar wrote:Show nested quote +James Harding @follow2GD
DreamHack are a sustainable business without charging pay per view. I think MLG might be trying to do something ahead of its time 2GD was one of the guys running DreamHack. So I'm not buying this shit that all major events are losing money. I can live without MLG. DreamHack twice a year+ IEM+ Assembly twice a year and GSL is more than enough for me. May be the problem is that NA has 5 pro players.
Dreamhack is the biggest LAN in the world, that opens up a whole lot of doors. They also have what I'm guessing must be simply better sponsorship deals since they rented a god damned hockey arena for a day.
I also don't buy that all organisations are losing money, there's no reason to do this for so long if it was. WCG has been around for forever, so has ESL and DH. Like 2GD is saying, some know how to make money and some just don't, survival of the fittest I guess. I think people are thinking about this the wrong way like "if MLG who gets all dem cool koreans over fail then everyone must fail" when that is a big part of the problem. Make more with less basically.
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On February 15 2012 06:05 drgoats wrote:Show nested quote +On February 15 2012 06:00 m4inbrain wrote:On February 15 2012 05:50 Adreme wrote:On February 15 2012 05:49 m4inbrain wrote:On February 15 2012 05:44 Kralic wrote:On February 15 2012 05:43 m4inbrain wrote:On February 15 2012 05:34 Chill wrote:On February 15 2012 05:25 m4inbrain wrote:On February 15 2012 05:22 Chill wrote:On February 15 2012 05:19 Chicane wrote:
[quote]
Actually all the big tournaments profit. Link to their balance sheets please. Isnt the fact that theyre still around "evidence" enough? Do you really think a tournament will survive if they lose money for 10 years straight? Do you actually think an organisation would even consider to rescue a "business" which paints red numbers for 10 years? Well. I actually do believe that they are in the blacks, without seeing their balance sheets. Again, the fact that theyre still here is proof enough. Edit: although it was a joke, i stick to my opinion. A tournament that would make consistenly a - at the end of the year wouldnt be around for so long. Look at history. The majority of major ESPORTS companies have been farces based on non-payment and then a quick declaration of bankruptcy. It's easy to get some initial investments, take a loss, and then hope that the numbers stack up to make it sustainable. MLG trimmed all their fat, cut all their extra production, fired all the writers, and started charging PPV on the stream. If that doesn't ring bells in your ears then I don't know what will. I don't think this is a case of a greed, I think it's a desire to actually tun a profit. MLG trimmed all their fat, so thats why they hold their tournament in NYC? Because their offices and studio where this tournament will be taking place are there? So having a studio in one of the most expensive cities in the world is smart then, yes? "Cant be trimmed down, we have to have a more expensive tournament, because we have our studio in the most expensive town in the western hemisphere - and thats smart.". Sorry. I dont want to sound insulting, but that actually is completely no argument, at all. Even more so, it feels a bit stupid to me, and "two-faced" (dont know the right word in english). People have business offices in New York because it is strategically a smart business decision to do so. Yeah. Sounds really smart to me, especially if you claim to do red numbers all the time (which may be true - i dont believe it, but that doesnt matter). Maybe stop doing "smart" business decisions, and start doing "reasonable". You see, it maybe good for your image to have an office in big apple, but its bad for your image when you start to look two-faced. If you dont make money, you should not be in new york, its that easy. Cut your expenses, even if that means to give up the "strategically smart" office in NY. Which screws you and your fans over, if you think about it (thats why the pass is that expensive, Hotel and stuff, studiorent etc - it could be so much cheaper). Actually moving your entire business and its employees is an incredible expense to take on.
It is, it is. But sometimes its the smarter decision in the long run. Easy as that. It.. Well, i dont know the english word (amortisieren in german), it will "pay off" in the long run. Now theyre paying for a big office for about how many years? And didnt do good. It wont get cheaper.
edit: but maybe i miss something, feel free to explain to me why an office in NYC is so important for MLG(!). And i mean that, could be that im missing something.
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On February 15 2012 03:01 Klipsys wrote:
I can't fathom the immatureness of this community
I hate doing this, but some of you need to grow the fuck up and move out of the basement. There literally isn't anything in this world that you just get for free. 3 years ago MLG didn’t even have starcraft, and now they practically exists because of it. Now they want to make some money for all of this effort, you know, like the REST OF THE GOD DAMN WORLD DOES, and you people are crying like little girls
It's DISGUSTING. GROW UP AND GET A JOB IF YOU WANT TO BE INCLUDED IN ADULT ACTIVTITES
User was temp banned for this post.
