GosuGamers Weekly Business Review, 3/3 - 10/3
Welcome to the Gosu Money Review, where we take a look at the biggest, most interesting or sometimes just strangest stories to permeate the world of eSports business each week.
This week the numbers are in the millions, and when it comes to a business post more is always better. We’re going to start with perhaps one of the most remarkable stories to come out of eSports in the last year or so, and one that pertains to one of the greatest publishers in the history of competitive gaming. We are, of course, talking about Blizzard, Overwatch and the franchise sales they have planned for the near future for the Overwatch League (OWL).
A story has been doing the rounds this week about Blizzard’s attempts and plans to sell franchises for their new, much discussed competition. Numbers that have been circulating for a while have now surfaced in the press, with the claim being that ‘a franchise could sell for $2 million to $5 million in smaller markets and three times that in Los Angeles, a focal point of esports activity,’ which is in itself a startling number to see attached to nothing more than a name and the chance to bid for players.
The crazy thing is that there is some debate, with www.sportsbusinessdaily.com claiming that ‘another source says that valuation is incorrect and is closer to $30 million on the high end’. This is all for a competition that isn’t fully fleshed out, and has no proof of concept to speak of. In fact, if you listen to those people old enough to remember the last time franchises and location based teams were suggested (CGS, anyone?) you’ll hear a lot of scepticism about the viability of the model at all.
Outside of eSports, there have been deals like this seen in a number of arenas, but recently cricket and the Indian Premier League has probably been the most famous example. When the initial franchises for that competition were sold, the highest price paid was around $120m (in early January 2008). A later sale for two new franchises in 2009 saw the cost rise to $225m each, with proof of concept obviously secured at that stage.
However, in this case the product was the most popular sport in a country of a billion people or more, and the rights to a team that was guaranteed to feature some of the world’s greatest players. The initial global broadcasting rights for the event were sold for $1.026bn over ten years, and in 2016 the competition was reaching 300m viewers by the third week of play, with a YouTube streaming deal also in the bag.
This is not to say that eSports should compare itself to the IPL, but when you consider they are potentially asking 5-10% of the initial cost of a team in that competition, the reward seems more of a risk. Many observers still believe that the best way to even spectate the game itself has not yet been settled upon, and with 25m players and a peak viewership on Twitch of 300k it’s fair to say there is some room for growth in that direction as well.
It’s worth noting that the likelihood is the initial numbers for franchise costs were actually released in some form by Blizzard, to test the water and gauge interest, and the rumblings from most directions seem to be that the proposed deal is a little steep. It remains to be seen how the sales work out and whether Overwatch can turn a marvellous launch into a spot among the eSports elite, but 2017 is going to be a massive year and it will be fascinating to see how this ambitious plan pans out.
Riot drop the boot
As promised, we’re staying in the big numbers for a bit, with some news that may have a tertiary effect on eSports itself but could be massive for one of the biggest player bases on the planet. Riot Games, publishers of the phenomenally successful League of Legends, were awarded $10m in a recent court case against LeagueSharp, a scripting company operating in the League ecosystem.
In layman’s terms, LeagueSharp essentially just offered users the ability to bypass the levelling and ‘qualification’ systems Riot has in place for a sum of money, with fees starting at around the $15 mark. In the initial suit, the games publisher claimed that LeagueSharp was "dedicated to destroying the LoL player experience, harming the LoL community, and subverting Riot's game (and its community) for its own profit."
In the short term, that essentially means that the site will be shut down, as even with such a lucrative model they are unlikely to be able to foot that bill, but what is more worrying for their clients is the fact that Riot were also given full control of LeagueSharp. In practice that should mean they have access to the entire client list, including account details, usernames and even bank details, and should see a heavy wave of bans rolled out in coming weeks and months.
Similar tools exist in many other games, with Blizzard currently working hard to clean up Overwatch and CounterStrike having a long history of ‘toggling’ cases, but this new attitude by publishers needs to have boundaries. In some Asian countries violations of Terms of Service like this have become criminal offences, which is insane, and surely a step further than any reasonable firm would want to go. As for LeagueSharp, we can’t be sure, but at a guess we’d say this is far from the last such case we’ll see in 2017.
Fight for your right to broadcast
Now, to something a little different, with a dispute from Poland, home to one of the greatest CS teams on the planet. In the land of Taz and Snax, a company called Fantasy Expo were reported recently as having written to the government petitioning for the game to remain as post-watershed material only, as 'The broadcast will contain scenes and content that may have a negative effect on proper physical, mental and moral development of minors (...)’.
At the time, this confused many people, mainly as Fantasy Expo are themselves broadcasters of the game, and the firm has since released a statement, which can be found in full here. The crux of the matter is, according to them at least, that they were concerned about fair play having lost out on the broadcast rights to the event, and that the government would allow their competitors Polsat to broadcast outside the normal hours.
In practice, the general feeling in the Polish scene is that Fantasy Expo have crapped on their own doorstep in this case, and their reasoning doesn’t exactly hold water. The concern came from a wider level of worry about the rightist leadership after a number of transgressions in recent months, but has ended up as a PR disaster for Fantasy Expo themselves, both in Poland and across the wider scene.
No Fakes, just a god of eSports
Finally, the power of League of Legends, and in particular one man, or maybe god in that game. Lee ‘Faker’ Sang-hyeok of SKT is known as arguably the greatest League player ever to touch a mouse, and has the success and accolades to go with it. Now, having already established himself as eSports royalty, the great man has joined the ranks of Twitch streamers, with predictably incredibly results.
The first hour of Faker’s stream instantly became the most popular single person stream ever to appear on the site, with 245k concurrent viewers. To put that in perspective, the peak viewership for fighting game community (FGC) event Evo was 232k in 2016, making Faker slightly more popular than the main event at the biggest FGC event in history. This information, which came to our attention via the ever interesting Slasher, shows not just the power of the man, but also the incredible fanbase League still has.
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Matches of the Weekend
Black Dragons take on WS in the Overwatch Old Spice Final
SKT1 take on KongDoo Monster in the LCK
SingSing's pub stack BeanBoys take on Team Secret in Kiev Qualifiers
Events to catch
Kiev Major Dota 2 Qualifiers start this weekend
Starladder I-League Season 3 Qualification begins
Kinguin would like to hire a Linux admin
Team Hop need a part time video editor
AVGL need a Live Broadcast Director
CS god Fallen using performance enhancing fashion...
Should sunglasses be banned in competitive CS?
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