Esports Must Lose To Win

This is the ’90s tech bubble all over again

Esports had a rough day October 9, 2018. Echo Fox released a bunch of people. Optic Gaming parted ways with some people, and here we are living the ’90s all over again.

For those of you who have zero idea what it’s like to not have internet, there was a time when cell phones were bigger than a loaf of bread, and we dreamed of exactly what we have right now.

Our collective technology eyes were bigger than our stomachs because every sci-fi wet dream was about to come true. Until it didn’t, the economy tanked because people over promised and under delivered, people lost boatloads of money, and all the bearded hipster coders had to shave and get real jobs.

That’s exactly what happened yesterday in esports. Our drooling faces thought we could see the esports athlete be treated and paid like LeBron, Kobe, and Tom Brady. Then the money dried up.

Why did it all dry up? Here are the reasons we lost yesterday as well as how to win and make this all we know it is.

Everything Is Fragmented

As TV dies a slow death, every subscription viewing service jumps in to fill the void. There are multiple streaming platforms for games with more being developed right now. Everyone and their investors want a custom streaming platform because it’s the wave of the future.

Netflix, Hulu, Twitch, Afreeca, HBO GO, Mixer, Showtime On Demand. You can add your own understanding to the list. For every platform you think you know, there are dozens more. This means eyeballs are not specifically concentrated in one reliable place.

Combine this with the tribal nature of gaming in general. There are card games, RTS, FPS, FGC, MOBA, and you can add your own letters to the alphabet soup of abbreviations. Then within each genre, there are multiple titles that don’t necessarily capture everyone’s love.

Within the FPS genre alone there are several AAA titles that carry weight. So tell me again is Halo the real FPS flag bearer? Or is to Call Of Duty? Or is it CS:GO?

MOBAs have Dota 2, League of Legends, Heroes of the Storm. Who’s in charge here? Help me with this one because it feels like League is not what it once was anymore.

For as much as journalists like to quote projected esports revenue in the billions within a few years, those billions are locked into silos that don’t connect enough.

Starcraft players and fans don’t hang with Halo players and fans who don’t hang with Street Fighter players and fans who don’t hang with Dota 2 players and fans. You get my point.

It’s essentially up to each platform and fan base to live and die with their own brand often at the expense of other games. That chokes off the revenue streams and hurts in the long run as groups attempt to poach fans from other titles and squeeze out as much money as possible.

We Have An Emotional Problem

We know exactly what football looks like in our collective minds. It’s the helmeted Tom Brady standing amidst the oncoming pass rush, and it’s also the eyes of Ray Lewis in his pre-snap stance. We know what baseball looks like. It’s Mike Trout looking at his majestic home run. We know what basketball looks like. It’s Russell Westbrook putting another defender on a poster.

We know exactly how we feel about each of those images in our mind.

What does esports look and feel like? THIS.

Yup. It’s guys sitting at keyboards. How are we supposed to feel about this?

There is nothing unique and powerful about this image. It happens every single day at every business ever. This person could be watching YouTube videos about bacteria for all we know. He could be coding the next streaming platform. He could be wondering how much longer until lunch. THIS. IS. BORING.

Football, baseball, and basketball have unique motions associated with them. Because humans feel with pictures, tell me exactly what sort of deep emotion this is supposed to evoke?

We Are Way Too Cheap

Low barriers to entry gave birth to the fragmentation stated above. That means everyone has access which is both good and bad. It’s great that everyone has the opportunity to be awesome. It’s bad for exactly the same reason.

Competition for eyeballs became fierce and the awful business model called the Freemium Plan turned into a demon even Kratos couldn’t slay.

As a result, we became Freemium whores jumping from one Gleam giveaway to another. Twitch, YouTube, and every other game streaming platform is basically free. We hate advertisements not realizing they pay the bills. We won’t buy anything to support our teams and squads.

So when these major brands like Red Bull, Coke, Toyota, and Dr. Pepper don’t see the ROI they originally sought, the cash faucet gets shut off. Then all those crazy contracts orgs offered to get talent can’t be paid.

The best example is Punk. He left Panda Global in March 2018. He signed with Echo Fox, and less than six months later he’s released. It’s not a talent issue. Punk just won the CPT event in Monterrey, Mexico.

The truth is Echo Fox spread themselves too thin in too many games and had to cut costs to stay alive all because we want too much free stuff. There’s a reason NBA and NFL tickets are so freakin’ expensive. All that support and infrastructure is expensive.

Investors aren’t seeing the ROI they were promised. So the market corrects itself, and people (not just famous athletes) lose their jobs. So what about the revenue projections in the billions? They live as microtransactions for AAA game publishers. Epic made over $3oo million in both April and May from Fortnite microtransactions. Think about that for a minute.

Here’s How We Fix This

That was a lot of complaining, and I hate people who complain without offering some sort of solution. So here’s mine.

We must adjust our own expectations. I mean adjust. I don’t mean lower, and I don’t mean raise. I mean exactly what I said.

Expectations that esports is the next NFL or NBA or (God help us) the Olympics brought us this far. We cling to models that are still functioning only because they are so old and entrenched. Esports must embrace the mobility and diverse expectations of each tribe.

I hate hearing how esports MUST be an Olympic event, or how the NCAA should support esports with scholarships.

DEAR GOD, NOOOOOOOOOOOOOOOO!

Our expectations are so far out of wack we can’t fathom what we are asking. If the NCAA tried to have school-based scholarship esports teams, no one would play because athletes receiving scholarships can’t earn ANY income elsewhere. This also means streaming.

Imagine the outrage at being forced to stream for your college for free. People already think the NCAA exploits athletes for its own gain. They will do the same with esports.

And the Olympics? If you think EA and other major game publishers are greedy, corrupt piles of human waste, the IOC says “Hold my beer.” Google Olympic city selection scandals and start reading. I’ll get back with you in a week or two.

We must fix our expectations and let go of the old mindset. We must support the streamers and players we love and stop being so darn cheap. Quit getting upset about microtransactions and paywalls for content. Everyone needs to eat including the GFX artist and writer.

Embrace the diverse tribalism and expect multiple small revenue streams instead of praying for one benevolent benefactor. Esports, just like every other form of entertainment is business. Never forget that.

*Update* This was by far the most popular and interactive post I ever wrote. Check out my responses to all the points raised by everyone in the follow up to this called The Remix.

Bill Wagner is the Chief Relationship Officer for Esports Labs. You can follow him on Twitter and LinkedIn.