Who are the participants of the esports ecosystem?
1. Professional gamers (faker, Kuroky, pashaBiceps etc.) -
These are the individuals who are playing games for their teams and for perfection.
2. Esports organisations (Fnatic, Secret, TSM, Vici Gaming etc.)-
Companies or associations who are creating a professional environment for players.
3. Game publishers (Tencent, PUBG Corp. Activision etc.) -
Companies who are developing the games and hosting professional tournaments.
4. Event organisers (PGL, ESL, RFRSH etc.) -
Companies who host and sponsor the main (LAN) events and qualifiers.
5. Stream platforms (Twitch, Douyu, TV, Facebook, YouTube etc.) -
Esports enthusiasts can follow tournament streams on these platforms. They often purchase exclusive broadcasting rights from game publishers and there cases when they do direct agreements with players.
6. Sponsors endemic (ASUS, Intel, HyperX etc.) or non-endemic (Audi, Coca-Cola, Monster, Adidas etc.) -
Companies who are negotiating sponsorship agreements with teams and receive marketing value from them to sell their products (endemic) or make their products trendy and attractive (non-endemic).
7. Betting sites (Bet365, Betway, Unibet etc.) -
Gambling sites that are organising gambling opportunities for tournaments and receive and pay direct sums to esports fans.
8. Esports fans and enthusiasts. -
People who are following and watching tournaments and are willing to buy, ingame, cosmetic items, equipment or merchandised products.
How do I get into esports?
There are many ways to get into esports as an individual:
(A) Content creation (writing articles, creating photos and videos).
(B) Casting, streaming and creating videos (Twitch, YouTube, Facebook or traditional television).
(C) Professional player (being member of a professional team).
(D) Professional coach or manager (Having a paid position in a professional team).
(E) Tournament organiser (hosting events for gamers).
(F) Game tester (working on game development).
(G) Creative (graphic designer, video editor).
(H) Technical engineer (video technician, camera operator, network engineer).
(I) Analyst or expert.
(J) PR and/or marketing specialist.
(K) Back-office and IT staff.
(L) Lawyer (having a strong legal back-up is a must for big teams).
(M) Merch operators (Esports brands have a lot of merchandising opportunities).
(A) Content creation
You could be a member of a news site where you write and share on a daily basis. This is a good opportunity if you like to follow 'what happens in esports' and want to share it with other enthusiasts.
Alternatively, you could start you own site but specialise its content. You couldn't serve many games on your own as generally, an esport site requires 5-10 writers on a daily basis. You could produce 1-2 articles in a day plus 1-2 videos to share if you are doing it full-time.
To be honest, this is a great way to get involved in esports. You will meet a lot of people and build connections.
(B) Casting, Streaming and Creating Videos
There are two ways to produce live or broadcasted content:
1. Stream your own gameplay - In the age of live streaming, this is still a great if you have an unique play-style. Create your own brand on social media, post as many as many streams as you can and stream live up to 20 hours per week. After a while you will have the following to start generating revenue. However, this is not something that happens overnight. It could take years of work with little success at the beginning. Platforms you can stream your own game plays include: Twitch, YouTube, Facebook, Mixer etc.
2. Casting professional games - You could cast tournaments and events which help you build up your follower base quicker. However, in 2020, it is getting harder to obtain the necessary rights to do this as an individual. For example, the right for casting an ELEAGUE Major or ESL tournament could cost a huge amount of money for a certain language. The best way to build your career is to start with local events and then join a TV or broadcasting group in your country who can obtain certain broadcasting right on your behalf.
(C) Professional Player
Being a professional player means being the best at something. You need a lot of commitment to start a professional career. Today, there are several opportunities through higher education to find ways to support yourself during this long journey.
(D) Professional Coach or Manager
This is probably the hardest career path today. It requires the following skills:
- Strong insight into the professional esports scene
- A good understanding of game strategies and skill building (up to 5 years)
- Coaching personality, listening skills and a positive attitude in every situation
- Excellent communication skills and a willingness to initiate
If you have the above skills you should apply to be a coach or manager at existing organisations. In the esports landscape there are limited professional organisations. These include:
- League of Legends - 60-70 teams worldwide (including Rogue Warriors, SKT T1, Fnatic, Misfits, Rox Tigers etc.)
- Dota 2 - 35-40 teams worldwide including (Liquid, Secret, EG, Vici Gaming, Newbee, Virtus Pro etc)
- CS:GO - 45-50 teams worldwide including (FaZe Clan, Cloud9, Astralis, G2 Esports etc)
- FIFA - 20-25 organisations including (Schalke 04, Manchester City, PSG, Unilad etc.)
