Hulu and the ESL
The deal includes four new esports series from the ESL that will be provided to Hulu. It’s also Hulu’s first foray into the esports space.
“The partnership with Hulu marks ESL’s first original series on an on-demand streaming service, and will showcase the diverse nature of esports through high quality storytelling,” said Nik Adams, Senior Vice President of Global Media Rights and Distribution for ESL.
“Esports appeals to a younger, more digitally savvy audience so Hulu is a perfect platform to build out our original content and expose the world of esports to new audiences.”
All the new series will premiere exclusively on Hulu later this fall.
More on the new ESL series
Here is how ESL described the new series it is providing for Hulu:
Player V. Player
A gamified debate show with casters and esports influencers facing off over the hottest topics in esports. Panelists accrue points while debating both newsy and big picture topics for ultimate bragging rights, with a final challenge over a classic video game.
The result is an urgent, passionate conversation amongst signature esports personalities, connecting communities while also pitting them against one another.
A weekly docu-series following The Immortals, a top CS:GO team, as they rebuild their roster leading up to IEM Oakland, one of the premier esports events in North America that takes place on Nov. 18-19 at Oracle Arena. With the tournament just weeks away, and currently three players short of a full team, The Immortals must find new talent and quickly build a cohesive team.
Bootcamp will follow The Immortals through the extensive process of player evaluation, testing and trials until they finally find the perfect players and then race to get ready for IEM Oakland. The series will also give unprecedented access to the inner workings of a professional esports team, with scrimmages and practice sessions at the team house as they formulate a new strategy and build team chemistry.
Dive deep into the most impactful moments in esports history with passionate casters and analysts explaining what made these moments so monumental. Defining Moments will cover many of the top games and fan the flames of ongoing debates about these plays.
Each episode is centered on a specific theme for the week, whether trick-shots and insane reflex skills, controversial moves and their impact on gaming history, or long-lasting rivalries and how they came to be. The series will feature in-depth interviews with game designers, teammates, fans, rivals, even sports scientists assessing reaction speed – anyone who can add to the story of defining moments in esports.
A fast-paced, condensed, documentary-style recap of the most memorable moments from four of the biggest multi-day esports tournaments in the world, including in-depth analyses and behind-the-scenes footage not part of the tournament live stream.
A never-before-seen view of the tournament that will entertain those who watched the full tournament and those who missed the action and want to see what they missed. Each episode of Replay will be edited and aired within a week of the live event.[show-table name=betway]
Much like the world of traditional sports, esports revolves around live action. Coverage of matches and tournaments — and analysis before and after those events — is the focus of most content and streaming providers.
But there is a bit of a vacuum when it comes to curated or produced content outside of those events. Yes, live streams, podcasts, etc. abound, but the new ESL series should represent an upgrade over much of that.
“Esports is one of the fastest growing areas of media and entertainment, and, through this first-of-its-kind deal with ESL, we can now bring the popular world of esports to Hulu,” said Lisa Holme, Vice President of Content Acquisition for Hulu. “We know our viewers, especially those watching Hulu on consoles, are hungry for this type of content – so we’re excited to offer it on Hulu for the first time.”
The model being given to Hulu is not unlike what we have seen work well in the traditional sports media. Player v. player is much like the debate shows you see on ESPN and beyond. Behind-the-scenes reality shows like Bootcamp have done well in the sports space.
VOD streaming services are constantly looking for ways to differentiate themselves, and dedicating some bandwidth to esports would seem to be a smart move.
Image credit: Casimiro PT / Shutterstock.com
The Esports Integrity Coalition (ESIC) has welcomed the results from its first-ever survey of community attitudes to sanctions for being caught cheating, which showed that the majority of respondents agreed with the organization’s view that lifetime bans for those caught cheating are inappropriate.
Commissioner Ian Smith said he had some sympathy with those who believed in banning competitors caught cheating from ever taking part in tournaments.
But he told Esports Betting Report: “It just happens to be the case that I don’t agree with that and, in light of the survey, neither do the vast majority of the community.”
There was controversy this week in the wake of the news from ESIC after league organiser ESL — a founding member of ESIC — moved to change its line on sanctions in the wake of the survey’s publication.
In particular, this meant that the ex-IBUYPOWER players previously serving indefinite bans dating back to a cheating scandal from August 2015 now had those bans lifted.
In its analysis of the sanctions survey, ESIC explained that it was clear from many comments that there were a “significant number” who felt that the IBUYPOWER ban and other historic match-fixing cases were too harsh.
