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Canada8989 Posts
On June 15 2023 11:49 Monochromatic wrote:
Under the current model Esports will never be profitable. Esports is only feasible when the game company has no involvement in the scene - i.e. Korean Brood War or grassroots Melee.
The minute a gaming company gets involved the scene dies. Sure, there's tournament fees, but the real killer is that 100% of control of the product belongs to the gaming company. You cannot create a lasting business when you are forced to be subservient to a company with different core interests.
I mean, neither Melee nor Brood War proved nearly has profitable nor solid in the long term as Lol, CSGO or DOTA 2 so IDK if we can say that.
Lol is now older than BW was at the Kespa switch and is still the most popular esport title in the world. Developer backed esport seemed to be the most viable for large esport, even if it's not for third party like team and organisers.
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On June 15 2023 11:49 Monochromatic wrote:
Under the current model Esports will never be profitable. Esports is only feasible when the game company has no involvement in the scene - i.e. Korean Brood War or grassroots Melee.
The minute a gaming company gets involved the scene dies. Sure, there's tournament fees, but the real killer is that 100% of control of the product belongs to the gaming company. You cannot create a lasting business when you are forced to be subservient to a company with different core interests.
Grass roots Melee is absolutely notorious for being completely impoverished. And I think you absoultely need publisher support nowadays because your game is probably not going to get picked up for a LAN unless it does.
Compare the Quake scene to CS:GO. Or Melty Blood to Street Fighter.
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I'd wager no traditional sports team is really profitable either.
In germany there's drama on a regular about football/soccer clubs desperately needing sponsorships because otherwise they can't even afford the fees to stay in the top two leagues. And that's THE sport in this country. Given what absurd sums are paid for the top athletes in the world there's no way that would be feasible without insane amounts of money pumped into it by big corporations or other actors for the advertisement and prestige values.
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On June 16 2023 02:18 lechatnoir wrote:
I'd wager no traditional sports team is really profitable either.
In germany there's drama on a regular about football/soccer clubs desperately needing sponsorships because otherwise they can't even afford the fees to stay in the top two leagues. And that's THE sport in this country. Given what absurd sums are paid for the top athletes in the world there's no way that would be feasible without insane amounts of money pumped into it by big corporations or other actors for the advertisement and prestige values.
I can't speak for European teams, but in America sports is BIG business and some of the major teams in the American scene are worth billions. In fact I think the starting bid for an NBA team is around 1 to 1.5 billion.
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On June 16 2023 02:18 lechatnoir wrote:
I'd wager no traditional sports team is really profitable either.
In germany there's drama on a regular about football/soccer clubs desperately needing sponsorships because otherwise they can't even afford the fees to stay in the top two leagues. And that's THE sport in this country. Given what absurd sums are paid for the top athletes in the world there's no way that would be feasible without insane amounts of money pumped into it by big corporations or other actors for the advertisement and prestige values.
Sports teams in the US are all highly valued and probably profitable or at least so well invested in themselves that when it comes time to sell the owners will make a huge buck.
Comparing that to soccer clubs in EU you'd have to be more comparable to like minor league baseball in the US.
Meanwhile worldwide golf and tennis seem to do well. Asian baseball seems to do well.
The big soccer events are watched, but it isn't the same and because there are so many people pulling at the money. Also, the way soccer does it's big event is weird isn't it? Doesn't the UK put together several teams? And then a specific club wins the bid, but they're leaving behind better players IIRC? They keep team cohesion, but don't necessarily have all the best people per position.
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Northern Ireland25322 Posts
On June 16 2023 02:18 lechatnoir wrote:
I'd wager no traditional sports team is really profitable either.
In germany there's drama on a regular about football/soccer clubs desperately needing sponsorships because otherwise they can't even afford the fees to stay in the top two leagues. And that's THE sport in this country. Given what absurd sums are paid for the top athletes in the world there's no way that would be feasible without insane amounts of money pumped into it by big corporations or other actors for the advertisement and prestige values.
There’s generally a cyclical process in at least a more open wider market that isn’t really controlled, like European football.
You’re in the business of glory ultimately. Every extra injection of cash that should make clubs profitable and sustainable, ultimately gets swallowed up in the subsequent wage and transfer fee inflation.
When that inflation occurs, you have to move with the shifting tide or you’ll sink. Fans want their team to be competitive, not financially prudent and turning a profit while contentedly slipping down tables. Until their club crashes and burns chasing glory, in which case fans will bemoan the overspending and pretend they didn’t demand it.
eSports has the same problem, but with a way reduced direct cash flow.