- Fortnite - 25-40 teams worldwide including (100 Thieves, Colud9, OpTic Gaming, Epsilon Esports, Ninjas in Pyjamas, Renegades etc)
(E) Tournament Organiser
This is a great way to get your start. If you have a proper venue or are part of of an event organising company, you can start small and host amateur or semi-pro tournaments. However, there are certainly some big brothers in this category:
- DreamHack (EU)
- ESL - ESEA (EU-US)
- PGL (EU-US)
- IeSF (South Korea)
- Activision Blizzard (US)
- Turner - ELEAGUE (US)
- Perfect World (CH)
- PlayIT (EU)
- Riot Games (Global)
- RFRESH (EU)
- FACEIT (US)
(H) Technical people
Technical people are the least visible in the esports world but they are the most experienced people at the tournaments. Their knowledge is difficult to learn and requires a lot of patience. They are invaluable working behind the scenes.
Being a part of any of the above roles will lead you to the world of esports. Remember to start with your own motivations and find your strengths.
(I) Analyst or expert
In esports events it is more and more common to have an expert who offers a great insight into the two team's strategy and not simply what we see on the map and what will happen next.
(J) PR and/or marketing specialists
Marketing and good PR is a must for every organisation. Finding the right marketing channels to reach fans and wider potential audiences is essential to every team. Controlling all the social channels, websites and advertising is fun daily work but takes a lot of experience and knowledge to do it in the right way.
(K) Back-office and IT staff
What if something goes wrong in the middle of a practice day? This is something the back office-office may handle in two minutes. These guys are expert in hardware and networks, the have a back-up plan for every occasion. In addition, they will help in. stock management.
A lot of teams are working with third party law firms but have having an in-house person who handles contracts and other legal matters is really useful. Legal knowledge is essential in every organisation and one of the best paid positions globally.
(M) Merch operators
Merchandise is a good income source for teams but requires a lot of background work. Creating and uploading new designs and handling the finances requires a full-time position.
How do I start an esports organisation?
1. Choose a game, create a vision and develop your brand
This where everything starts: on your desk and in your mind. Dream about the future and what you would like to achieve with your organisation.
- Choosing a game or games - if you would like to start a multi-gaming organisation, this is essential. You must find good players in the later stages, so you cannot create an organisation for a game in which you don't know the top players. Listen to your heart. Which game is your favourite?
- Creating a vision is something that you can talk about, a real vision could spread. You will enjoy sharing with others and that makes you credible in in other people's eyes. Write this down so you could read it again and again. If you forget your vision, it probably wasn't strong enough to begin with.
- Developing a logo and identity for the future organisation. This is a small step but it is a really important one. A logo could be put on a paper header in a e.g. presentation. Choose colours carefully but don't settle for some 'average thing'. Team visual identity reflects your professionality so it is important to find a designer for this.
3. Operative and legal work plus creating an organisation form
If your organisation is ready to go, the next step is incorporation. This is mainly legal work, opening a bank account
filling articles of incorporation, consulting an accountant and finding office space. All this is a must even if the office space starts out in your apartment.
Finally, if everything is settled, create a contract with your sponsors and ground your future negotiations.
4. Find your first team
It probably looks strange that it only the fourth point but in reality, your team could not do anything without an organisation. There are no sponsorships, contracts or winnings without your team.
You should lay down the most important rules for players at this point, like:
- income from sponsors is going to the organisation
- the organisation is responsible for scheduling and maintaining the gaming house
- when the team wins a tournament, what percentage of winnings goes to team members and what percentage to the organisation
- future bonuses
- other obligations like weekly branded streaming using sponsor's logos.
When you are recruiting, keep in mind that esports teams are based on respect for each other and CHEMISTRY. Skill is a important but not everything. Team members may resonate together when there is a job to do. Avoid negative personalities in teams.
You either want to put a team together or find an existing team. Either are hard as most esports are team based and it takes time to find the ideal line-up (chemistry).
5. The work is just beginning
No, this point is not the final step. All the effort you've already made is just the beginning. If you want to grow an apple tree it isn't the final step to plant the seed.
The real work is to develop the organisation alongside the team. Find additional sponsors and share your experience with existing ones. Everyone knows that growing an organisation from the bottom takes time but everybody needs to follow the processes. Future steps could be the following:
- Develop a practice schedule
- Decide on which competitions you are taking part in. Choose focussed competitions where you put extra effort into practice.
- Take part in local gaming related events (these events have low prize pools but they are important in terms of local fans and supporters which can lead to a future fan base on streaming sites and social media).
- Develop a marketing strategy (social media accounts, twitch accounts, basis of content generation). It is essential to generate measurable value sponsors.
- Find supporters or people who are willing to help with creativity, ideas and small tasks. They are also part of the initial fan base and this work could have big value later.
How do esports tournament organisers make money?
1. Selling tickets - If visitors must pay for an esports event like The International or World Championship in LoL, and a single day ticket is around $100-200, most of the ticket price goes to the event organiser. The organiser's goal in every event is to sell all the available spots.
2. Broadcasting rights - It is a common thing in the world of television but wasn't as common in the world of esports, until now. Big game publishers are negotiating constantly with streaming and television platforms to bring exclusive broadcasting rights together. This was the case between Blizzard (Overwatch) and Riot Games (League of Legends) and ESPN and Disney in 2018.
3. Name sponsors - For example, for an event called Intel Extreme Masters, Intel would have to pay a bunch of money to the organiser, for bigger events up to $100,000.
