The picture for The International 2017 is rapidly coming into focus.

In late March, Valve confirmed that the world’s largest annual Dota 2 tournament would be taking place August 7-12 at KeyArena in Seattle. That’s where it has resided for the past four years. Tickets went on sale via Ticketmaster on April 4.

With the stage set, all eyes now turn to the prize fund. Traditionally, Valve seeds $1.6 million toward the prize pool, and then raises the rest via digital compendium or Battle Pass purchases, with a portion of the proceeds added to the prize pool.

Last year, the campaign generated a record-breaking $19.17 million, vaulting the total prize pool to over $20.7 million.

Can lightning strike twice, or was The International 2016 as good as it gets?

Growth of The International slowing

From the looks of it, the prize fund potential of the The International is nearing its apex.

The International began growing in 2013, which was the first year that Valve allocated 25 percent of compendium purchases toward the prize pool. But it wasn’t until 2014 that the mechanic really caught on, with the prize pool climbing a staggering 280 percent to $10.9 million.

2015 saw another large jump, up 69 percent to $18.4 million.

Last year, Valve adjusted its campaign model, replacing the Compendium, which had been a staple of the campaign from 2013 to 2015, with the Battle Pass. However, the differences between the two were somewhat nominal.

Popular features, like the Immortal Treasures and the Collector’s Cache, were carried over.

In 2016, the prize fund for The International grew by a scant 12.7 percent, representing the smallest margin of growth since Valve began adding player contributions to the prize pool.

Many variables at play

Based on historical trends, it looks as though the prize fund for The International 2017 will remain relatively flat year-on-year. If the stars fail to align, it could even be headed for a slight decline.

Still, there are a number of variables that lead us to believe The International could see modest-to-moderate growth:

• In the lead-up to Valve’s campaign, Dota 2 will have momentum on its side, thanks to the currently running $3 million Kiev Major. The event will rank in the top 10 esports prize pools of all time.
• The International 2016 set new benchmarks for viewership. According to TrackDota, over 5.7 million spectators watched the event across DotaTV and various streams.
• The International is still the biggest event on the esports calendar, and not by a small margin. It’s responsible for the three biggest prize pools in esports history. The fourth biggest? The LoL 2016 World Championship, which clocked in at $5.1 million — or just over a quarter of the prize fund for last year’s International.

That being said, Dota 2 is a somewhat antiquated game, having been officially released on Steam nearly four years ago, and in the public eye for six. The product is clearly showing its age. The number of average concurrent players is significantly down over the past 12 months.

According to Steam Charts, Dota 2 averaged 548,413 players for March 2017, representing a year-on-year decline of 20 percent. The peak number of players was down nearly 300,000, from 1.248 million to 956k.

The last time Dota 2 peaked at less than one million players during a calendar month was in December 2015.

These statistics bore poorly for The International 2017’s prize pool. Campaign purchases are designed exclusively for players of the game. Put simply, there is likely a strong correlation between the number of players and the amount of Battle Pass purchases.

All this said, Dota 2 is hardly a “dead” game, with 12.7 million unique actives in the past month alone.

It may all come down to Valve

With variables working for and against The International 2017 campaign, the fate of The International 2017’s prize fund may boil down to how Valve runs its fundraising campaign.

Valve took an exceedingly aggressive approach to its 2016 campaign, surprising players with a multitude of special events, including a weekend sale that results in a major uptick in player purchases.

The Valve braintrust will probably need to keep its foot on the accelerator just to keep pace with the 2016 campaign. Should it scale back on its giveaways and special events, then a year-on-year decline becomes a much stronger possibility.

Reason being, this year’s campaign doesn’t look like it’ll be a particularly long one. In 2015, the campaign stretched nearly 100 days, compared to just 87 days in 2016 — which may explain away a portion of the less impressive growth.

At the time of this writing, there is only 108 days before The International 2017 concludes. Given that there has yet to be an announcement on when the campaign will begin, the assumption is we’re looking at a mid-May start — similar to last year.

With a tight campaign schedule, Valve better get its creative juices flowing, and fast.

Beginning 10 a.m. PT on August 8 and continuing through August 13, Seattle’s Key Arena will play host to the biggest esports competition in industry history.

The International Dota 2 Championships will feature a prize pool of more than $20 million, making it the first esports event to eclipse the eight-figure barrier two times over.

The new record replaces the one set last year by the same event. In 2015, Valve’s annual crowdsourcing campaign, combined with the company’s own $1.6 million contribution, created a nearly $18.43 million prize fund.

Yet, now that a new benchmark has been set, the question remains: Will The International continue to set new high-water marks year after year, or have esports prize funds reached their apex?