People generally don’t pay out of pocket to watch these big tournaments, the big football packages here are pretty bloody expensive but people do buy em. I’d wager the eSports merch market isn’t what it could be either, especially once you get to older demographics, which in the case of something like Starcraft probably is the majority.
Add to that broadcasts are a lot less attractive to advertisers with a tech savvy demographic, many of whom will just block ads anyway.
What can be profitable is being a top level streaming personality or what have you. Something about that more personal connection/parasocial relationship leaves people way more inclined to donate and sub to people, in a way that leagues and teams haven’t
And it seems at least some appetite is there, if we look at GSL trying their hand at crowdfunding for a bit, although I’m not sure how effective that is with a more healthy scene and not the imminent threat of a scene you love declining/ending
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On June 16 2023 03:36 NoobSkills wrote:Show nested quote +On June 16 2023 02:18 lechatnoir wrote:
I'd wager no traditional sports team is really profitable either.
In germany there's drama on a regular about football/soccer clubs desperately needing sponsorships because otherwise they can't even afford the fees to stay in the top two leagues. And that's THE sport in this country. Given what absurd sums are paid for the top athletes in the world there's no way that would be feasible without insane amounts of money pumped into it by big corporations or other actors for the advertisement and prestige values. Sports teams in the US are all highly valued and probably profitable or at least so well invested in themselves that when it comes time to sell the owners will make a huge buck. Comparing that to soccer clubs in EU you'd have to be more comparable to like minor league baseball in the US. Meanwhile worldwide golf and tennis seem to do well. Asian baseball seems to do well. The big soccer events are watched, but it isn't the same and because there are so many people pulling at the money. Also, the way soccer does it's big event is weird isn't it? Doesn't the UK put together several teams? And then a specific club wins the bid, but they're leaving behind better players IIRC? They keep team cohesion, but don't necessarily have all the best people per position.
https://en.wikipedia.org/wiki/Forbes_list_of_the_most_valuable_sports_teams
It's definetly above minor league abseball.  don't underestimate how the world loves soccer.
"Doesn't the UK put together several teams?"
Of course - it's made up of seperate countries that all field their own national teams.
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Also, this seems to be a relatively new phenomena. Before 2016 Real Madrid was the most valuable team in the World, and before that Manchester Untited, but now there are 16 American teams above them. It seems that in recent years the perceived value of American sports teams skyrocketed (or European ones plummeted).
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On June 15 2023 03:29 Nakajin wrote:Show nested quote +On June 15 2023 02:15 Captain Peabody wrote:
I'm a bit confused by the framing, as I understand it ESPORTs teams don't exist to "make money" or be profitable in the immediate sense. They're almost entirely advertising-driven entities, meaning that they're justified financially not by the team itself making money but by serving as effective promotion for the brands and corporations that sponsor them.
For these corporations, which are almost always going to be mega-corporations with lots of money to throw around, they're entirely a loss in terms of immediate bottom-line, but are a few line items in a much larger budgeting for advertising/outreach efforts that, while hard to quantify, they believe ultimately lead to more sales. I'm not sure there was ever a time in BW or SC2 when ESPORTs teams themselves were run as enterprises that were supposed to directly generate profit for investors and owners--the idea seems highly counterintuitive, though maybe someone can point to examples?
Now, it's very possible that there's a growing mismatch between what advertisers are willing to pay to teams and what it actually costs teams to operate, leading to a shortfall that has to be made up by passionate managers and financial backers and fans, and to a small extent even by passion and fandom among corporate investors. If that's true, though, the problem isn't so much with teams failing to be profitable enterprises in the business sense as with corporate advertising budgeting and viewer numbers and team-running costs and how they fit together or don't.
In the long run, the question is really how large corporations (including game studios) estimate the value of ESPORTs investment for advertising and promotion and therefore how it gets budgeted for, and only secondarily how much money it actually costs to run an ESPORTs team. I will say there are reasons why a LoL team would be more expensive than a SC2 team, though. I'd be curious about the financial scheme of Kespa BW team and Korean lol. Since they opperated in the Televisual market, rather than Internet broadcasting my guess is that maybe they were profitable? Or at least they could actually make money "on their own" by selling broadcasting right to TV channel that then make money through both cable TV subscription as well as TV avertising. I don't know if TV rights were ever good enough to make an esport team profitable, but that would have been a much more traditionnal way for team to make money. ( I'm vaguely aware there was a lot of legal controversy between Kespa and Blizz on who had the broadcasting right to BW, but I never really took the time to dive into it). But yea, outside if that it's the age-old problem that we expect org, esports and teams to be profitable while never having to pay for anything.