4. Exhibitor or stand fee - If a company has a physical stand at the event where logos and banners appear or the colleagues of the exhibitor are present, then they have to pay a fixed fee to the event organiser. This form of sponsorship is very common at gaming expos like DreamHack or PlayIT.
5. Other marketing - If there is a sponsored advertisement in an overlay or banner or online via a website, social media etc., they pay directly to the organiser. These are simple brand marketing or product placement tricks.
6. YouTube, Twitch or online banner sales - There is a lot of content made during a LAN event including match recordings, interviews and shows. After the YouTube upload or live stream on Twitch, the organiser could monetize it. The most common case is that marketeers are paying postgame based on viewership numbers.
7. Game publisher support - For example, Riot, Valve, Ubisoft etc. may pay a bunch of money to the organiser for preparing the on their behalf.
There are a lot of revenue streams but also costs. For an event the best organisers seek to maximise their ticket and marketing surface sales. And it really works, in 2020, esports events are skyrocketing.
How will the business of games evolve?
Business related to game publishers (i.e. Valve, Riot)
1. Improving micro-transactions and loot boxes - Yes, it is the biggest success of the 2010's. It was a genius who found out this 'trick' and saved the gaming industry. Today in 2020, more than half the income (Riot Games, Supercell) comes from micro-transactions and loot boxes. We can reveal several articles where game publishers became a little bit greedy in this manner and authorities like the European Union want to regulate this business model to be more predictable to for end users.
2. Breaking up 'big' games and selling them by episodes. One example: Forza Horizon is one of the most important game titles on XBOX One. The current version in Forza Horizon 3 and it has two extensions: Blizzard Mountain and Hot Wheels. The key is to sell them separately, not as one game.
3. Entering esports and hosting big events. Entering the esports scene and making success stories like The International (Dota 2) or the The Overwatch League could create wider avenue streams by enabling commercial streaming and the sale of airtime to advertisers.
Business related to gamers (professional or semi-professional players):
1. Prizes - Tournament prizes will improve in the next 10 years but the competition is very intense. Only 0.1% of players could realise gaming as real professional and generate sustainable revenue. This may improve to 1-2% in the next 10 years.
2. Teaching, co-playing and coaching - yes, this is a good option for those who like to teach and improve others.
3. Semi- or professional casting - If you have a unique personality, are a little bit exhibitionist, and have some courage, you should try this. Influence marketing is something new in the last five years. Big companies such as Microsoft are spending lot of dollars on marketing to enable YouTubers or Twitch casters to create branded content. It is a great way to reach 'tweens' and alpha-generation youngsters, selling them and their parents new products.
What are the top game streaming sites in the world?
1. Twitch (West, EU and CIS) - Amazon owned
2. YouTube (West) - Google subsidiary
3. Facebook Live (West) - part of Facebook
4. MLG (West) -Activision Blizzard owned
5. Douyu (East) - Tencent backed
6. Huya (East) - Tencent backed
7. Smashcast (West) - Azubu and Hitbox merged in 2017
8. Streamago (EU and East) - owned by Dolcer Group
9. Mixer (EU, West) - ownd by Microsoft
To be honest, there aren't many competitors in the Live Game Streaming industry. This may be because you need a lot of servers around the world to become a global player.
Do you need any copyright to stream tournament games on YouTube?
Yes, but not in every case.
If you would like to stream a Major or Minor League or any official event ending with LAN or online finals, the answer is yes, no matter what kind of game you are considering.
Today, when you would like to to stream or rebroadcast anything, you should obtain the necessary licences and broadcasting rights. These licences are very expensive even for bigger companies (starting from $10,000 for one event) and there is a lot of paperwork. It also includes the platforms, for example, there are a lot of Twitch/YouTube only tournaments which means Amazon or Google paid a onetime fee for broadcasting the event exclusively on their platform. In the case of ELEAGUE (CS:GO) matches, all channels are banned on Twitch, who are streaming in-game if they are not official partners of ELEAGUE. This means the company paid a lot of cash to Turner Broadcasting System, Inc.
if you would like to stream your own gameplay or a local online match, the answer is no. You should ask the event owner for permission.
Several years ago, it was a more unregulated field. But in 2020, there are a lot of big broadcasting companies who have entered the fray.
How do I invest in my esports organisation to get us known in the esports and gaming world?
Learn from the example of Team Secret. There is a smart, game-loving investor behind the organisation called Kemal Sadikoglu.
Kemal first found a talented and known player, Puppey, at the very start. An interesting fact: he si still the main decision maker in the Dota 2 team. Puppey helped to establish the team and they are still on top. Team secret developed a lot over the years with a talented manager, Cyborgmatt and from picking up dedicated coaches for teams. They have won seven game divisions including, Dota 2, Fortnite, PUBG and Rainbow Six Siege.
In a nutshell:
- Find a talented player who you can work with longterm.
- Enter into the top-tier tournaments and fight for glory.
- Build up your organisation step by step (coach, manager, sponsors etc) and don't try to be the best in every aspect at the beginning