“While a significant number of comments support lifetime bans for such activity overall, many more are critical of the publisher’s (Valve) decision in these cases.”
ESIC said its reasoning on lifting previous indefinite bans and allowing players to continue with their competitive careers from August 1, was that though the players were clearly culpable, the rules were not clear at the time, no education had been provided and the procedures used were not transparent and “did not comply with the principles of natural justice.”
Ball in Valve’s court
It remains unclear what Valve’s response to the sanctions survey will be. Ulrich Schulze, senior vice-president of product at ESL, said: “All of these adjustments do not apply to bans and punishments issued by Valve directly though, which will still be in place for all Valve-sponsored tournaments run by ESL, such as Majors.”
Smith pointed out the new measures were only “recommendations.” But he does believe that the publishers – and “any other group with competent jurisdiction – should be engaging on with ESIC, the leagues and the teams on these issues.
“Some consensus and consistency is desperately needed across the industry to boost credibility and trust in the system,” he said.
He added he was happy that some clarity had been gained. “I didn’t want to make recommendations in a vacuum or impose my view on the community or the independent ESIC disciplinary panel – I was hoping the community would deliver both consensus and validation and, to a very large extent, they did.”
‘Worrying’ attitude towards match-fixing
One aspect that ESIC and Smith said was of particular concern from the survey was the discrepancy between attitudes of those who took part in the survey who saw match-fixing as a lesser offense compared to cheating to win.
Just under 20 percent of respondents believed a lifetime ban should result from match-fixing at a LAN event. More than 57 percent believed the same for cheating to win using hacks or cheats at the same type of event. Only 20 percent believed a ban for cheating to win should be two years or less. Meanwhile, over 36 percent said the same relatively lenient punishment should stand for match-fixing.
Selected survey results
Cheating to win using hacks/cheats/software – pro/semi-pro player (over 18) – LAN Event
- Lifetime ban 57.14%
- Two years or less 20.54%
- Four years or less 14.68%
Cheating to lose – match-fixing (deliberately underperforming to manipulate the result to commit betting fraud) – pro/semi-pro player (over 18) – LAN Event
- Two years or less 36.25%
- Lifetime ban 21.42%
- One year or less 19.35%
ESIC reiterated that it believes match-fixing to be just as serious and added that it was “committed to engaging with the community to try and persuade them that their current perception ought… to change.”
“We will do our best to inform the community about the very real and serious threat to esports posed by betting fraud and match manipulation,” ESIC added. “It is ESIC’s position that match-fixing offenses should attract at least the same level of punishment as cheating offenses based on the experiences of traditional sports.”
Smith added that he wished there had been more responses from participants outside of the CS:GO community, which accounted over 90 percent of the 7,544 responses. “I would also have liked a wider spread of games, but I think I need to rerun the survey in a few different languages to catch the other communities better,” he said.
Future sanction recommendations
- Cheating: Sanctions to include disqualification from the tournament, results voided, forfeiture of prize money or a ban between two years and lifetime.
- Match-fixing/betting fraud: Sanctions to include results voided, five-year ban (unless there are significant mitigating factors) forfeiture of prize money and monetary fine (if discovered before the end of a tournament, disqualification).
- Doping: Sanctions to include results voided, ban of between one and two years, forfeiture of prize money (if discovered before the end of a tournament, disqualification).
- Competition manipulation and bribery: Sanctions to include results voided, ban of between one and two years, forfeiture of prize money and monetary fine (if discovered before the end of a tournament, disqualification).
Betradar has struck a deal with DOJO Madness which enables the company to provide live odds “across a whole range of online and offline esports competitions.”
Betradar’s Head of Esports James Watson said:
“We were always clear that esports live betting provided a great opportunity to invigorate the market, but we weren’t prepared to rush in at the cost of our, and our clients’, reputation.
Across all esports, the complexity of the games and the huge volume of data that needs to be captured and processed makes it much more challenging to model than traditional sports.
DOJO Madness provides sophisticated big data-based tools that help gamers master their play.
DOJO Madness CEO Jens Hilgers commented:
“Our core competency at DOJO is collecting and interpreting esports game data. Our coaching apps, such as LOLSUMO, are prime examples of how we create real value through our data services.
Bringing our big data expertise into the esports betting industry was a natural fit, and partnering with Betradar is a fantastic opportunity for us.”
It is the big data capabilities of DOJO Madness that Betradar seeks to harness in support of esports betting:
“DOJO’s service has developed complex models based on the analysis of over 450,000 rounds and 18 million individual data points.
