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Q&A with MLG/Activision execs Mike Sepso, Sundance DiGiovanni and Adam Apicella

It’s been a busy year for Major League Gaming. It was acquired by Activision Blizzard at the beginning of the year and is producing the weeklong Counter-Strike major in Columbus, Ohio. Slingshot’s Vince Nairn had the chance to sit down with Mike Sepso, Sundance DiGiovanni and Adam Apicella to talk about a bevy of topics.

Vince Nairn: First of all, how do you feel the event’s going, and what have kind of been the most successful points so far?

Mike Sepso: Well it’s huge. We sold out 9,500 seats and the broadcast numbers have been tremendous. So I think that’s the best part. And then, fans seem to really love, and we’ve got some good drama and good storylines. It’s great to have a couple of American teams make it this far. One left, but (yesterday) was a great match.

VN: Adam, I know you’re the guy who is in charge of all the tweaks and making sure the event is good logistically. How do you just go about that and trying to figure out what’s working, what needs to be fixed, how the community responds, etc. How do you take all that feedback on the fly?

Adam Apicella: We have a really great team, and we come up with a plan. Then we share what we’re going to do, right? But then we see how the community reacts. We adjust what we can, and we let them know what we’re adjusting. It’s sort of a collaborative effort between our team and the community we’re trying to create a product for. We make the tweaks that make sense, and we just keep them informed as we move along. A great example is, this show was originally supposed to be just semis on Saturday and finals on Sunday, and the community openly rebelled against that. So we took that feedback and added another day, and then we saw schedule complaints so we moved quarterfinal from Friday to Saturday. So we come up with a loose plan, and we engage the community to make sure that we get it right.

Sundance DiGiovanni: One thing you have to understand is we’ve been doing events of various sizes and scale for well over a decade. Our in-house team has over 100 years of esports experience. The broadcast team, and the talent we bring in. You add it all up, and it gets up to 200 years of event experience both on the operational side and the talent side. Our goal is always to do more, more, more and to get better at it. The thing is, this is the first North American major for Counter-Strike GO. It’s the first time there’s been an event of this scale with this much prize money on the line. In a region that’s considered the weakest for Counter-Strike, we wanted to deliver the best event ever. SO we basically went out and challenged ourselves in all departments. From the viewing side, how can we make a better viewing experience, using data. On the broadcast side. Adam, sketched this stage out on his own and said, “Can I do this?”

We really tried to level all things beyond what we’ve ever done before, and you can see it in the audience. I don’t think we’ve ever had an event where the feedback has been so overwhelmingly positive.

VN: When MLG started, did you envision this? $1 million on the line. Esports’ rise has taken a while. How was the plan and the process for you, getting to this point?

SD: Absolutely. We were very early in this in a lot of ways. We came from a media and entertainment background. We saw an opportunity to build something from the ground up because there was so much appreciation from the community and value there. The advertising industry and the gaming industry took some time to catch up to us. But the intent was not to do this at a small scale. It was to create a truly global, digital, connected sports media business. The way that we’ve been able to do that and be successful is holding ourselves to that original vision, even though it’s taken a little bit longer than we would have liked maybe. BUt we’re well on our way. We’re not even there yet. We’re starting to scratch the surface because the entire ecosystem is evolving. It’s on its way.

VN: How did you try to stress patience with MLG, especially in the years before this growth? How did you guys just kind of handle those moments and trying to stick to the plan?

MS: It’s been frustrating at times, I think, to wait for different parts of the industry to sort of catch up. But I think it’s also still very early. Just because we have a sold out arena and a $1 million prize pool doesn’t mean that this is the NBA. So we have a lot to do still, and I think a lot of that is going to be taking all that excitement and organic energy and channeling it into sustainable models, especially business models. Because I think that’s not really figured out yet. We’re trying to do that, and we’re trying to scale everything up and make it more sustainable so that we can continue to reinvest in the fan experience.

AA: Esports, everyone talks about the growth of it and how it’s exponential, and it is. It’s just that we need to make sure that as we grow it, we scale the other important parts of it. Obviously revenue. Revenue has to keep up to support this. But also, we jumped straight from an idea to emulating traditional sports. You see the NFl and all these pro leagues. There’s nothing underneath (esports leagues).Football, for example, has peewee football, high school football, college football. There’s an ecosystem to support the top-level endeavor, and that’s something where esports has to do a little working backwards to support this growth, otherwise it’s not going to support itself.

VN: How much feedback through this week have you received from Valve. Have their been any conversations or hopes of doing another event like this, whether it’s here or elsewhere?

SD: Well, we can’t talk about rumors or speculation of things that aren’t announced. But we’ve raised the bar, we think. We think this is the best Counter-Strike major that’s ever been hosted anywhere, so we think we’ve proven that this can work in North America. So, if given the opportunity, I think all three of us would raise our hands and put all our energy into that. Valve has done a very good job of creating a system where teams and players are connected to the revenue opportunities around events like this. The in-game sticker sales and item unlocks that are available put a lot of money into the teams and players’ pockets. And that’s what we need. We need a lot more of that. An infrastructure in place lets us to invest more because when the tide rises for the teams and the players and the community, it rises for us as well. So now that we’re part of Activision Blizzard, we’re trying to expand that out more broadly. We’re not an independent company anymore, so we’re able to invest a little differently. We also think we’re able to change the industry a bit more.

VN: Was there a hint of “this is our shot.” This is a chance to make, as you said, the best major ever?