BW was lot cheaper than running pro sports team but way more exposure to younger audience to promote companies back then
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On June 16 2023 04:18 lechatnoir wrote:Show nested quote +On June 16 2023 03:36 NoobSkills wrote:On June 16 2023 02:18 lechatnoir wrote:
I'd wager no traditional sports team is really profitable either.
In germany there's drama on a regular about football/soccer clubs desperately needing sponsorships because otherwise they can't even afford the fees to stay in the top two leagues. And that's THE sport in this country. Given what absurd sums are paid for the top athletes in the world there's no way that would be feasible without insane amounts of money pumped into it by big corporations or other actors for the advertisement and prestige values. Sports teams in the US are all highly valued and probably profitable or at least so well invested in themselves that when it comes time to sell the owners will make a huge buck. Comparing that to soccer clubs in EU you'd have to be more comparable to like minor league baseball in the US. Meanwhile worldwide golf and tennis seem to do well. Asian baseball seems to do well. The big soccer events are watched, but it isn't the same and because there are so many people pulling at the money. Also, the way soccer does it's big event is weird isn't it? Doesn't the UK put together several teams? And then a specific club wins the bid, but they're leaving behind better players IIRC? They keep team cohesion, but don't necessarily have all the best people per position. https://en.wikipedia.org/wiki/Forbes_list_of_the_most_valuable_sports_teamsIt's definetly above minor league abseball. don't underestimate how the world loves soccer. "Doesn't the UK put together several teams?" Of course - it's made up of seperate countries that all field their own national teams.
The world loves soccer I'm not doubting that, but it isn't the same. World cup is every 4 years. You have certainly some major teams on that forbes list, but they routinely compete against lesser teams in smaller cups. Your largest teams have way more value than a minor league baseball team, but your talent is all over the place, and so is your competition. You might do your own EU cup, but then you don't have the world talent at the show. Man U might go for the world cup, but you wouldn't even have a team comprised of all of the very best talent that EU has to offer. Then your specific teams going to the CUP might be used to playing with a player from another nation right? They can't play for you then right? It is just a mess. Also the governing body is trash.
I made my point about teams poorly I think. England has a few teams right? So if you pretend that each team had 3 great players the rest are mid. One team goes forward, but you're leaving behind many great players. And a team who has a foreign player if they don't meet the standards might not be able to play for their team in the world cup iirc. So you could wind up with 2 of the best 9 players available in your country representing you.
Now obviously this is written by someone who doesn't understand every nuance of world soccer. But it is so chaotic who could? You can go from one event where a 5 billion dollar team crushes a minor league team, to where that same team is losing in the world cup to a poor team comprised of better players because they put 100% of their best talent forward on one team that has been playing together.
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Canada8989 Posts
On June 16 2023 05:08 NoobSkills wrote:Show nested quote +On June 16 2023 04:18 lechatnoir wrote:On June 16 2023 03:36 NoobSkills wrote:On June 16 2023 02:18 lechatnoir wrote:
I'd wager no traditional sports team is really profitable either.
In germany there's drama on a regular about football/soccer clubs desperately needing sponsorships because otherwise they can't even afford the fees to stay in the top two leagues. And that's THE sport in this country. Given what absurd sums are paid for the top athletes in the world there's no way that would be feasible without insane amounts of money pumped into it by big corporations or other actors for the advertisement and prestige values. Sports teams in the US are all highly valued and probably profitable or at least so well invested in themselves that when it comes time to sell the owners will make a huge buck. Comparing that to soccer clubs in EU you'd have to be more comparable to like minor league baseball in the US. Meanwhile worldwide golf and tennis seem to do well. Asian baseball seems to do well. The big soccer events are watched, but it isn't the same and because there are so many people pulling at the money. Also, the way soccer does it's big event is weird isn't it? Doesn't the UK put together several teams? And then a specific club wins the bid, but they're leaving behind better players IIRC? They keep team cohesion, but don't necessarily have all the best people per position. https://en.wikipedia.org/wiki/Forbes_list_of_the_most_valuable_sports_teamsIt's definetly above minor league abseball. don't underestimate how the world loves soccer. "Doesn't the UK put together several teams?" Of course - it's made up of seperate countries that all field their own national teams. The world loves soccer I'm not doubting that, but it isn't the same. World cup is every 4 years. You have certainly some major teams on that forbes list, but they routinely compete against lesser teams in smaller cups. Your largest teams have way more value than a minor league baseball team, but your talent is all over the place, and so is your competition. You might do your own EU cup, but then you don't have the world talent at the show. Man U might go for the world cup, but you wouldn't even have a team comprised of all of the very best talent that EU has to offer. Then your specific teams going to the CUP might be used to playing with a player from another nation right? They can't play for you then right? It is just a mess. Also the governing body is trash. I made my point about teams poorly I think. England has a few teams right? So if you pretend that each team had 3 great players the rest are mid. One team goes forward, but you're leaving behind many great players. And a team who has a foreign player if they don't meet the standards might not be able to play for their team in the world cup iirc. So you could wind up with 2 of the best 9 players available in your country representing you. Now obviously this is written by someone who doesn't understand every nuance of world soccer. But it is so chaotic who could? You can go from one event where a 5 billion dollar team crushes a minor league team, to where that same team is losing in the world cup to a poor team comprised of better players because they put 100% of their best talent forward on one team that has been playing together.
