All economical malaise aside, eSports is not going in the direction it should be going. As a highly sponsor driven market, eSports surely has taken a massive hit from the current global economic situation but the economical situation is hardly to blame for the lack of vision and structure that is at the root of all problems. Putting all the negative aspects aside of what an economical downfall does to a market or economy, what is also does is expose the mistakes companies make and make those errors of judgments twice as costly as usual. It’s Darwin meets Economics 101. Survival of the fittest applied to companies and institutions – only the strong survive. Better yet, only those capable of adapting to change quickly enough survive.
When we take a look at the impact of the crisis on eSports we saw several large entities get cut from the list of who is who within eSports. The ESWC, the CGS, Giga TV and MeetYourMakers/ESNation have all filed for bankruptcy and are now out of business. How could this have happened? Is the credit crunch the only reason behind this?
If you ask me, it is not the only reason these companies have gone bankrupt. Would they have gone bankrupt if there wasn’t a financial crisis? Probably. Most of the companies I mentioned would have probably failed even without the credit crunch ever happening. It’s simply a matter of wrong choices.
MeetYourMakers for instance was a phenomenal team with the best players in many games, but ended up spending millions of venture capital on sustaining the wages for all the staff and well endorsed players they had in their ranks, only claiming part of that back from sponsors and merchandising. They built a brand, truly a good brand, but went too big too fast and the entire eSport market couldn’t live up to it yet. The idea and the goals were there, the right choices were not.
Or shall we take a look at the ESWC, which, in my opinion was the best gaming event out there? The ESWC has done so much for eSports over the years, but their highly sponsor dependant business model was one that would not survive a hiccup of the economy. Lose your two main partners (Intel & Nvidia) and you will have an immense gap to fill, if you cannot fill it, it is game over. No matter how good your event, no matter how much the community loves it and no matter how much you have done for gaming in the past. I think the ESWC realized too late that the business model they were using was going to get out of control and was about to slap them in the face. The whole ESWC Masters concept was trying to prevent just that and should have been a regular flow of income for the ESWC but it came too late.
The CGS was a story on its own, with plenty of pencil strokes or keyboard strokes already discussing the topic and the reasons behind it. Some claimed they took the wrong games, some say they misjudged the eSport community and others claim the CGS was just a couple of years too early.
In all fairness though, the credit crunch is hardly to blame for the eventual downfall of companies due to faulty business models, bad judgment or a lack of vision.
But the positive things we should remember are the mistakes so many make are now clearly visible. We should learn from them and try to adjust in such a way that we won’t make the same mistakes again.
For me, the credit crunch is also showing us what eSports really needs to make it work: STRUCTURE. In all fairness to organizations such as the G7 and the different national eSports associations, we have only taken a couple of steps in our marathon of acceptance and mainstream-being. With a decent top-down structure tournaments will be done according to a standard set of rules and regulations, teams will have a reliable base to build a sustainable business model on and outsiders will know better what to expect when venturing into eSports. It gives the media a boost to follow the games and competitions more regularly and opens up the doors to a more mainstream acceptance of eSports.
But the high level of branching – everyone going their own direction - is killing the vision behind eSports and thus the structure. Everyone thinks they can do whatever they want and quite frankly, they can. Because the community lets everyone get away with it we see a new tournament/organization spring up every day, each thinking their way of doing things will revolutionize eSports. Perhaps it is because we haven’t found “the way” to move forward yet, that we are all struggling to find a path worth walking. Perhaps, even bolder, there is no “one way” to do things and we need to come to the conclusion that we shouldn’t allow ourselves to get side-tracked and we should focus on the bigger issue here: making eSports a viable option for mainstream companies to invest into.
Regardless of all the bad news getting thrown at us, gaming – and thus also eSports – is here to stay. The only thing we need to do is find the way to make it all work, and I have no doubt we will eventually get there.
Nice article :)
Keep it up dfb :)
Wherever you are in business at the moment people are seeming to latch onto 'credit crunch' as an excuse. In the industry I work in we've seen people crumble away. Where as others who are more prepared and pro-active have continued fine, or in many cases thrived on other peoples failures.
I see classic examples of this with companies in the vertical market I work within. Those that don't choose to invest in the future are now feeling the pain. Where as those that invested are buying up all the business that fall into administration.
E-Sports is still growing hugely. And with that we're seeing more and more people attempt to start their own org. As they approach sponsors it's easy for the sponsors to say they're not investing now because of the Credit crunch. When the fact is they're probably not interested in wasting money on an amateur org that'll last 2 minutes. Infused are a great example to back this point. They've taken on more sponsors the worse the economic situation has got. And from my point of view they've not become any more or less attractive as a marketing investment.