SD: Yeah. Adam and I on the even side partnered together very closely with what it’s like on the uppermost seat to down on the floor. To the point that he called an audible at the last minute and added screens at the front of the stage because those premium seats didn’t have the best sight line. We’re already looking at things from this event that we’ll improve upon for the next one. No matter what the scale of the event or the size of the scope, our goal is always to deliver an amazing experience for everyone, whether they’re home watching, at the arena or competing on the stage.

VN: How has the transition been since the acquisition by Activision Blizzard?

MS: I was on the other side of the transaction, so from my perspective, it’s been OK. I think the way Activision Blizzard works, each of the five operating companies is really independent, and so we have a mandate to really just help the industry forward, purely from an esports point of view. A big part of that is trying to help out the media side of the business. Helping organize the ecosystem like Adam talked about, helping make it more sustainable. And then creating a media product that will help drive that value forward. I think that there wasn’t a lot of changes to be made. That’s what MLG’s been doing very well. To the extent that we are making changes, kind of behind the scenes, it’s really about putting a lot more investment in terms of resources and capital to work on the things that MLG does really well.

SD: From my side, MLG, it was a real labor of love. We started this thing and had a lot of passion behind it. I was there every day from the start until the day that we sold it. So for me it was about getting it to a place where what we wanted to build could occur. As an independent company, it’s difficult. You don’t necessarily control any IP, and you have to constantly be chasing revenue instead of chasing sustainable and intelligent investment. So now I look at it as an opportunity where instead of thinking six weeks out, I’m thinking months, years in terms of what this pattern is and what this approach can be in terms of not only building an esports ecosystem for Activision Blizzard, but for our partners like Valve. To be in a position where the executive team at Activision Blizzard understands how important it is to continue to work with Valve is amazing. A lot of people might be like, “Well, this is it.” Well this isn’t it. We’re going to be doing a lot more like this because it’s not the point of view of “We need to focus on only our IP.” It’s a point of we do this better than everyone else, and if we don’t have a hand in how it’s done industry wide, it won’t be done properly necessarily. We need to raise the bar. We need to make sure the events are a certain level. We need to make sure the players and teams are taken care of. We need to make sure there’s opportunities for other people to come into this space and make successful businesses. We don’t need to own 100 percent of it. We want to build a much larger pie where everyone can have a piece, and we want to really grow this to the point where it can be on par with traditional sports media businesses.

AA: Also, too, with the short attention span. In this space, when a game launches, you really have only one shot at the beginning to be able to capitalize on the launch of the game and how the community initially receives it. I think there are some anomalies out there like League of Legends and Counter-Strike where it was a marathon for them. They launched and it was kind of like, ehh. But they built, and now they’re apexing many years into release. A lot of games though now, it’s immediately. And what we talked about earlier with a lack of infrastructure, they’re dying on the vine because they have a “I want a pro league. I want everything that that other (game) has.” They’re not doing any of the work to get there. A lot of the games that are coming out and have a lot of potential, they don’t have a proper approach or a proper infrastructure or they don’t have the plans or the model Sundance is referring to, they’re dying on the vine. We’ll never know if they could have been something, even though they’re great games.

VN: Adam, when it comes to events you’re kind of the public-facing person, and obviously you’re on social media. How have you owned that space, so to speak, and found the way to interact with everybody in a way that seems to benefit everybody?

AA: So it’s been a weird journey to get there in terms of the whole policies. I’m kind of uniquely positioned to be able to message a lot of stuff because I have my hand in a lot of stuff here. So I’m not necessarily in charge of anything, but I interact with Sundance’s production team.I interact with the event team. I know a little bit about everything, so I’m well-versed to answer a wide swath of questions. But until probably when we approached DOta, we had a strict company policy of not engaging on a community level. We were through official channels and PR statements, and that’s it. For Mike and me, we did this almost as a social experiment. Let’s see what happens when we interact on the ground floor with the Dota 2 community. And they appreciated it. The first event we had in Columbus, our first ever was a massive success and still seen as one of the best Dota events of all time. And that’s because we were able to get that feedback and implement the stuff the consumer wanted. And we kind of tweaked that strategy and applied it to all games.

SD: I just wanted to comment on that because although I wish something he’d go to bed early and not respond to every single Reddit post, what you see there is the same passion that he puts toward these events. Adam takes it very seriously. It’s a matter of personal pride for him to make sure that no matter who you are, if you buy a ticket or tune in, you have a good experience. Because there are other things you could be doing. There are other places you could go and find entertainment. We owe it to our audience to over-deliver. Adam takes that incredibly personal and seriously.

VN: So what’s next, in the broader sense? What do you see as the most important thing you can do to continue to help esports grow?

SD: For me, it’s creating a bit of predictability and sustainability around the growth. Because we can see there’s investment coming in all over the place to the space, so if millions of dollars go into things that can’t be sustained, how does that help us long term? It can’t just be a lottery ticket for a guy who has a ton of money and thinks maybe it’ll turn into something. We’ve got to have smart investment opportunities. In order for that to happen, we have to look at the entire space. For a kid who’s 12 years old today,what’s his path to pro by the time he’s 16? How does he attach to this? How do parents learn about it and become comfortable with it? How does a brand introduce itself into a space in a way that is additive instead of predatory? All of these questions need to be answered in a way that isn’t fly by night, in a way that has some staying power. And that’s why we’re building not just around the media or event side of this but also our executive team in terms of how we approach this and how we operate the business to be something that can be around a long time after we’re done.