This week the ‘eSports IQ by Alex Fletcher‘ features the following content: The reality of eSports governance; Can FACEIT and Twitch spark change?
The reality of eSports governance
The SportTechie interview with Moritz Maurer, head of eSports Integrity for SportIM, provides some interesting perspective on the link between integrity and governance across the competitive video game landscape. Mister Maurer also underscores the role of game publishers as de-facto governing bodies. From one perspective, game publishers are among the most knowledgeable entities about eSports titles. On the other hand, the business of publishing video game titles can conflict with the duties of effectively governing a competitive scene. The notion of a for-profit enterprise representing significant commercial interests and holding court as a governing body is totally unheard of in other industries, for very good reason. Typically, not-for-profit organizations or collectively organized structures assume the responsibility.
Yet, as sponsors pour more money into eSports, governance is being left in the dust. The market for sponsorship is growing faster than regulation has a chance to mature. If game publishers remain as leading governance bodies, this becomes their responsibility and risk. Unfortunately, this group must recognize a material effect on their business before pushing the envelope forward. So while issues like integrity are being targeted by companies like SportIM, others like individual player and marketing image rights remain ignored; both of which also threaten to decimate the competitive and financial integrity for eSports.
Given current and projected growth rates, eSports will soon evolve out of its role as retention marketing for various video game titles. At that juncture, the functional overlap of publishing games and guiding the growth curve of an entire eSports ecosystem will lessen considerably, with the latter becoming increasingly complex and potentially resource intensive. Ideally, publishers will begin to openly empower other parties to play a role in the governance process, sooner rather than later. However, this requires looking past immediate interests by employing a unique mix of vision and collective will. As of today, it’s unclear how reasonable that prospect is.
Can FACEIT and Twitch spark change?
As competitive video games mature into a revenue driver, the concept of revenue sharing across areas such as the sale of broadcast rights, licensing rights, and ticket sales have gone missing. As a result, the general financial prospects of professional players and teams have lagged behind profits generated by other parties. However, the partnership between FACEIT, a leading online tournament platform, and Twitch to create an eSports league for Counter-Strike, aims to be the first of its kind to grant teams and players a share of revenue, and representation in the governance process. Dubbed ESports Championship Series (ECS), the league is structured to address the multitude of challenges faced by professional teams and players.
While ECS is a significant step in the right direction, its first-mover status underscores widespread flaws in the general eSports landscape; explicitly the faintly veiled disregard for player and team welfare. Considering the profits drawn directly from eSports, by various game publishers and tournament organizers, competitive organizations and their players remain an afterthought. For instance, streaming platform, Hitbox, recently signed a broadcast deal with tournament organizer, ESL; a partnership which lacks any stated provisions for revenue sharing. Essentially, ESL will receive a windfall from sale of the rights, and Hitbox accrued benefits from viewer traffic during broadcasts. Meanwhile, teams and players can only find compensation by winning a piece of prize pools; all despite their role as the heart of the broadcast content. The unsustainability of these dynamics is stark.
Conversely, the rising value of sports business is directly related to its advances in revenue sharing and governance representation. Shared growth for all stakeholders has proven to be, not only “fair,” but also highly profitable. Electronic sports differ from traditional sports in several key dimensions, but the concept that a strong competitive product requires equitable distribution of revenue, profits and representation is fundamentally shared. So while ECS is a sound business decision for both FACEIT and Twitch, it must also compel similar industry wide changes towards more sustainable models. Until such time, eSports will struggle to blossom as a stable commercial ecosystem.
- eSports: With Great Growth Comes Great Risk – sporttechie.com
- eSports Sponsorship Insight, March 2016 – entivagroup.net
- Turner’s ‘ELeague’ On TBS Looks To Create The LeBron James Of eSports – ibtimes.com
- Faceit and Twitch launch esports league where teams are owners – venturebeat.com
- Hitbox signs esports broadcast deals with ESL, DreamHack, and Wargaming – dailydot.com
About ‘eSports IQ’
The ‘eSports IQ’ is compiled by Alex Fletcher, the founder and president of Entiva Group, LLC, and features insights on the latest emerging trends in eSports. By curating invaluable content from a wide range of information sources you get the leading edge in the business of eSports. The complicated past (and future) of esports on TV
Past eSports IQs:
- Week 13: ‘Is Turner’s ELeague for fans or advertisers?’ and more insights
- Week 12: ‘Understanding celebrity investment in eSports’ and more insights
- Week 11: ‘Audiences vs. Viewership in eSports’ and more insights
- Week 10: What does eSports on TV really need?
- Week 9: ‘Cineplex takes a shot at eSports market’ and more insights
- Week 8: ‘The potential of eSports and gaming as mainstream’ and more insights
- Week 7: ‘Vodafone partners with G2 eSports’ and more insights
- Week 6: ‘MP & Silva has been named the global marketing rights partner of Garena’
- Week 5: ‘ESPN continues investment in collegiate eSports’ and more insights
- Week 4: ‘ESPN eSports must exhibit hyper focus’ and more insights
- Week 3: ‘eSports is growing but has not started scaling yet’ and more insights
- Week 2: ‘Deloitte joins the eSports numbers debate’ and more insights
- Week 1: ‘Sport property continues commitment to eSports’ and more insights
Image source: eslgaming.com, Photographer: Helena Kristiannson