Wherever you are in business at the moment people are seeming to latch onto 'credit crunch' as an excuse. In the industry I work in we've seen people crumble away. Where as others who are more prepared and pro-active have continued fine, or in many cases thrived on other peoples failures.
I see classic examples of this with companies in the vertical market I work within. Those that don't choose to invest in the future are now feeling the pain. Where as those that invested are buying up all the business that fall into administration.
E-Sports is still growing hugely. And with that we're seeing more and more people attempt to start their own org. As they approach sponsors it's easy for the sponsors to say they're not investing now because of the Credit crunch. When the fact is they're probably not interested in wasting money on an amateur org that'll last 2 minutes. Infused are a great example to back this point. They've taken on more sponsors the worse the economic situation has got. And from my point of view they've not become any more or less attractive as a marketing investment.
This guys almost as intelligent as me
but MYM didn't go for bankrupcy, it was the company behind MYM ;)
This guys almost as intelligent as me
I'm honoured to be even classed as inteligent by such a great being as yourself.
edited 2009-05-12 10:45:27
Options for organizations are now to use their shop and bring that to new heights. Good example is SteelSeries with their "Credit Crunch" Pads. I know the Fnatic ones sold like butter!
Wherever you are in business at the moment people are seeming to latch onto 'credit crunch' as an excuse. In the industry I work in we've seen people crumble away. Where as others who are more prepared and pro-active have continued fine, or in many cases thrived on other peoples failures.
I see classic examples of this with companies in the vertical market I work within. Those that don't choose to invest in the future are now feeling the pain. Where as those that invested are buying up all the business that fall into administration.
E-Sports is still growing hugely. And with that we're seeing more and more people attempt to start their own org. As they approach sponsors it's easy for the sponsors to say they're not investing now because of the Credit crunch. When the fact is they're probably not interested in wasting money on an amateur org that'll last 2 minutes. Infused are a great example to back this point. They've taken on more sponsors the worse the economic situation has got. And from my point of view they've not become any more or less attractive as a marketing investment.
This guy's almost as intelligent as me.
Quite a complement!
99% of the eSports teams rely on sponsors. MYM relied too much on its private investors and using their money instead of sponsors money can be stupid.
99% of the eSports teams rely on sponsors. MYM relied too much on its private investors and using their money instead of sponsors money can be stupid.
When your spending as much as ESWC / CGS / MYM relying on sponsors is too risky. If they back down you wont find a replacement and you are screwed.
For smaller business' its less of a problem. Your comparing a few thousand euros support with hundreds of thousands.
edited 2009-05-12 17:36:19
When your spending as much as ESWC / CGS / MYM relying on sponsors is too risky. If they back down you wont find a replacement and you are screwed.
For smaller business' its less of a problem. Your comparing a few thousand euros support with hundreds of thousands.
MYM and CGS aren't good examples. MYM lived on their private investors and simply spent too much. CGS mainly relied on their TV views.
But currently there isn't another way to live on, SK, Fnatic all live on their sponsor incomes. You can use your shop, but that doesn't bring enough money. As long as you don't have eSports on tv, sponsors is what you have to live on.
Football also lives on sponsorships, ticket sales and clothing sells etc. That's why we need to get eSports to that level, but slowly and steadily.
Some indeed went to big, to fast, to soon, ... to late ?!
Learn from the mistakes and try to go forward slowly but steadily like Roychez said !
Good stuff this :)
99% of the eSports teams rely on sponsors. MYM relied too much on its private investors and using their money instead of sponsors money can be stupid.
didnt realise thats what they mainly relied on
When your spending as much as ESWC / CGS / MYM relying on sponsors is too risky. If they back down you wont find a replacement and you are screwed.
For smaller business' its less of a problem. Your comparing a few thousand euros support with hundreds of thousands.
MYM and CGS aren't good examples. MYM lived on their private investors and simply spent too much. CGS mainly relied on their TV views.
But currently there isn't another way to live on, SK, Fnatic all live on their sponsor incomes. You can use your shop, but that doesn't bring enough money. As long as you don't have eSports on tv, sponsors is what you have to live on.
Football also lives on sponsorships, ticket sales and clothing sells etc. That's why we need to get eSports to that level, but slowly and steadily.
Thats why eSport is so big in South Korea because they have TV show about Starcraft game and maybe WC3, and thats why player are idolated and so on !
That's the next step to make !