I would like to start off just stating some things up front. In the rest of this post, and really anytime I mention e-sports or pro-gaming, I am aware that there is a great deal of debate about whether video games can really be a “sport.” Let’s forsake the idea of sports entirely and just consider pro-gaming and e-sports as one of a massive number of competitive activities. I will therefore be relating pro-gaming to several examples of competitive activities from traditional sports to competitive board and card games. There are many parallels between poker, bowling, X-Games-style extreme sports, and auto racing, just to name a few. With that in mind, consider the following…
Why has e-sports in the West floundered in relative obscurity, been mediocre financially at the best of times, and generally failed to become the “next big thing” that many people believed it would be? To examine this phenomenon we have to look at a series of different factors: the games, existing pro-level tournaments, and game culture both at home and abroad.
It seems that starting in the early 2000s a handful of groups stumbled upon an idea. Multiplayer gaming was really starting to take off as a medium and as with most multi-player/multi-user human experiences, competition reared its glorious head. Who was the best GoldenEye, Command and Conquer, Marvel vs. Capcom II player in your group of friends, your city, your state, or the whole country? As a way to turn this competitive spirit into profits, organizations like WCG, CPL, MLG, and Evolution Championship Series (Evo) began forming national and international leagues. The hope, it seems, was that these would gain momentum every year until gaming reached the mainstream and e-sports became like the X-Games or World Series of Poker, a novelty competitive event with national appeal. This steady rise, of course, did not happen. But why not?
Amongst the key factors are the social stigmas associated with video games, the public perception of gamers and gamer culture, and perceptions within the gaming community itself, just to name a few. Let’s start with social stigmas. The social stigmas stem from two main perceptions. The first is that video games are a toy, and nothing more. This is the fault of marketing. In 1985, Nintendo released the Robotic Operating Buddy; a move which analysts believe saved their company and possibly video gaming as we know it. R.O.B. made video games a toy, which opened them up to be sold at toy stores like Toys R Us and KB Toys, which in turn drew in the youth market. Millions, if not billions, of dollars in upfront revenue were generated and even more in long-term sales as players became hooked on their favorite systems, games, series, or just on gaming in general. In fact, without this infusion of young gamers, it’s not clear that gaming would be a dominant entertainment medium today. Unfortunately, this also inadvertently struck a blow to the legitimacy of gaming. If video games are a toy, then anyone who takes them seriously is not normal. Who practices Bop-It? You might be the world’s greatest Pocket Simon player but no one will care because Pocket Simon is just a toy, and toys aren’t to be taken seriously. This feeds into another social stigma. Who gets good at video games? Logically, people who play more get better, up to a point. The perception then, particularly in the late ‘90s and early ‘00s, was that people who got good were the shut-ins and the geeks whose lack of social lives were replaced with hours of gaming. And no one likes geeks. Geeks don’t even like geeks. This becomes obvious when browsing geek-focused Internet forums like 4chan’s /b/ or SomethingAwful’s message boards. So the popular opinion arises: those who get good at video games take a toy too seriously and are therefore weird, or play all the time because they have nothing else to do and are therefore geeks with no social lives.
One might question if this holds up in the modern gaming world, and it’s a perfectly reasonable point. Surely, now that gaming has become a global industry whose sales surpass even Hollywood movies, there are thousands, if not millions, more gamers than there were when these stigmas first developed. It’s true, there are many more gamers now than before, but the remnants of the stigmas still remain. Most people play video games to unwind or to spend time with their friends in light, friendly competition. If there is one person in the group who dominates every time, the others often begin to resent him. They dislike that he takes the game too seriously, they claim his tactics are cheap/unbalanced/unfair, they complain he is taking all of the fun out of the game, and so on. According to an article written by David Sirlin, a game balance specialist and former pro-gamer, entitled “Playing to Win,” this is what is known as “scrub” behavior. Rather than analyzing how they’re being beat, finding ways around it, and generally trying to get better at the game, they just throw their hands up and say unfair. The good player in the group is taking what the others think is a simple plaything and “removing the fun from it” by taking it too seriously. They see it as him applying game theory to Chutes and Ladders, whereas he sees it as chess where they haven’t bothered to learn the standard openers.
The geek stigma is much more subtle in its modern iteration. This is most obvious in online gaming interactions, but the idea bleeds into everyday perceptions. With the anonymity of the Internet, people just assume that the person beating them is only doing so because his lack of social life makes him play too much. Whether or not this is true, it’s just a way of rationalizing a loss to a superior player. This is all compounded by the fact that some games are socially acceptable to play regularly, and some games aren’t. It’s not really clear why, maybe it’s the demographic appeal, but games like Halo and its sequels, or Modern Warfare II and its sequels, are more socially acceptable to play than retro games or MMORPGs. Even when World of Warcraft had 11 million subscribers, most people were ashamed to admit in public that they played. So gamers are a massive community marked largely by self-loathing and shame. Obviously, this creates a lot of problems when trying to develop not only a competitive community, but also a spectator one as well.