This has enabled the generation of reliable real-time probabilities for both pre-match and live betting events, allowing Betradar to provide its operator clients with the most credible live betting offering available.”
CS:GO will be the first game to benefit
He sees that the esports betting industry has suffered because of the substantial delay between when live events happen and when that information is available to esports betting operators.
The gap opens the door to the possibility of fraud, and reduces the quality of the bettor’s experience.
Watson told ESBR that the deal was a great match up between “DOJO Madness’ experience of esports and esports data and Betradar’s experience and knowledge in the odds provision market.”
Dota 2 and League of Legends to come in the New Year
The addition of DOJO Madness data will enable Betradar to offer extra live betting odds for other esports as soon as they can be integrated with the Betradar product line.
Dota 2 and LoL products should be launched early in the New Year.
Overwatch betting is also in development.
Deal deepens the relationship with ESL
As part of the deal, ESL and Betradar used their complementary skills to provide a new product line that offers “all the tools needed for operators to create their own eSports betting offer.”
DOJO Madness founder Jens Hilgers is the founder and chairman of Turtle Entertainment/ESL.
James Watson explained that the DOJO Madness deal would enhance the partnership between Betradar and ESL:
“We’re delighted to have been able to partner with industry-experts at DOJO to create a best-in-class approach, further enhancing the exclusive fast content from our partnership with ESL – we have really created a new and unique framework that will greatly benefit operators.
From today, they will be able to tap into the demand for comprehensive live coverage with the ideal range of Betradar services to support them alongside the best content and odds suggestions.”
The advantage for esports betting operators
The new products which Betradar is developing as the result of the deal should provide esports betting operators with the ability to offer a much wider range of betting options to their customers.
Reducing time lags between live events in an esports tournament and online odds provision will diminish fraud risks and provide a real-time experience for esports bettors.
Watson told ESBR that operators would be able to offer round by round bets that have “never been seen before.”
The deal is set up for the long term – “at least 8 years” according to Watson. Esports betting operators should see this as one more step towards fulfilling the potential of esports gambling.
It may not be very long before the esports betting offer matches both the quality and breadth of the offers available for traditional sports.
The Overwatch League is being structured for the long term, Blizzard describes it as “a world-class sports ecosystem for professional Overwatch competition.”
Mike Morhaime, CEO and co-founder of Blizzard Entertainment said:
“The Overwatch League represents not only the pinnacle of Overwatch competition, but also a genuine career opportunity for the most skilled Overwatch players.
We’re building a league that’s accessible to players and fans, sustainable, and exciting for everyone involved.”
Overwatch League includes infrastructure features for sustainability
The key features represented in the Overwatch League show that Blizzard is creating more than an additional esports league, it is building a template for the future development of the esports industry.
Making global gaming a local event
The internet’s most important characteristic is that it is a truly global system. At the moment, esports teams compete both on the internet and in tournaments held around the world—they are not geographically tied to a specific location.
Blizzard’s plan for the Overwatch League will see investors bid to own teams which will represent individual cities throughout the world.
In this they are replicating the traditional sports model where local sports teams such as the Chicago Bulls, Manchester United or the Washington Redskins take their identity from their home town.
In effect, Blizzard will be in control of granting a team franchise for each city:
“Once these city-based teams have been admitted to the league, their spots will be secured, giving them the best opportunity to grow and thrive for years to come.”
Players get minimum salaries and a career path
At the beginning of each season, Blizzard will host a draft called a combine where players will be invited to try out for teams. A series of standardized evaluations will rank players allowing teams to choose the best to fill their rosters.
Blizzard says that:
“Anyone picked up by a team during the signing period will be guaranteed a contract that includes a baseline minimum salary and benefits package.”
While there is nothing specific in the Blizzard press release, it looks like Blizzard will be managing issues such as game fairness, discipline and pretty much all other supporting areas itself.
What Blizzard is creating is an esports ecosystem that can be just as readily used for other games. It is an ecosystem outside the authority of any governing body other than Blizzard itself.
In-sourcing or outsourcing esports leagues
Getting above the excitement of a new esports league, the template that Blizzard has outlined allows industry analysts to see two possible models for the future of esports.
In one, the game developer owns and manages the league. In the second, exemplified by companies such as ESL, a third party runs the league in cooperation with the game developers.
The big question investors will want to answer is will one model win out, or can both models co-exist?
The developer has intellectual property rights and the power to control who, what, where, when, and how any esports adaptation of its game is implemented.