USA USA USA !
hilarious
User was warned for this post
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On February 15 2012 06:09 m4inbrain wrote:Show nested quote +On February 15 2012 06:05 drgoats wrote:On February 15 2012 06:00 m4inbrain wrote:On February 15 2012 05:50 Adreme wrote:On February 15 2012 05:49 m4inbrain wrote:On February 15 2012 05:44 Kralic wrote:On February 15 2012 05:43 m4inbrain wrote:On February 15 2012 05:34 Chill wrote:On February 15 2012 05:25 m4inbrain wrote:On February 15 2012 05:22 Chill wrote:
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Link to their balance sheets please. Isnt the fact that theyre still around "evidence" enough? Do you really think a tournament will survive if they lose money for 10 years straight? Do you actually think an organisation would even consider to rescue a "business" which paints red numbers for 10 years? Well. I actually do believe that they are in the blacks, without seeing their balance sheets. Again, the fact that theyre still here is proof enough. Edit: although it was a joke, i stick to my opinion. A tournament that would make consistenly a - at the end of the year wouldnt be around for so long. Look at history. The majority of major ESPORTS companies have been farces based on non-payment and then a quick declaration of bankruptcy. It's easy to get some initial investments, take a loss, and then hope that the numbers stack up to make it sustainable. MLG trimmed all their fat, cut all their extra production, fired all the writers, and started charging PPV on the stream. If that doesn't ring bells in your ears then I don't know what will. I don't think this is a case of a greed, I think it's a desire to actually tun a profit. MLG trimmed all their fat, so thats why they hold their tournament in NYC? Because their offices and studio where this tournament will be taking place are there? So having a studio in one of the most expensive cities in the world is smart then, yes? "Cant be trimmed down, we have to have a more expensive tournament, because we have our studio in the most expensive town in the western hemisphere - and thats smart.". Sorry. I dont want to sound insulting, but that actually is completely no argument, at all. Even more so, it feels a bit stupid to me, and "two-faced" (dont know the right word in english). People have business offices in New York because it is strategically a smart business decision to do so. Yeah. Sounds really smart to me, especially if you claim to do red numbers all the time (which may be true - i dont believe it, but that doesnt matter). Maybe stop doing "smart" business decisions, and start doing "reasonable". You see, it maybe good for your image to have an office in big apple, but its bad for your image when you start to look two-faced. If you dont make money, you should not be in new york, its that easy. Cut your expenses, even if that means to give up the "strategically smart" office in NY. Which screws you and your fans over, if you think about it (thats why the pass is that expensive, Hotel and stuff, studiorent etc - it could be so much cheaper). Actually moving your entire business and its employees is an incredible expense to take on. It is, it is. But sometimes its the smarter decision in the long run. Easy as that. It.. Well, i dont know the english word (amortisieren in german), it will "pay off" in the long run. Now theyre paying for a big office for about how many years? And didnt do good. It wont get cheaper.
Additionally, something else that pays off in the long-run is getting out of the eSports industry. I mean, if you really want to look at it that way, there are just so many better options into which to invest your money.
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On February 15 2012 05:51 legaton wrote:
So, i checked all the SEC fillings and this is the money invested in MLG
2011-11-23 - debt + option -2 500 000 dollars
2011-08-12 - debt + option - 3 083 328
2010-12-30 - equity - 3 333 353 dollars
2009-08-31 - equity - 3 499 995 dollars
2008-12-31 - equity + option - 7 500 000 dollars
2007-06-18 - equity - 1 400 000 dollars
2006-11-20 - equity - 25 000 000 dollars
2006-07-31 - equity - 10 000 000 dollars
As you can see, in 6 years and a half, they have filled for a small fortune. I think this kind of numbers give a better idea on how expensive an operation like MLG is.
I'm not saying you should pay 20 dollars per event, but it is clear to me that have a desperate need to monetize the scene.
My informed point of view is you must be mentally challenged to invest any money on e-sports (except, maybe, for a small community based operation like TL, but without expecting any huge ROI). But well, good luck to MLG.
Finally, some fact in this thread.
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On February 15 2012 06:04 Chill wrote:Show nested quote +On February 15 2012 06:01 Quenchiest wrote:On February 15 2012 05:52 Chill wrote:On February 15 2012 05:38 Quenchiest wrote:On February 15 2012 05:34 cz wrote:On February 15 2012 05:33 legaton wrote:On February 15 2012 05:04 iky43210 wrote:On February 15 2012 04:19 legaton wrote:
Well, i guess we are just hearing the bubble pop
Today's business model is just not sustainable. Costs in the e-sports industry and specially in SC2 are extremely high. To run a LAN, you must face a huge investment for the location of the hall (several thousands dollars, if not more, for an MLG sized event). But SC2 LAN are specially expensive because you truly have a globalized game, so someone (either the teams or the event organizers) has to pay a small fortune on plane tickets. You also need a lot of fairly new computers as you could run into graphic lag if you use PC with bad graphic cards, and you need a top of the notch internet connection as you depend on it to play the game.