Even with all of these difficulties with social stigmas, competitive video gaming leagues still exist. While WCG went through serious financial trouble that left it a husk of what it once was, and CPL has been functionally defunct since 2007, MLG and Evo still exist today, and newcomer IPL is making waves. With the exception of Evo, this was accomplished by abandoning the original competitive titles, largely first person shooters, in favor of real-time strategy games and battle arena (or DOTA-style) games. Evo has always focused on fighting games, but it too changed with the times, embracing new titles with potential (Street Fighter 4 and Marvel vs. Capcom III) over older, more established titles (Street Fighter 3rd Strike and Marvel vs. Capcom II). Embracing new titles has led to increased viewership for competitive gaming, as has the proliferation of streaming services like Twitch.tv and Own3d.tv. Despite this, competitive video gaming seems to struggle. Which raises the question: Why? And more pointedly: Why is there no money?
When it comes to generating money for any sporting event, or really any competitive event, there are basically two categories of revenue streams. There is viewership and there is sponsorship. Viewership is live audience ticket sales, TV or livestream viewing, live pay-per-view (PPV), or premium video on demand (VOD). While MLG flirted with pay-per-view streaming, they eventually abandoned the idea for reasons they won’t disclose. Judging by the data that has leaked, declining sales and negative PR motivated MLG to remove the pay-wall from their Arena content. Asian tournaments like Super Battle Opera for Capcom fighting games, GomTV Star-League for Starcraft II, and OGN presents Azubu “The Champions” for League of Legends have had success charging foreigners to access their content, but provide the same content for free domestically.
Take away options like PPV and premium VODs, and viewership revenue is down to tickets and broadcast advertising. Both of these are greatly hindered by the social stigmas associated with gaming. Simply put, tournaments struggle to get spectators to come to events. The reasons for this, and the tricks organizers use to cope, are enough to make a whole different post, so I’ll save that for another time. Suffice it to say, ticket sales have failed to be a reliable cash source. This then leaves broadcasting, either on television or through livestreaming. Gaming has appeared on television before, in the 1980s with the arcade boom and more recently with WCG Ultimate Gamer and ESPN’s cross-promotional show with EA featuring Madden NFL players. The results, in every case, were lackluster. Bowling and poker both started outside primetime and were able to build that into primetime-level attention, but e-sports was unable to make a similar transition. The 1980s TV broadcasts were hamstrung by trying to convert single player games into a dynamic multiplayer competition; more contemporary failures are most likely a result of networks’ not focusing on an established competitive scene such as Starcraft: Brood War, League of Legends, or any number of fighting games. They were also marked by a production value that seemed off, failing to strike a chord with either mainstream audiences or hardcore gamers. Either way, livestreaming remains the sole reliable source of viewership revenue. Unfortunately, livestreaming provides very little in returns. Unlike TV, which considers less than a million concurrent views a failure, livestreamed tournaments only reach a few hundred thousand for the largest events. This is compounded by the fact that the same thirty-second spot played online has a much lower CPM than the same ad on TV. The end result is very little money generated from viewers. Major shifts in culture towards legitimacy for competitive gaming would obviously change this, but I simply don’t see this coming any time soon.
So with viewership revenue too low to support the scene, the majority of money needs to come from sponsorships. Unsurprisingly, this is the current state of competitive gaming. Sponsorships fall into two types: endemic and non-endemic. Endemic sponsors are pulled from within the support industry for the sport itself. A perfect example of this is Brunswick’s involvement with professional bowling. Another example would be Signal and Billabong sponsoring professional snowboarders and surfers, respectively. In competitive gaming, it is commonly manufacturers of high-end gaming gear such as Mad Catz, Razor, and SteelSeries. A less obvious endemic sponsor would be clothing lines focused on a sports’ fan-base. Tap Out was built on mixed martial arts’ popularity, and helped grow both their brand and the scene by reinvesting with sponsorships. Competitive video gaming has some of these as well, like Broken Tier for fighting games and The Handsome Nerd for Starcraft II. The problem with endemic sponsors in e-sports is that their market reach is very small. The high quality of brands like Razor or Alienware comes at a price, and only a hardcore player will stomach that extra cost. Similarly, endemic clothing brands’ target markets are fans of the competitive scene, which remains a relatively small number of people.