The Overwatch League is a model controlled and executed by the game developer. In establishing its own league for its own game, Blizzard is retaining complete control.
The most successful esports tournaments are currently run by ESL, a subsidiary of Turtle Entertainment, itself a subsidiary of the Modern Times Group (MTG).
MTG is a broadcaster in the entertainment business, not a game developer per se. In putting on the wide range of tournament festivals in which ESL has become an expert, the company works with game developers, but has no ultimate control over its business.
ESL’s success depends on renewing contracts as the result of providing a service better than the companies can themselves. In effect, the game developers are outsourcing to ESL because it has developed the competence to run successful tournaments and leagues.
Are both models sustainable or will one be left behind?
If all game developers followed Blizzard’s lead, ESL and other league organizers would face an existential threat to their businesses.
In practice, the two business models are more likely to co-exist satisfying different areas of the market.
The corporate competence is not easy for game producers to develop or to match. Blizzard may be big enough to run an Overwatch league as a business vertical in-house, but many other game developers will be happy to outsource this expertise to third parties.
The bigger companies such as Blizzard will continually face such competition while they try to maintain the popularity of their own offerings.
Zynga was once dominant, but over the last few years its business has had to face massive competition, the effect exacerbated by the company’s slow adoption of mobile gaming technology.
The gaming industry may consolidate further over time, but technological innovation will always leave space for entrepreneurial challengers. They will value the services that companies like ESL can provide in helping to bring their games to a wider audience.
Even the big gaming companies may decide not to follow Blizzard, preferring to keep their business focused where they have the expertise to protect their competitive advantage.
The half hour special, “Gamer Gods: Team Liquid,” will go out to Fuse TV’s “fast-growing, Latino and multicultural 18-34 audience.”
Fuse is available in over 70 million US households.
Team Liquid Co-CEO Steve Arhancet said:
“By partnering with Fuse, Gamer Gods: Team Liquid allows the Team Liquid community unprecedented, behind-the-scenes access to the team’s preparation and training.
Giving viewers the opportunity to see the stress the players place on themselves to be successful and the sheer amount of effort that goes into competing at this level, is extremely compelling.”
ESL One New York was Fuse TV’s first step into esports
Fuse TV’s first active involvement in esports was to strike a deal with ESL to be the music sponsors of ESL One New York 2016.
Now Fuse viewers will get to see the backstage action starring top CS:GO players:
• Spencer “Hiko” Martin
• Nick “nitr0” Cannella
• Jonathan “EliGE” Jablonowski
• Josh “jdm64” Marzano
• Jacob “Pimp” Winneche
• Steve “Joka” Perino (team manager)
• Luis “peacemaker” Tadeu (team coach)
Fuse TV explained that:
“Viewers will see the team strategize maneuvers, develop player tactics and psychologically prepare for battle – all culminating in either the sweetness of victory, or with the powerful realization that they must regroup to fight again another day.”
Team Liquid’s new owners aXiomatic have moved quickly
The program is being produced by 1UP Studios’ Mike Milanov, Team Liquid’s Bruce Stein and Mandalay Sports Media’s Dick Glover.
The involvement of Dick Glover is notable because he is one of the new investors in Team Liquid, after aXiomatic bought a controlling stake in the team in late September. Glover is a former EVP at ESPN.
The chairman and CEO of Mandalay Entertainment Group is Peter Guber, and he has taken on the role of co-executive chairman of aXiomatic.
Filming for the show must have begun immediately after aXiomatic took over. Striking a deal with a TV broadcaster, setting up the production of a documentary, and acquiring an esports team is a lot of work – which could not have been accomplished in a week.
The fast execution will have been helped by the fact that the 1UP Studios was founded as “a full service creative agency, studio and production company” by Team Liquid in 2015.
— 1UP STUDIOS (@1UPGG) October 4, 2016
Ad hoc arrangements giving way to strategic partnerships
One of the developments which is most visible in the esports industry is the creation of strategic partnerships between teams, leagues, and broadcasters.
These are replacing the ad hoc relationships of the past which may have produced excellent one-off events, but lack the commitment to a longer term relationship.
The ELEAGUE from Turner Broadcasting is a good example of the new professionalism which is coming to esports.
The title of the Fuse TV broadcast, “Gamer Gods: Team Liquid,” makes it evident that Fuse believes there is scope for a multi-program series.
If the first show gets a good response, there are many other teams whose names could come after the colon – “Gamer Gods: Ninjas in Pyjamas,” “Gamer Gods: Team Rogue,” and so on. Team Liquid could easily return in “Gamer Gods: Team Liquid 2.”