On the other hand, revenues are scarce. For a long time, the only sources of revenue were the entry fees of viewers (non existent on a closed door event as this one) and the ad revenue. Problem is the ad revenue is way smaller most people believe it is. Most events end up with red numbers, and huge event organizers are losing money. MLG only survives thanks to the gullibility of some venture capitalists that poured millions on a "booming" industry, but you can't ride for free forever. It is fair for them to try to cut their losses.
Sadly, MLG is fucked over. The ppp system works for sports events because they have a total monopoly on some sports. In boxing or in the UFC, you either pay or you don't see anything. In Starcraft, a 1000 euros monthly cup as the MSI/Millenium tournament has a roster as good as MLG. This business model is bound to fail too.
Bye bye SC2, it was nice knowing you. people ought to not use the word bubble when they have no idea what they're talking about. Also you provide alot of speculation with no citation whatsoever. MLG has been running for 10+ years, I doubt their previous ad-based model was constantly putting them in the red. Companies don't operate, even expand, on the basis of being red for so many years. So much for your speculations This isn't a case of "cutting your loses", its about attempting to use a new business model to achieve more profit. Simple as that. Nobody is dumb enough to "cut your loses" by paying tens of thousands of dollars ahead of time to fly everyone around the globe to NY, in addition to hire a huge list of expensive casters. Its an experimentation at the new model I'm going to show you something, it is called a SEC form: http://www.sec.gov/Archives/edgar/data/1371551/000137155111000001/xslFormDX01/primary_doc.xmlYou will see it was filled by MLG and they are selling debt + options on their business. They sold 3,1 millions. They have done this several times on the last years: You just need to search the SEC archives. http://www.sec.gov/cgi-bin/browse-edgar?company=Major League Gaming Inc.&match=&CIK=&filenum=&State=&Country=&SIC=&owner=exclude&Find=Find Companies&action=getcompanyThe MLG costs a lot of money. It's a super expensive operation and they've been fairly successful at securing venture capital, but it seems they are burning money to exist. Everybody here is so delusional about the financial state of the "e-sports" scene. Not all of us. The e-sports audience is one of the most difficult audiences to monetize. It's full of people who are used to pirating / not paying for things and/or don't have credit cards / don't have much money. Really tough. It's not even so much that. It's that when you charge above and beyond what others are charging (or not charging) for similar events you're not going to get a lot of bites. I don't doubt there's some people that don't get it, but I'd say the majority probably realize this is an expensive business to run. That said, you can't just start gouging people because you need money and expect them to pay up. But everyone is losing money. The lesson here is that ESPORTS just isn't profitable. You either give it away undervalued like everyone else, or charge what it costs and get labeled "gouging". Lose/Lose. If 20 bucks for a weekend event is what it's ultimately going to cost then I'm afraid this business just isn't going to last very long unless someone can come up with a sustainable model. With the abundance of tournaments and free viewing it's going to be hard to convince anyone to drop 20 dollars on a weekend event. I agree. As I've said, I believe these companies undercut each other trying to give more and more value until nothing is sustainable anymore. It's become a game of chicken - bleed money until everyone else dies and then start charging what it really costs because you're now the monopoly.
tbh I don`t mind if some "players" in the industry die. Demand and supply works for everything and if there is no demand for PPV SC2 tournaments, those who try it will fail. We will see (very soon) if that`s the case.
I am 100% sure this industry has to work with sponsors or it wont work at all. Sure, extra cash can come from premium subscribtions or merchandise, but the larger part will always be paid from sponsors. If this limit the growth of eSport, I`m cool with it, but I`m sure this won`t kill it.
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That tweet was the last straw. Basically, "we sold you guys this thing and then we realized we hadn't charged you enough, so we renamed half of it so we can sell it to you again." That's just utterly disrespectful. If gold membership had simply been $80 or thereabouts from the start, I honestly would have paid for it without complaint; MLG weekends have been a really cool thing for my family. My wife's and my friends come over, we drink beers, we play games inbetween matches, it's a sweet deal. And I can certainly afford it.
But this is simply bait and switch. It's unethical to treat people this way who paid for a gold membership and excuse it by alternatingly claiming that we gold members are still getting what we paid for (as Sundance argued to me on Twitter) and that someone in his organization screwed up and included too much for too little in the gold package, so they're just taking it away from us.
