E-Sports is volatile industry. Ask anyone who has been in the business for any significant amount of time and they will probably tell you something similar, perhaps coupled with a painful story. For all the fun, excitement, and entertainment it provides, e-Sports as a whole is significantly lacking when it comes to sustainable business models. This means we see a lot more failure than success, and even in the success stories we see struggles to keep up. As a thought exercise, I created a list of companies within the e-Sports industry who are successful and have operated over an extended period of time. My thinking was to identify key parts of these successful businesses that separate them from others. The results were simply staggering.
Not only is there not many long-term successful companies in the industry, even the successful ones are hard to differentiate from one another on a macro level – they all are doing relatively the same thing. Trying to look past this fact, I came across a startling common point when looking at arguably two of the most successful companies in the business. This realization was that the core of their business, what drives their ability to attract users and generate revenue, is leveraged via the unique technology they have developed. These companies could quite possible be more appropriately categorized as technology companies (read not e-Sports companies) who leverage the e-Sports industry to generate revenue.
The first company I want to discuss is arguably the most successful currently operating within this space today: Twitch TV. Before you head angrily to the comments, I know Twitch does more general gaming than just e-Sports, but the fact is much of the platform’s initial rise in popularity and continued use is due to the e-Sports community. As most people know, Twitch is a DIYS live streaming platform and community specifically tailored for the gaming scene. Their revenue, like most within the e-Sports industry, is tied to advertising.
Where Twitch differs from most, however, is that they do not directly generate content. Rather, they have built this technology platform that allows other people to generate content and are able to leverage the content their users’ create for ad revenue. Obviously, this is not the only revenue stream for Twitch. Without knowing the intimate details, it would be fair to say Twitch also probably generates revenue via partnerships, their new Twitch Turbo premium service, and external funding (private, venture, etc.) to name a few. Most if not all these methods though, are predicated on their ability to develop and maintain their technology platform for increased user engagement (which leads to increased advertising revenue).
The second company I identified was ESEA Entertainment. ESEA has faded out of the spotlight for many since the rise of the RTS and MOBA genres and the lack of a successful team based FPS (prior to the release of CGS:GO). Similar to Twitch, ESEA has developed a technology platform (their premium client) which they use to run leagues, ladders, anti-cheat, gather game statistics, and more. This technology drives ESEA’s operations and its premium subscription creates a solid revenue stream that isn’t solely based on advertising and sponsorships.
My purpose for highlighting these two companies is twofold. First, to highlight they are operating successfully, but in a different manner than most of the e-Sports industry. And second, to call attention to the realization that we as an industry need more technology. We pride ourselves for our progressive thinking that video games can and should be viewed as sports, yet we are woefully lacking in the support technologies for managing leagues, running live events, coordinating team operations, and more. Sadly, most of the businesses within the industry easily fall under the “content creator” label in which they produce some form of content and try to earn revenue from the content they produce. Not only is the industry over-saturated with this type of offering, but many of these content creators’ operations are severely lacking compared to their “real world” counterparts. Don’t believe me? Here are two simple exercises for you:
1) Go to your favorite league, show, team, website, etc. that produces content and evaluate how accessible their content is across different device platforms. Most these producers have horrendous multi-device support – if at all – compared to similar producers within “real” sports.
2) Again, visit your favorite league, show, team, website, etc. and evaluate how accessible their branding/logo assets and guidelines are to the general public. Needless to say, I wouldn’t hold my breath – most simply don’t have these assets and guidelines available.
The simple truth is the e-Sports industry isn’t nearly as progressive as we like to believe, and one of the major areas in which we are lacking is our technology. We need more coders, designers, and engineers building technology for e-Sports and less of a desire for the same cycle of monotonous content production outlets.
Looking back at Twitch and ESEA, despite their operational stability both companies face their own challenges. As previously mentioned, ESEA needs to find a way to expand its operations in an age where the team-based FPS genre is not dominant. Meanwhile, Twitch has struggled with changes in ad rates, partner payouts, and an inferior European network compared to their North American counterpart. But perhaps what is most egregious is Twitch’s severely lacking mobile development, especially on the Android platform. Although they have recently promised a renewed commitment to Android development and even opened a new beta program, it seems extremely odd that a content delivery platform such as Twitch wouldn’t be more focused on mobile accessibility across the board.
To that end, I decided to spend a few hours of my own time over the last few days to create a concept design for a new Twitch android application. My approach was simple: design a basic framework for a Twitch application which could handle substantially more functionality. You can find my concept designs below. In conclusion, I’d strongly implore those looking to get involved within the e-Sports industry and those already working within it to think about the things I’ve mentioned here and ask yourself if you could benefit from better technology and operations.
The following are simply concept designs and I have no direct affiliation with Twitch TV. Any logos, assets, brands, or other materials used below are copyright their respective owners.