Image c/o Team Liquid / Instagram
ESL has formed a strategic partnership with France’s largest media group, Vivendi, and its subsidiary the CANAL Group. The first action of the partnership will be the launch of new French esports leagues.
The new leagues will be based on the existing ESL Championnat National. The agreement will see the leagues televised and broadcast on CANAL Group channels such as Canal+.
Canal+ became a sponsor of Team Vitality in June this year, the first major European TV channel to sponsor an esports team.
The Vivendi press release explains that:
“The re-imagined national league will help French pro-gamers to stand out and compete against the best teams in international competitions held around the world by ESL and partnering game publishers.”
CANAL Group and ESL plan to organize major international events
As part of an objective to “strengthen the role of France as a key country in the international esports circuit,” the CANAL Group and ESL will co-organize “major international events” to be held in France.
The partnership says that it will bring “new excitement to the local eSports community in France.”
Game selection will be informed by European cultural concerns
The specific esports games that will be covered by the new league and be promoted by the partnership have not been finally decided. The ESL Championnat National currently offers competition in CS:GO and League of Legends games.
One preoccupation which may affect the choice of games is the European reluctance to promote games that contain particularly violent scenes.
German soccer club TSG 1899 Hoffenheim, recently said that it would not be joining the rush into esports because the sector is “dominated by first person shooter games which do not fit the club’s image or training philosophy. TSG will not invest in a sports trend where it cannot be ruled out that it encourages aggressive or emotionally damaging behavior.”
Vivendi to provide support for the esports initiative through subsidiaries
Vivendi will support the partnership via its subsidiaries, Universal Music Group and video streaming site Dailymotion together with its “activities in live events such as L’Olympia and Digitick.”
The Canal Group has launched a new TV show dedicated to esports and its “stars.” The Canal Esports Club will be backed up by the broadcast of a special documentary on esports, Game Fever, which is being given a prime time spot on the new channel on Oct. 26.
Vivendi sold Blizzard Activision, but is rebuilding gaming capability
Vivendi is one of the fifty largest quoted companies in Europe. It has a wide range of diverse interests centered around broadcast media, but it is also the owner of Gameloft and a major shareholder in Ubisoft.
Gameloft is a game developer which was ranked number two in the world in iOS and Google Play by the combined number of games downloaded, according to rankings from App Annie.
Ubisoft is the developer of the Assassin’s Creed, Far Cry and Watch Dogs console games as well as the Tom Clancy video game series. Vivendi is trying to gain full control of the company, but at the moment is in a battle with the management, which wants to retain independence.
Vivendi sold Blizzard Activision in 2013, but it clearly wants to re-establish a global presence in esports and video games.
French esports betting is on the regulator’s agenda
The French government and its gambling regulator ARJEL is taking esports betting seriously.
In April, French Secretary of State Axelle Lemaire announced the launch of a government-sponsored “France eSports” federation which will advise the government on regulating esports.
In its annual report for 2015/2016, ARJEL explained its thinking on esports and how it is currently studying the situation with a view to allowing esports betting.
The French regulatory system is based on allowing wagers on games of skill, not of chance. Roulette is not authorized as an online game, but poker, horse race betting and sports betting are.
Earlier this year, ARJEL added daily fantasy sports (DFS) to its list of regulated activities, and it is only a matter of time before esports betting is also allowed.
Vivendi’s determination to promote esports will bring a larger French audience; ARJEL’s determination to regulate esports betting will give that audience a chance to engage more deeply with their favorite teams and esports by allowing them place wagers.
By this time next year, there could well be an active, regulated esports betting market in France.
The formation of the Professional Esports Association earlier this month means another esports league is entering an increasingly crowded, competitive space, filled with both opportunity and plenty of opposition.
The competitive Counter-Strike: Global Offensive body has certain characteristics that set it apart from other leagues.
It is believed, for example, to be the first league to consist only of American organizations. It says it will distribute profits evenly between players and owners. It will also compensate casters.
As a result, the league will attempt to distinguish itself from a growing list of established CS:GO organizers.
Not all esports leagues are created equally
The PEA faces diverse competition across the professional CS:GO spectrum from a variety of leagues. How it works within and around these leagues, and what it can offer organizations that these leagues don’t, could be critical to its success.
Just as professional organizations exist under the same name and logo across many different esports (e.g. if the franchise “Cleveland Cavaliers” referred to separate NBA, MLB, NHL and NFL teams all under one parent organization), esports leagues themselves can take many different forms.