Obviously we have all done our share of talking about things we don't really understand on the Internet, god knows I have, but man, that's not how any of it work.
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Northern Ireland25322 Posts
On June 16 2023 04:13 lechatnoir wrote:
Solid answer, Wombat!
Why thank you sir, I have the odd moment!
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Yeah, that was a funny post, mixing up club and national teams like a boss. Look up the major ones, then try again!
It is interesting that the NFL is WAY more regulated than any Soccer League, with healthy tings like salary caps.
It is also really sad when soccer teams overspend and crash down the Leagues.
Soccer teams could easily have been sustainable businesses, but are not because of bullshit money infusions by rich businessmen wanting a hobby and sports washing. Christiano Ronaldo has sold out completely now, and is a hypeman for the Saudis now.
But reading this thread, inflated salaries is not the problem for E-sports, it is the lack of a core business model.
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On June 15 2023 05:41 [Phantom] wrote:
There is not a single esport scene that is profitable. Not a single one.
Esports turned out to be a bubble.
It can be profitable in some circumstances, it can be profitable for some teams for a while.
But if you start reading about the finances of esports. Lol, CSGO, DoTa, Overwatch, rocket league etc none of them are actually profitable.
It could be argued the publicity is worth it for the companies but even that is indirect
The very first thing they taught at business school to every student is that all businesses either get sold, or fold. Every single one. The point is to be profitable for a time.
The fact some teams are profitable for a time is no different than Circuit City or Radio Shack. To say those businesses were not successful is to misunderstand business.
And there tens of thousand thousands (millions?) of business that were never profitable. There are fields where only a few companies have been profitable (electric cars?). So that argument is hollow.
Esports Teams and Esports itself, can be, has been, and will be profitable in the future. But that doesn't mean everyone who gets into will make a profit.
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On June 16 2023 03:25 Vindicare605 wrote:Show nested quote +On June 16 2023 02:18 lechatnoir wrote:
I'd wager no traditional sports team is really profitable either.
In germany there's drama on a regular about football/soccer clubs desperately needing sponsorships because otherwise they can't even afford the fees to stay in the top two leagues. And that's THE sport in this country. Given what absurd sums are paid for the top athletes in the world there's no way that would be feasible without insane amounts of money pumped into it by big corporations or other actors for the advertisement and prestige values. I can't speak for European teams, but in America sports is BIG business and some of the major teams in the American scene are worth billions. In fact I think the starting bid for an NBA team is around 1 to 1.5 billion.
Berlusconi owned the most succesful European football team during his time and he dumped it once he was done with politics.
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To answer OP, there is a reason why all the biggest "esports" orgs are little more than talent organizations nowadays, hiring YouTubers and Twitch streamers, and requiring all of their esports players create content as well.
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On June 16 2023 02:18 lechatnoir wrote:
I'd wager no traditional sports team is really profitable either.
In germany there's drama on a regular about football/soccer clubs desperately needing sponsorships because otherwise they can't even afford the fees to stay in the top two leagues. And that's THE sport in this country. Given what absurd sums are paid for the top athletes in the world there's no way that would be feasible without insane amounts of money pumped into it by big corporations or other actors for the advertisement and prestige values.
and big government.
https://www.fieldofschemes.com/about/
the governments spend the money ... the corps reel in the profits.
i'm all for abolishing welfare. let's start with corporate welfare first.
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EPT
