ReDeYe: Esports fans should brace themselves for eventually having to pay to watch tournaments

I’ve worked in esports for nearly 18 years now, having started out as a Jolt League admin in 1999, mainly running tournaments for Unreal Tournament. Since then, I’ve been lucky enough to be part of the ride that has seen esports grow from a bedroom pastime to a billion dollar industry (or at least not far off). I’ve seen it grow from online leagues and ladders to world championships held in sports stadiums. I’ve seen it grow from 25 listeners on a shoutcast server to an estimated 385 million fans worldwide, according to the latest data from NewZoo. I’ve seen it grow from community-run online leagues to publisher-supported, multi-million dollar seasons.

I mention all that not to swell my already sizable ego, but to show just how far we have come in a small amount of time. It would be (and is) a remarkable rise for any sport, let alone one not universally accepted as just that, a sport. There are times when I think we as fans of various esports forget just how remarkable the growth is. We tend to take for granted that on any given weekend there will be multiple major tournaments around the world, all of which offer live streams with professionally-produced shows that we watch, for the most part, free of charge.

Indeed, so vociferous are we as fans that any mention of “payment” is met with ridicule and disdain for any that dare suggest such a despicable act be performed on their beloved game and community. But whether we like or not, it’s coming. The business model in esports is changing. Again.

Nothing to pay for

In the beginning, we merely wanted to provide tournaments to players who yearned for the competitive fix within their game. Online leagues, ladders and cups were created, but the internet’s capabilities were limited compared to what they are now. So a tournament like Clanbase Eurocup, one of the most prestigious online tournaments in the early part of the century, almost exclusively included players and teams from Europe. Likewise, CAL was mainly dominated by those based in North America.

Soon, though, tournaments began around the world with the aim to bring the various continents together. The only way this could occur would be via LAN in one location. Indeed, not much has changed today, for while the internet has improved incredibly since those early esports days, it’s still hard to run worldwide online tournaments in the vast majority of games. With the move from online to LAN, money was required to get there, run the tournament, provide the infrastructure and entice teams and players to actually attend.

Remember there were few professional players in 2001 and certainly fewer teams who could afford to send anyone to an event halfway around the world. Compare that to today, when it’s rare that teams would pay to send players anywhere, with many tournaments paying flights, travel, hotel and food for the length of their stay.

Likewise, tournaments had to generate money to cover their costs including prize money, and the bigger the prize money, the better the tournament was perceived. The big tournaments of the day were CPL, WCG and ESWC. Win one of those and you were considered one of the best in the world. Yet even then, these tournaments took an age to pay out prize money and indeed at times failed to do so at all. They wouldn’t be paying anyone to attend, either. Those funds would have to be covered by the teams and players. And don’t forget, these tournaments, especially in the early years, had no broadcast attached to them. No casters, hosts or analyst panels. No big stages or cameras. As fans, we would badger players on IRC for their demos so we could watch back some of the tournament days, weeks or months later. We had no Twitch, no YouTube, no Discord, no Twitter, no Reddit (though we did start using Digg), and IRC was usually our only means of finding anyone in esports. It was tiny.

No wonder publishers pretty much ignored the entire scene, dismissing it as a smaller subset within what was already considered the niche industry of gaming. Yet today we see publishers not only embrace esports, but indeed build games from the ground up with esports in mind. Publishers like Riot Games and Blizzard now have their own internally run world leagues with millions of viewers. Valve operates slightly differently, yet still produces one of the highlights of the year with The International, the world’s highest prize-funded tournament with more than $20 million up for grabs in last year’s event.

Change is coming

For every weekend we are blessed with a multitude of esports events to watch and consume, we should be thankful, especially when they are provided free of any charge (save for some advertising). I say this because it won’t be long now before you will be in a position where you may have to decide if you pay, for what you pay and how much you pay.

Pay-per-view is a dirty phrase in esports, but we are going to have to embrace it if we want our weekly fix at some point in the future (possibly not that far away). Many don’t understand the business side of esports, especially the commercials on tournaments. The bottom line in any business is to make money, and with more and more tournaments being run by large media companies or publishers, they will have eventually have to answer to shareholders. They can’t operate at a loss forever. And trust me, almost every esports tournament organizer has, for as long as esports has been around, made a loss. Very few have ever turned a profit. Media conglomerates don’t buy esports tournaments and organizers to lose money.

The business model is changing because it has to. It has changed many times in the past, from a team requiring a few online sponsors for local travel to major car companies like Audi allowing a team to make money. From tournaments selling advertising banners on their website, to tournaments that require major blue chip companies like Intel or Samsung to sponsor the entire event for millions of dollars. The model is changing again, but as more traditional advertising starts to warm up to esports streaming (they traditionally like TV and radio), big companies will start to understand the demographic reach and appeal, and television will fully engage with esports. Likewise, big tournaments can no longer rely on putting up $25,000 in a village hall and hoping it will be seen as a big tournament. Instead, they rent large sports arenas and need a prize pool minimum of $250,000 to be even considered large enough to qualify as a major event on most weekends.

As all of these changes occur, the people at the top have one thing on their minds: Can they make a profit? The answer will come in time as various tournament organizers, marketing firms and television companies make a bid to change the business model in order to make a profit. In turn, that means changes for us, the fans and viewers, and we should be prepared to have to pay.

It’s still very early days for pay-per-view, and we don’t really have anything to base it on other than some failed attempts in esports and the regular sports model — particularly in boxing. If we take anything away from those models, though, it would be that viewership sharply decreases, sometimes in the region of 90 percent. If that were applied to esports, that would mean some major events getting less than 10,000 viewers.

So while we will likely see some experiments in that realm this year, an overhaul of the business model is still in the distance. It just doesn’t make sense right now with our viewership levels. We think we are pretty big in terms of viewer numbers, but I don’t believe we are that critical mass of exposure where pay-per-view could be a huge success, at least on all but the very biggest of events like The International or League of Legends World Championship. And even if it were, there needs to be a damn good reason to pay for something we previously enjoyed for free — and not just an HD stream over a standard definition one. Providers will need to get creative with their offerings, and we’ve seen a few glimpses of this over the last 12 months from Gfinity with their interactive tv client, ELEAGUE providing specialized feeds during the Major and Riot’s excellent alternate options during Worlds. But will that be enough to get people to pay?

The next three years provides some exciting times for esports, but make no mistake, if the last three years are anything to go by, it could be completely unrecognizable in 2020, for better or worse.

Cover photo by Kirill Bashkirov/ESL, eslgaming.com

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