Predictions vs. reality

Back in early June, we predicted that in a base case scenario, The International prize fund would come in at just under $20 million. With five days left in the campaign, the tournament has defied that expectation — but not by as much as we would have thought given the circumstances.

Data collected from International tracking site dota2.prizetrac.fr shows that this year’s campaign was only faring marginally better than last year’s at the 45-day mark. It was then that the 2016 campaign received a much needed boost via a cleverly timed Weekend Sale.

Over the sale’s four day duration, the prize pool spiked $2.4 million. For perspective, the campaign had generated under $600k the four days prior.

In our predictions, we mentioned that Valve would have to make at least one surprise announcement for the campaign’s prize fund to reach our bull case estimate of $21.4 million.  The Weekend Sale certainly qualified, and by the 50-day mark, we began to question whether or not the bull case estimate was too conservative.

That concern has since been put to rest, as since the the Weekend Sale’s conclusion the 2016 campaign has followed a similar trajectory to last year’s. If anything, the release of Immortal Treasures III in late July was less impactful than anticipated, resulting in only moderately heightened sales for the first three days post-release.

The announcement of the Lockless Luckvase and Trove Carafe Immortal Treasures last week barely moved the needle, firmly suggesting that most campaigners were already satisfied with the amount of their contribution.

That said, last year’s campaign picked up a bit of steam in its final days. Assuming the same happens this year, our internal analysis shows that the final prize pool for The International will settle in at approximately $20.8 million when the three month campaign concludes on August 13.

That figure is more than half-a-million less than expected, despite Valve running a more aggressive campaign than even the most bright-eyed optimist would have anticipated.

The International growth slows

Declining year-on-year growth rates support the theory that The International is reaching its boiling point:

While it’s worth noting that this year’s campaign was nearly two weeks shorter, it’s unlikely the extra padding would have resulted in significantly increased contributions.

Reason being that players would have been more apt to space their contributions out if the campaign spanned say three-and-a-half or four months instead of three.

Other variables that suggest The International prize fund will level off:

• Dota 2 is a somewhat dated game. Although its official release date was in July 2013, the game was available in open beta for nearly two years prior.
• The campaign’s High-Water Mark challenge incentivizes players to set a new record each and every year, but not by so much that the next year’s goal becomes unattainable.
• Other multiplayer online battle arena (MOBA) games are popping up in abundance. Assuming just one of these breaks into the mainstream, it stands to put a dent in Dota 2’s popularity.
• Along the same lines, Overwatch, although not technically a MOBA, is taking the esports world by storm, and threatens to pull both viewers and top competitors away from the big three (Dota 2, CS:GO and League of Legends).

Viewership for The International tells a different tale

Yet, despite all the variables working against future campaigns, it’s impossible to deny the popularity of The International broadcasts on Twitch and other live streaming services:

At of the time of this writing, more than 425,000 viewers are watching Dota 2 channels on Twitch. By comparison, the maximum concurrent Dota 2 viewers for the entire month of July was less than half that amount.

More striking still: According to Twitch tracking site gamoloco, last year’s grand finale on August 8 only generated maximum concurrent viewership of 558,671 — just 24 percent more than what we’re witnessing midday during the quarterfinals round.

Suffice it to say, as the quarterfinals give way to the later championship rounds, last year’s benchmark should be blown away.

And Twitch isn’t the only way to watch The International broadcasts:

• YouTube, WatchESPN and Steam Broadcasting are all broadcasting the entire tournament live. The Steam broadcast alone is averaging hundreds of thousands of viewers.
• This year, Valve has introduced the Dota VR Hub, which as the name suggests, allows viewers to watch games and replays in virtual reality. It’s unknown whether how popular this viewing vehicle will be, as the system requirements for running the hub are exceedingly high.
• Players that purchased a Battle Pass this season have effectively booked a ticket to watch the tournament in-game. Watching in-game affords viewers complete control of their viewing angle. Battle Pass owners can also make predictions on matches, with winners receiving battle points and prizes.

Still, heightened viewership doesn’t necessarily equate to increased sales. Although the spike in popularity should have Valve feeling comfortable with that next year’s campaign will at least be on par with the 2016 effort.

First place prize stacks up with major sporting events

If there was ever a question as to the popularity of esports and esports betting, naysayers needn’t look much further than the first place prize of The International compared to other major sports and gaming events:

Considering that Dota 2 teams are comprised of five members each, winning team members will receive a larger sum than the winner of the Daytona 500, and nearly as much as the PGA Championship victor.

Only the WSOP Main Event champ will take home significantly more.

Image credit: Dota2.com

Just a few weeks back, doubts lingered as to whether The International 2016 prize pool would eclipse last year’s record-breaking mark.

Thanks to a clever, and somewhat unexpected marketing scheme by campaign runner Valve, those doubts have been quietly put to rest.