The divergent and at times random quality of each organization—in terms of their games, their goals, and their structure—means comparing organizers with one another on their face can be difficult.
Here are some examples illustrating not just the unique goals and nature of PEA’s competition, but also the apples-and-oranges construct of the various esports organizations that make up the PEA’s competition.
The PEA is a professional esports league that runs events involving only North American organizations across just one title, CS:GO, and is also a body concerned with equitable player representation and compensation.
For a traditional sports corollary, this would be like if the NBA and the NBA’s players association were the same thing.
ELEAGUE is a new CS:GO league that grew out of a joint venture between Turner and WME/IMG, televises games nationally on a weekly basis, an holds competitions out of a studio in Atlanta.
It is also hosting the finals of an Overwatch tournament.
This would be like if the NBA had no officially recognized players association; ran multiple seasons of the same basketball league in the same calendar year; involved teams from all over the world but still only hosted games in North America; hosted and operated the finals of a football tournament.
ESL is a multinational company that runs many esports leagues, comprised of events all over the globe, across several titles including CS:GO, and works very closely with WeSA, a player’s association focused on both game integrity and players’ rights and representation.
One of ESL’s leagues, ESL Pro, will abide by whatever regulations WeSA promulgates. It is also a partner of the Esports Integrity Coalition, an integrity group.
This would be like if the NBA was a company with several leagues across different sports, not just basketball; involved teams and competitions based all over the world, not just North America; was affiliated with a players organization that advocates for players across all sports, not just basketball; had one of its leagues abide by what regulations the players organization develops.
Dreamhack is a massive annual Swedish digital festival with concerts, gaming expositions, and live pro gaming tournaments across several titles including CS:GO. Tournaments are held both at the festival, but also elsewhere around the world over the course of the year. It is also a partner of ESIC.
This would be like if the NBA was a sports manufacturers conference that had the best sports equipment in the world and so it started hosting tournaments, not full leagues, at the conference involving several sports; was affiliated with a players organization that advocates for players across all sports, not just basketball, whose regulations it has not formally agreed to adopt; used the success of the original, annual conference to host other tournaments around the world across many sports as part of other conferences.
Major League Gaming
Major League Gaming is an organization that runs multiple esports tournaments in North America involving teams from all over the world, across many titles including CS:GO. It was recently purchased by game developer Activision Blizzard and has no officially recognized players organization.
This would be like if the inventor of basketball, James Naismith, purchased a league that held basketball tournaments, but also tournaments across many other sports; the league’s events only occurred in North America but involved teams from all over the world; the league had no recognized players organization.
PEA challenges could include established brands
While it might seem frivolous, comparing the different organizations offering CS:GO is useful because the seven founding North American organizations that make up the PEA also compete in each of the above leagues.
If the PEA can stand out from those organizers by offering a better-compensated, more equitable experience for teams, there’s a chance American organizations could choose to take their business to the PEA more exclusively.
In order for the PEA to do this, it would have to capitalize on organizations’ discontent with other tournaments and leagues, and win organizations over from more established brands.
But even if an organization was unhappy with a tournament organizer, the costs of not competing in a certain widely respected tournament or league might outweigh the benefits.
Valve a potential roadblock
Perhaps a more pressing issue for the PEA is whether game maker Valve will allow it to exist as a league.
As ESBR’s Joss Wood notes, the CS:GO developer is in a position of absolute power and could change the terms of its software licenses at any point, rendering the PEA unable to even conduct a league.
Valve has signaled no intention to do this. But if the PEA’s aim is to distribute all profits amongst players and teams, Valve may decide it wants a cut of the action.
In that case, the PEA would be forced to either pay up, or move along.
No adopted standards or practices, yet
It is unclear if the PEA and its member organizations will adopt the regulations for best practices being developed by some of the leading integrity and player representation bodies, including WeSA and ESIC.
The PEA will have its own committees, including a rules and grievance committee. The theme of self-reliance and construct of self-governance inherent in its formation could make league less likely to join a self-appointed integrity body.
WeSA announced Wednesday that the ESL Pro League for CS:GO will be the first league to adopt the regulatory standards WeSA has yet to develop.
If other leagues, including the PEA, don’t also opt in to the same regulations, CS:GO runs the risk of having the same teams in the same esport abiding by different standards and practices simply based on the event organizer.
Each of these leagues are conducted simultaneously, often over the course of months or a full calendar year.
Confusion could emerge if two concurrent events, such as ESL One Cologne and ELEAGUE Season 1 from this past year, involve the same teams playing the same sport but abiding by different organizational, integrity, and player protection rules in each event.