In short, it is prudent for these endemic brands to spend part, or all, of their marketing budget on supporting competitive gaming, but there often just isn’t enough to go around. Many sponsorships amount to only some free gear and travel costs, leaving the players to win tournament purses in order to cover their living expenses. Only by attracting lots of sponsors can a team offer player salaries, with the added difficulty that those sponsors can’t be direct competitors. To make matters even worse, those same endemic brands are currently called upon to cover tournament expenses as well, from administrative overhead to prize pools.
To grow the scene and reach the levels of success enjoyed by niche sports like the X-Games or bowling, there needs to be enough money to support every aspect of the scene. This means enough money to support tournament organizers, broadcast personalities like casters and color commentators, sports journalists, coaches and team management, as well as a progression for pro players that supports the mid-tier talent and rising stars, as well as the very top performers, and provides options for players when they eventually retire. This requires an explosion in popularity for endemic brands, or more realistically, the courting of non-endemic sponsorships. Using racing as an example, whether it’s Formula 1 or NASCAR, professional teams are supported by a mixture of endemic and non-endemic sponsors. A team may be sponsored by an automotive brand like Pennzoil, and by a cereal brand like Kellogg’s. The problem with courting non-endemic sponsorships is that there are a lot of reasons to avoid tying a brand to competitive video gaming.
The biggest problem with competitive video gaming in the West is that there is basically no consistency in anything. While some games are long-lived, like Counterstrike 1.6, Quake, Starcraft: Brood War, or Super Smash Bros. Melee, these games have all been marginalized by new titles. Counterstrike and Quake are on their last legs in Germany, the only country that still has a serious competitive first person shooter scene, and Brood War and Melee have been largely supplanted by their sequels. There also isn’t consistent support by game designers for their titles after release. This is especially important for video games, which often rely on their makers to keep going. For example, League of Legends and Starcraft II need online servers, provided by the game’s publisher, to even play the game. In a slightly different situation, Nintendo actively chose to kill the underground competitive scene that had kept the Super Smash Brothers franchise relevant for seven or eight years after its release by making a much more casual friendly and shallowly designed sequel in Brawl. Then several years later, they announced the discontinuation of GameCube controllers, which are absolutely necessary to play Smash Brothers competitively. A big company looking to invest in a scene for the long-term is going to think twice if public interest in a game could fade in only a few years, or if a fickle game publisher could pull its support and ruin the competitive scene. Some developers with forward-thinking business plans like Blizzard and Riot have built their video games with competition in mind, and have even put their own marketing budget towards supporting competitive events, but it isn’t clear yet if this is sustainable.
The turnover for players is also very high. Players often start getting competitive in their late teens and retire by the time they reach their mid-twenties. This is partly because when they reach the age of adult responsibilities, they no longer have the time to practice and keep their game sharp, but it is also partly due to dulling reflexes, slowing hand speed, and the onset of repetitive stress injuries preventing older players from remaining competitive with younger, fresher talent. This presents a problem for sponsors if they chose to associate themselves with a player brand, since that brand might be out of the scene in only a handful of years. Starcraft II pros Manuel “Grubby” Schenkhuizen and Aleksey “White–Ra” Krupnyk are both individually sponsored, but they are the exception to the rule, playing well past the normal age of retirement and using their competitive legacy to build a personal brand. So instead of direct sponsorships, like are found in tennis or golf, e-sports sponsors avoid worrying about player retirement by working with teams.
These teams, like Evil Geniuses or Dignitas, have often been on the scene for a long time and have changed their rosters as games come in and out of fashion. While teams have more staying power than other parts of competitive video gaming, they aren’t a great brand. Unlike traditional sports, the teams aren’t tied to a region, whether it’s a city, state, or nation, nor are they linked to any specific institution, such as a high school or college, so there is little to no intrinsic appeal to a team; no local or institutional pride is on the line. There is literally no reason for a fan to stay loyal to a team the way they do in other sports. So teams end up being a tool for consolidating sponsorships, which is fine, except that sponsors are tying themselves to a hollow brand. The value-added of the team is the players, who fans are loyal to, not the team itself. Aligning with a team, a business arrangement that fans don’t care about, whose value in the community can sway dramatically with a single player joining or leaving the organization, is not a very safe choice for sponsors to make. League of Legends teams come the closest, as League of Legends is actually a team-based game, but since they aren’t tied to anything but their own brand, when fans root for Team Solo-Mid (TSM) they are doing so because TSM has their favorite player or players, and if those players leave the team, that support goes away. A counter-example to this in Western sports is racing. Racing teams generally aren’t tied to any city, and while acquiring star driving talent helps the team and its brand, and losing talent hurts, fan interest doesn’t evaporate with every personnel shake-up. Then again, in Formula 1 there is a history of teams being tied to major auto companies, which is an institution of sorts, and with that also comes nationalism. A fan might root for McLaren over Ferrari because McLaren is English and so are they. Western e-sports teams are so heterogeneous, though, that this type of nationalism is moot.
