We talked about the definition of esports, discussed what career prospects are, found out key shortcomings, and made predictions about the eSports industry.
Away:
- Artyom Bykov, General Manager, Game Management, ESL Gaming
- David Dashtoyan, Head of BizDev, MTS Esports
Getting To Know The Guests
Artyom Bykov has been professionally involved in eSports for ten years. Now he works at ESL Gaming, and before that for five years at Blizzard in various esports roles. He also worked at NAVI as a StarCraft 2 team manager. He also worked as a product manager at Dreams Media, which is now called Epic Esports Events, and organizes the Epicenter tournament. Participated in a large number of eSports events in Russia and Europe.
David Dashtoyan has been in eSports for five years. Now he works as the head of the commercial department at MTS Esports. There are two products in the MTS esports direction: the Gambit esports team and the WASD.TV streaming platform. Before MTS, he was the founder of the Dota 2 esports organization called Forward Gaming. Before that, he worked at the ESforce holding, where he was responsible for the partnership obligations of the Virtus.pro team.
What Is Esports
Dashtoyan said that in the narrow sense, esports are the most viewed disciplines: Dota, Counter-Strike, and League of Legends. Top 10-15 disciplines, where there is an existing ecosystem, tournaments, teams, and a certain number of participants. Broad definition: eSports is any competition in video games. For example, “Tetris” for a while.
Our industry is constantly changing, so I don’t like to box myself in. For, I define esports as an entertainment industry with some elements of sports. The main elements are the presence of a video game, the people who run the competition, and the people who make the show out of it: come up with the format, structure, prizes, and so on.
Artyom Bykov
General Manager, ESL Gaming
The ecosystem itself consists of many elements: the game, developers, publisher, players, tournament operators, viewers, professional organizations that collect players and try to help them and grow talents, platforms on which competitions are broadcast (Twitch, YouTube), sponsors and brand partners, commentators, content creators.
According to Dashtoyan, if you want to get a job in the esports industry, there are many opportunities for you. Can go:
- to the developer, and then you will build the esports ecosystem from above;
- to an independent tournament operator and hold their tournaments;
- in an esports team – there are also a lot of tasks and positions;
- broadcast studio and cover tournaments (but more often tournament operators have their own);
- to a streaming site to become a streamer or caster (commentator);
- to a sponsoring company and become a manager there.
Where Does The Money Come From In The Industry?
According to Bykov, a large segment is media deals. If a company hosts a major tournament, it may enter into a deal with a major platform (Twitch, YouTube, TV channel) that will result in the tournament being streamed exclusively on that platform. The team can do the same.
If a company organizes a tournament and it has had a backlog of tournaments for the last five years, it can negotiate with TV channels so that they buy out countdown content – an old tournament that is being cut down to a TV format. For example, in Denmark, people like to watch esports on TV very much.
Another way to make money is the franchise model of organizing leagues. Two segments can be distinguished. The first is an open type, where anyone can assemble a team of ten people and reach the final within a year. Another type of league is the franchise league, where a team has to pay a certain amount of money to get a slot in the league. This type of tournament guarantees investors (i.e. teams) that they will not be kicked out of this league, even if they play poorly. This means to sponsor and brand partner ads will show up in that league.
Investments In Esports
According to Dashtoyan, at the global level, in Europe and America, huge amounts are still actively invested in e-sports. Investors have faith that esports will someday become a hugely popular sport like football or hockey.
There are very few teams that can pay off now. Often the publisher does not make money, but rather pays esports teams to keep the teams in the league. At the same time, approximately 85-90% of all game money goes to the players, and only 10-15% goes to the organization.
As Bykov noted, a developer or publisher indirectly earns on eSports by extending the game’s life cycle. The last StarCraft patch came out in 2001, but the game is still a success. StarCraft 2 has an active player base that doesn’t want to play anything else, and the average audience per month has remained the same over the years, which is good for the game.
If a developer wants to get into eSports, then he must take care of this in advance. Even at the development stage of the game, you need to include esports features there so that it has a better chance of becoming popular. For example, options for advertising team logos and brands inside the game. StarCraft 2 has a feature that many people underestimate: if players suddenly lose their Internet connection during a tournament, they can start the game from where it left off. This greatly simplifies the life of the organizers.
Which Is Better: To Build An Ecosystem Or Go To A Partner?
According to Dashtoyan, there are two ways: you can, like Tencent, buy the rights from the game developer, make your eSports department inside and build a multi-level system. Or you can go to outsourcing, for example, to ELS.
Bykov said that the main problem is that the development of the game includes only the creation of a digital product. And the development of an esports ecosystem includes event management, live broadcast management, and some elements of show business. To build a large database in your company from scratch, you need to invest a lot of money. Therefore, developers often resort to partnerships with companies.
It is important to understand that the media only covers the top of the esports world, that is, the largest events. But the pyramid starts from the bottom – amateur tournaments organized by communities. Such tournaments must exist: if a developer or publisher invests money only at the top of the pyramid, then as soon as he stops doing this, new players will stop coming. Small tournaments in which players train will disappear.
It is important to keep track of all layers of the ecosystem. First, is the introductory level – the tournament, which will be the first window for the player. Then there is a qualifying tournament, after which the winner gets a pass to a larger tournament – at the regional level. At the top of the pyramid is an international tournament in which players from all over the world play for a huge price. The ecosystem provides a flow of new talent and players into the discipline. In football, every generation has its superstar. The same is true in esports.
Dashtoyan gave one more piece of advice: players of different levels must have the opportunity to provide themselves with this game. In CS and Dota, the prize money is huge, and 90% of it is distributed among 50-70 players. The remaining 10% is very little: if novice players do not have the opportunity to earn money in tournaments of the second or third tier, they will have to find a part-time job, and because of this they will not be able to become super players, because they will not devote all their time to the game. Riot Games doesn’t make the prize pools too big for a single tournament, but the total amount of money invested in the ecosystem is comparable to CS and Dota.
According to Bykov, since The International was canceled in 2020 due to COVID-19, a lot of money left the system, and some teams even closed. Riot Games didn’t get hit as hard – their money was distributed across different regions, and this made the system more impact-resistant.
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