Weekend sale prompts massive uptick

In early June, we predicted that it would take a surprise announcement by Valve for the prize pool of the year’s largest Dota 2 tournament to shatter last year’s high-water mark of $18,429,613.

That announcement came on June 30, by way of an extended weekend sale on Battle Level Bundles that was so generous, it sparked the single biggest sales surge of any mid-campaign announcement in the campaign’s four year history.

Data provided by dota2.prizetrac.kr:

Players who participated in the event received:

• 50 Battle Levels
• 2x Immortal Treasure I
• 2x Immortal Treasure II
• 2x Collector’s Cache

The weekend package cost $14.99 total, representing a 60 percent discount. For perspective, under normal circumstances the purchase of 48 Battle Levels alone will set players back $19.98.

Prior to the blowout, the prize pool was ticking up at a rate of approximately $100k – $200k per day.

On Day 1 of the sale, it surged by just over $1.1 million. And by the time the final bell rang, the sale — which neatly coincided with The Steam Summer Sale — bolstered the prize pool by just shy of $2.4 million, in only four days.

As it stands, the weekend sale is proving the difference maker between a rather pedestrian campaign struggling to reach new heights, and one that at nearly $18 million with several weeks left to go, should easily eclipse the $20 million threshold.

No longer a question of ‘if’ but ‘by how much’

With a new record all but certain, the question becomes: “By just how much will The International 2016 prize pool beat out last year’s mark?”

In the past week, the campaign has averaged $85,000 in prize pool contributions per day. Extending that average out over the remaining weeks of the campaign, we arrive at an estimated $19.94 million.

However, there are two wrinkles that should push the prize pool higher than this figure. The first is the reveal of the Immoral Treasure III package.

Three weeks ago, Immortal Treasure II facilitated a nearly $900k two days sales surge. History tells us that Immortal Treasure III will spark a more subdued uptick than its predecessors, but still an impactful one nonetheless.

Also, we expect momentum to pick up over the next few days due to Valve’s inclusion of a new community challenge for 2016:  the High-Water Mark. Should the prize pool of this year’s International eclipse last year’s, players will receive a bevy of rewards, including three Trust of the Benefactor treasure rewards – each of which will offer a chance at ultra rare, limited-run items.

Already, the High Water Mark is impacting sales. Just last weekend, the prize pool was only growing by approximately $70k per day, but in the last two days it’s averaged $120k. Expect this growth rate to accelerate daily until the record falls.

Together, these two variables paint a picture of a $21 – $22 million final prize pool, which is more or less in line with our original bull case estimates.

That being said, it’s plausible that Valve has one final curveball in store for its contributors that could vault the final tally to as high as $24 million.

Paddy Power taking bets on International prize pool

Paddy Power, one of a growing number of online sportsbooks to offer esports betting odds, is now accepting wagers on the final International prize pool. The wager is categorized under Dota 2 TI 2016 Futures.

From this category, players can also wager on the outright winner of the tournament. Betway is also taking futures on the final outcome.

As somewhat expected, Paddy Power’s highest confidence intervals for the final prize pool are in the $20 – $22 million and $22 – $24 million ranges — both of which offer players betting odds of 17/10.

The $18 – $20 million and $24 – $26 million ranges are somewhat less expected, but far from long-shots, coming it at 4/1.

The release of the Immortal Treasures II package last week sparked a short-lived sales surge of Battle Passes and Levels, propelling the prize pool for The International 2016 above $14 million.

Thanks to the uptick, the fund for the calendar’s most prestigious Dota 2 tournament still remains on pace to break the $18.43 million record set in 2015.

But the gap has closed considerably, and what initially looked like a runaway race has turned into a dogfight.

New record no longer a certainty

As of the time of this writing, Valve‘s crowdsourcing campaign has generated a prize pool of just over $14.25 million – approximately $700k more than what was collected 44 days into last year’s effort.

When we last checked in , the disparity was significantly larger – nearly $1.8 million. However, that figure was an aberration caused by this year’s early release of the Collector’s Cache.

In other words, the reason the 2015 effort has effectively “caught up” in the past two weeks is because current year-on-year comparisons account for the release of the screamingly popular cache in both years.

The chart below (data via by dota2.prizetrac.kr) illustrates this trend:

Notice that the release of the Immortal Treasures II package on June 23 resulted in a sales uptick, albeit a much smaller one, of its own.

On the day the treasure was released, the prize pool surged nearly $625k, and in the week since, the fund has swelled by $1.67 million. The latter figure represents a week-on-week growth margin of nearly 250 percent.

Impressive, but hardly enough to fend off the the 2015 campaign from reclaiming the lead.

At least one more reason to be hopeful

Campaign watchers can expect another sales spike in the coming weeks when the final Immortal Treasure package is released.