Another detail possibly discouraging the PEA from opting into regulations developed by WeSA? There is no overlap between the nine founding organizations of WeSA and the seven North American founding organizations of the PEA.
A potential impetus to host larger events
It’s also unclear where the PEA plans to host its competitions, and on what size and scope those competitions will take place.
An emphasis in recent years on larger, live-event based competitions could incentivize the league to “go big.”
The PEA’s formation came just days before ESL announced a partnership with venue operator Anschulz Entertainment Group.
The deal ostensibly allows ESL to expand its live events capacity to include the large portfolio of major arenas AEG operates.
VentureBeat reported the partnership will give ESL access to AEG’s infrastructure for marketing live events and selling tickets, and allow for the development of new tournaments in Asia.
ESL declined to comment to EBSR on the deal and AEG did not respond to requests for comment.
Upcoming ESL tournaments, like ESL One New York at the Barclays Center, and the Intel Extreme Masters 2016 at Oracle Arena, were already slated to take place at AEG venues.
The deal could also have an outsized effect on esports betting.
More esports spectacles taking place at arenas like London’s O2 and Los Angeles’ Staples Center could draw the eyes of more live spectators and television and online viewers.
Because betting volume on esports events rises proportionately with the size and scope of the event in question, these types of events could help fuel larger CS:GO handles at regulated esportsbooks like Pinnacle and SkyBet sooner rather than later.
The announcement of another organization to manage esports competition is nothing new, but the Professional Esports Association (PEA) offers a different model for managing the business of esports.
The PEA Commissioner, Jason Katz explains:
“The PEA represents something new in eSports – an association of top teams running their own league and sharing the profits and the decision-making with the players. This has been the architecture of traditional major sports leagues for many decades, but it is a new evolution for eSports. This will allow us to finally build a stable, healthy, long-term environment for the players, the community, the media and the sponsors.”
- The PEA press release can be found here.
Seven top US teams are founding members
The North American esports teams that have managed to agree on the structure of the PEA to become its founding members are:
- Team SoloMid (TSM)
- Team Liquid
- Counter Logic Gaming
- NRG Esports
- CompLexity Gaming
They will take part in a 10-week league playing CS:GO matches twice a week. The first season will guarantee a minimum of $500,000 in prize money, with $1 million guaranteed for season two.
League profits shared with teams and players
Part of the motivation for founding the PEA is to create a more equitable share of the financial rewards created by esports competition.
Andy Dinh, CEO of TSM stated:
“It’s time for leagues to share the rewards and strategic decisions with the players, and the best way for team organizations to do that is for us to do it ourselves. The PEA is a vehicle for us to work shoulder-to-shoulder with the players, doing what we all love.”
The PEA will distribute profits 50/50 to players and owners and “each caster will receive a share equal to a player.” Players will also receive other financial benefits including retirement and investment planning and health insurance.
Competition formats, playing rules and prize distribution structures will be decided by a Rules Committee which will include player representatives, and there will be a Grievance Committee also involving players, that will decide on any complaints.
“This marks the end of the ‘Wild West’ days of eSports,” said Jack Etienne, Cloud9 CEO. “The community and players want stability and dependability. Leagues come and go, teams join them and depart, but with the PEA, the teams are making a long-term commitment to be here, playing for the fans, for the indefinite future.”
The WESA has similar aims
In May this year, the World Esports Association (WESA) was founded under the aegis of ESL.
The WESA’s mission makes it clear that it too wants to share the benefits with teams and players:
“WESA’s mission is to become the global benchmark for industry-wide standards through that framework, involved parties and activities of the Association. Starting with the ESL Pro League for Counter-Strike: Global Offensive, WESA will be the first organization in the history of esports that will bring those affected by its decision most, to the decision making table.
Transparency towards Teams and Players, as well as a continuous support to them are at the heart of the Association.”
At this point in the development of the esports industry, it is natural to see attempts to develop formal structures within which esports competitions take place.
Allied businesses such as esports betting operators need such formal structures, which can ensure game integrity and fairness in order for their own businesses to grow.
Mainstream broadcasters need to know which leagues and which games are going to attract the biggest audiences—there can’t be the equivalent of an esports Super Bowl without such organization.
However, like the internet boom of the 1990s, there will be many market entrants and only a few will succeed.
WESA and the PEA both present some attractive features, but both lack the direct involvement of the major games producers such as Riot Games and Blizzard Activision.