Finally, there is the scariest thing of all: gamer culture. Gamer culture in the West is a pretty rough and tumble place. While it would take too long to go into all the social, cultural, counter-cultural, economic, and psychological reasons it ended up this way, including the slight variations between the communities of different games and genres, the simple fact is that gaming culture is profane, abrasive, and politically incorrect. Anyone who has played online, especially in a ranked format, knows that people lash out if they lose, talk trash if they win, and the language they use is less than savory, ranging from simple cursing to racial slurs and homophobic epithets. Obviously, big name sponsors aren’t in any rush to associate themselves with a community that could explode into a PR disaster at a moment’s notice, and so the scene continues to struggle financially.
As someone who actually enjoys watching competitive video games, it saddens me to think that e-sports in the West may be relegated to obscurity, and that top players will continue to play while they’re young as a lucrative hobby, and retire once they need a real job to support themselves. But competitive video gaming isn’t an impossibility, and there is hope. A shining example of successful e-sports is found overseas in Asia, namely South Korea. Asia in general has a very strong competitive gaming scene, with Japan being home to top fighting game talent and hosting the world-famous Super Battle Opera, China’s well-documented obsession with Warcraft III and DOTA Allstars, and the recent inter-Asian League of Legends league that hosts teams from Singapore, China, Taiwan, and others, but when it comes to parallels to Western affluence, and longevity and success of competitive video gaming both culturally and financially, South Korea is the king. So what about Korea makes it work?
The first big way that Korea is different is in the social stigmas attached to gaming. The popularity of PC Bangs, a type of gaming-centric Internet café, amongst other factors, has led to video gaming being more acceptable as a leisure-time activity. Gaming still faces an image problem, but this has more to do with what Koreans refer to as “gaming addiction” and less to do with Western ideas about gamers as basement dwellers. Interestingly, parents both in the West and in Korea still discourage their kids from pursuing gaming as a career, in favor of more traditional jobs, despite the fact that in Korea top pro-gamers make hundreds of thousands of dollars a year, are treated like rock-stars, and retire into an infrastructure that almost guarantees employment should they choose to accept it. The larger point, however, is that Koreans aren’t ashamed that they play and watch games, which allows gaming TV channels like OnGameNet to be profitable. Attracting sponsors is also easier for Korean teams than in the West. Korean players are coached in professionalism, which cuts down on the crassness Western gamer culture often displays. Teams have players include physical exercise in their training, along with their many hours of game practice, to improve reaction speeds and mental acuity, key elements to competing in e-sports. This also makes e-sports figures in Korea very fit, which not only kills the geek image of gamers, but further helps mainstream appeal by drawing in a female audience that might otherwise have been uninterested. Team structure in Korea is also better, paralleling the Formula 1 model I described earlier. Hugely wealthy and influential Korean companies like SK Telecom, Samsung, and KT own teams outright, and support competitive gaming with large cash salaries for players, full-time coaches, practice houses, equipment, and other privileges. As a result, teams are recognized for their name, not just their marquee player, and so the ups and downs of player trades, weak seasons, and player retirements are weathered in a way that Western teams struggle with. Player rollover is still an issue, as Korean pros burn out quickly. Looking at the rise and fall of Bonjwas, a Korean term for their superstars, top players only stay relevant for about 3-5 years, compared to the 10-15 years of a world-class tennis talent. However, there is greater consistency in the games themselves. While there are competitions in a variety of titles, by far the biggest is Starcraft: Brood War. Currently in its 13th year as a televised competition, it is only now being retired by the growing popularity of its sequel, Starcraft II. Unlike the West, which immediately switches titles when a new version comes out, Koreans were split between GomTV, a Starcraft II e-sports show, and OGN, the steadfast broadcaster of Starcraft: Brood War star-leagues for years and years. Finally, nearly two years since its release, KeSPA, the governing body for e-sports in Korea, is steering star-leagues towards Starcraft II. The only exception to this stability is the meteoric rise of League of Legends, which despite being released in Korea only a few months ago, is now even more popular in PC Bangs than Starcraft II. Whether League of Legends supplants Starcraft or they find a way to coexist, it is clear that Korean broadcasters, players, sponsors, and teams all know they can rely on KeSPA to do their best to keep the e-sports market a safe place to invest money. This kind of consistency is something that we desperately need in the West if competitive video gaming is going to thrive.