Historically, big reveals that fall near the tail end of the campaign have not performed as well as those that came before. To wit, last year’s Immortal Treasures III release was the least influential of the three, prompting just $210k in campaign contributions on its first post-launch day.

However, this year’s data shows that Immortal Treasure releases are having a more notable impact, so much so, that $500k in first day contributions do not appear out of the question.

There are two other wildcards that may or may not facilitate a sales surge:

• As of Wednesday, the roster for The International 2016 is nearly set. Increased media attention and hype could very well translate into heightened Battle Pass sales.
• One of the campaign’s stretch goals is the High-Water Mark challenge, which rewards Battle Pass holders with added treasures, pending this year’s prize pool eclipses the 2015 fund. It’s plausible that momentum will build as the prize pool inches closer to last year’s mark.

On the flip side, the 2016 campaign is considerably shorter than last year’s effort. It will officially end on August 11, 87 days after it began. Last year, players had 93 days to contribute to the campaign.

The International roster takes form

Now that The International qualifiers have concluded, 14 out of the 16 competing squads are known.

Six teams bypassed the qualifiers by receiving direct invites. They are:

• OG
• Team Liquid
• Newbee
• LGD Gaming
• MVP Phoenix
• Natus Vincere

More details here.

ESports aficionados will readily recognize the names of most of the eight qualifying teams:

• Team Secret
• Alliance
• Wings Gaming
• Vici Gaming Reborn
• TNC Gaming
• Fnatic
• Evil Geniuses
• Digital Chaos

Four wildcard teams will compete for the final two tournament spots. Last year, a wildcard team (CDED) went on to the finals, before losing to reigning champion Evil Geniuses 3-1.

Evil Geniuses won $6.6 million for its first place effort, but due to a team roster change during the Manila Major, were excluded from a direct invite.

Exactly one month after Valve went live with its annual crowd-sourcing campaign for The International 2016, enough Battle Passes and Levels have been purchased to send the prize pool over the $12 million mark.

So far, the fund for the annual Dota 2 tournament remains firmly on stride to crack the record of $18.43 million set last year.

Yet, whether or not the campaign actually succeeds in setting a new high-water mark remains largely in question, with the first clear picture not emerging until next week.

Year-on-year comparison not apples-to-apples, yet

Last year’s campaign managed to raise $10.22 million after 31 days, placing it nearly $1.8 million off the 2016 pace. On it’s own, these figures suggest that this year’s prize fund will easily coast by last year’s marker.

But as we observed in last week’s analysis, there’s more to the story.

Based on tracking data collected by Matthew “CyborgMatt” Bailey, it was only few days ago that the 2016 campaign was outpacing the 2015 iteration by over $2.3 million – a full half-a-million more than it is currently.

And from the looks of it, the gap is about to shrink a whole lot more.

That’s because the widely popular Collector’s Cache, which historically inspires a sales surge only outdone by the initial blast, wasn’t released until Day 36 of last year’s campaign, as opposed to Day 20 in 2016.

Note on the graph the influence of the 2015 Collector’s Cache – the prize pool ballooned nearly $2 million in the first four days after release, as opposed to just a $500k climb in the four days leading up.

Now, consider that on June 15, the current campaign generated just $112k, down from $189k four days prior. Even in a somewhat optimistic scenario, where the daily contributions stabilize, the 2015 campaign’s trend line will “catch up” with the 2016 line by Day 43.

That is unless Valve provides consumers with a little extra incentive, which seems inevitable.

Immortal Treasures to the rescue?

Last year, the introduction of two Immortal Treasures temporarily vaulted sales. They didn’t have quite the impact as the Collector’s Cache, but sales did increase four-fold immediately following the reveal of the first Treasure, and approximately two-fold after the second.

From the looks of it, Valve has a total of three Immortal Treasure bundles in line for 2016 – only one of which has been revealed. Therefore, it wouldn’t surprise to see two minor sales spikes in the coming weeks.

Factor in the High-Water Mark challenge, which grants Battle Pass owners three Trust of the Benefactor rewards should the final prize pool stamp out the existing record, and we’re still of the mind that this year’s prize pool will break new ground.

That said, it may take the combination of very attractive Immortal Treasures and a late-game surprise for the fund to push all the way past $20 million.

What does Valve stands to gain?

Besides prestige and heightened brand awareness? Money, and a whole lot of it.

Only 25 percent of Battle Pass and other associated sales goes to prize fund. The other 75 percent presumably goes to Valve for hosting the tournament.

Factoring in the $1.6 million Valve allocated to kickstart the campaign, the digital distribution company has already made just under $30 million from this one vehicle alone.

Not bad for the first month of a nearly three month long campaign.