I understand that these events have to generate more revenue to turn a profit, and I'm more than happy to put up my dollars (well, Euro) to support them, but I don't appreciate doing so only to have the organizations I support turn around and treat me like a shmuck. MLG has managed to piss away a lot of the good will it had with me up to this point by doing this, and I won't be giving them any more of my money. I pay not only to support E-Sports as a whole, but to support those organizations that treat us with the respect that I associate with the SC2 community, and is one of the biggest reasons that I'm part of the community in the first place.
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2012 is going to be the year where the sustainability of ESPORTS business models will be tested. I have a feeling MLG will not survive this test.
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On February 15 2012 05:51 legaton wrote:
So, i checked all the SEC fillings and this is the money invested in MLG
2011-11-23 - debt + option -2 500 000 dollars
2011-08-12 - debt + option - 3 083 328
2010-12-30 - equity - 3 333 353 dollars
2009-08-31 - equity - 3 499 995 dollars
2008-12-31 - equity + option - 7 500 000 dollars
2007-06-18 - equity - 1 400 000 dollars
2006-11-20 - equity - 25 000 000 dollars
2006-07-31 - equity - 10 000 000 dollars
As you can see, in 6 years and a half, they have filled for a small fortune. I think this kind of numbers give a better idea on how expensive an operation like MLG is.
I'm not saying you should pay 20 dollars per event, but it is clear to me that have a desperate need to monetize the scene.
My informed point of view is you must be mentally challenged to invest any money on e-sports (except, maybe, for a small community based operation like TL, but without expecting any huge ROI). But well, good luck to MLG.
Extremely insightful post right here.
I know a lot of people are using the argument of why are tournaments popping up throughout 2011 as an symptom of its success and profitability, but people need to wait 5 years before making any judgement about SC2's ability to profit; because when people begin to invest it's not when the market is already turning a profit, but when people think there's potential to turn a profit.
That said, I really think investing in Esports in the first place is an insane gamble. It could potentially pay off, but IMO the risks outweigh much of any potential profits. Lots of other less risky ventures to invest in that have just the same potential profits.
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On February 15 2012 06:12 AmericanUmlaut wrote:
That tweet was the last straw. Basically, "we sold you guys this thing and then we realized we hadn't charged you enough, so we renamed half of it so we can sell it to you again." That's just utterly disrespectful. If gold membership had simply been $80 or thereabouts from the start, I honestly would have paid for it without complaint; MLG weekends have been a really cool thing for my family. My wife's and my friends come over, we drink beers, we play games inbetween matches, it's a sweet deal. And I can certainly afford it.
But this is simply bait and switch. It's unethical to treat people this way who paid for a gold membership and excuse it by alternatingly claiming that we gold members are still getting what we paid for (as Sundance argued to me on Twitter) and that someone in his organization screwed up and included too much for too little in the gold package, so they're just taking it away from us.
I understand that these events have to generate more revenue to turn a profit, and I'm more than happy to put up my dollars (well, Euro) to support them, but I don't appreciate doing so only to have the organizations I support turn around and treat me like a shmuck. MLG has managed to piss away a lot of the good will it had with me up to this point by doing this, and I won't be giving them any more of my money. I pay not only to support E-Sports as a whole, but to support those organizations that treat us with the respect that I associate with the SC2 community, and is one of the biggest reasons that I'm part of the community in the first place.
Bait & switch is illegal, furthermore, although it would probably be difficult to prove that this is in fact fraud since MLG probably has a legal clause stating that their packages are subject to change based on fiscal cycles or something. Personally, I think it probably is a functional bait&switch, but that's merely my opinion and wouldn't hold up in any court.
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Ill be watching Assembly for a number of reasons
1. Assembly is the same weekend. While the quality of games at MLG will probably be better Assembly is $20 less and should still be awesome
2. I checked out the demo and the stream looks like crap. Much smaller tournaments like EWM have streams that look much better
3. In my opinion MLG provides a mediocre viewer experience, while the games are usually great I feel that the amount of downtime is too great
4. As many other people have pointed out $20 is too much for a 3 day event
5. I don't like MLGs attitude about the whole thing. The way MLG is treating gold members is ridiculous. Basically they said oops and gave all the gold members the finger. I also feel that the last few lines of Sundance's explanation (basically saying this is a required step for esports and you better pay otherwise your killing esports) are too pushy.
6. I can pay 20 dollars for a weekend of entertainment but if every big tournament follows the PPV model I'm not rich enough to fork over 20 dollars for every tournament I want to watch.
6. Finally ( and this point may be bullshit because i don't really know anything about business) I wonder whether PPV is the right way to go. I feel that PPV may inhibit growth by scaring away new viewrs
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According to this site, dreamhack lost 310 000 SEK (~34 000 €) during 2009, and then 2 295 000 SEK ( 250 000 €) during 2010. They don't have any numbers for 2011 yet.
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EPT