Critical differences between esports and traditional sports
Most observers drawing a distinction between esports and traditional sports focus on the difference between sitting at a computer and getting out on a sports field, but the more important differentiator is that there is no intellectual copyright on traditional sports whereas there is for esports.
There is no game developer behind tennis who can control the rules of the game and who must be paid—at least in some form—by a league organization that wants to organize sporting competitions.
League of Legends competitions could be killed instantly if Riot Games changed the terms and conditions of its software licenses. The game developers are in a position of absolute power over the development of public competitions that depend on their products.
Developer involvement critical to any formal governing organization
Splitting financial benefits 50/50 between teams and players sounds great in theory, but there isn’t any percentage in there for the game developers.
As the “wild west” environment changes, and some leagues emerge as the main competitions for esports professionals, game developers will begin to look for their share of the financial action.
It seems inevitable that the ultimate winner in the apparently free market competition for organizing esports must have the support of the major games developers. If the PEA aims to expand its model to the wider esports industry, it should look to bring in the game developers at an early stage.
The choice of Jason Katz as the first Commissioner will help; he used to be in charge of strategic initiatives at Riot Games.
MTG describes itself as “an international entertainment group. Our operations span six continents and include TV channels and online platforms, content production and distribution businesses, radio stations, multi-channel networks (MCN) and eSports.”
Esports is in investment mode
For the first six months of 2016, the MTGx business division, which operates the esports vertical, reported a negative operating income of SEK98 million ($11.4 million).
The figure for the whole of 2015 was SEK111 million ($12.9 million), suggesting that MTG is content to take the loss as it builds its market position. The loss in Q1 of 2016 was SEK50 million, and SEK48 million for Q2.
The investment is reported to be achieving “high sales growth” across all of the MTGx businesses. Sales for the full year in 2015 were SEK451 million ($52.4 million) compared to SEK360 million in Q2 of 2016.
MTG lists several specific achievements for the MTGx businesses:
- Acquisition of leading U.K. esports agency Kuoda
- Launch of a 24/7 esports channel in May 2016
- Establishment of the World Esports Association (WESA)
- Foundation of the Esports Integrity Coalition (ESIC)
- Launch of the DreamHack Masters international tournament
- Entry to the U.S. market with DreamHack Austin
MTG reported that ESL received 108 million online views in Q2, aided by the ESL One events in Frankfurt and Manila. The recent ESL One Cologne event fell in Q3, so did not contribute to the total.
MTG selling some traditional TV broadcasting to focus on digital entertainment
MTG President and CEO Jørgen Madsen Lindemann explained that MTG’s strategy was shifting from traditional broadcasting to focus on a broader concept of digital entertainment. To this end MTG is exiting several businesses:
“We completed the sale of our shareholding in CTC Media in Q2 and have now withdrawn entirely from traditional broadcasting in the CIS region. As part of our ongoing portfolio optimisation, we have also signed an agreement to sell our free-TV and production businesses in Ghana and Tanzania, subject to local regulatory approvals.”
“We are now not only the leading digital entertainment player in most of our markets, but also a global leader in key digital categories such as esports and MCNs.”
The Xbox E3 conference on June 13 saw Microsoft announce new products and features for the Xbox product range. For esports, the most significant development was the announcement of Xbox Arena.
Xbox Arena is an esports tournament platform designed to work with a wide range of games, and available across Xbox consoles, Windows 10 PCs, Android and Apple iOS. The platform is scheduled for launch this fall.
The E3 presentation explained Microsoft’s commitment to competition:
“Competitive gaming has always been at the core of Xbox. Whether you are a seasoned Pro or a casual gamer, we want to unleash competitive gaming for everyone.”
EA will bring top titles to Arena
During the presentation, Microsoft explained that Smite and World of Tanks would be added to Xbox Live and feature in the Arena platform.
The company will get other top titles following a deal struck with EA, which will bring FIFA and other games to Arena “over the coming years.”
Arena is complementary to the ESL deal
Earlier this year, Microsoft struck a deal with ESL to enable platform integration so that Xbox gamers could take part in ESL events straight from their home consoles.
FACEIT is also involved in the deal, integrating its esports platform technology and helping third-party video game developers and publishers add a competitive layer to their games for the Xbox Live Tournaments Platform.
Niccolo Maisto, CEO of FACEIT highlighted the significance of the deal:
“The launch of the Xbox Live Tournaments Platform is a monumental moment for the future of competitive gaming and the growth of eSports.”
It’s not clear how the ESL deal will integrate with the Arena platform. It looks like the technology should be able to integrate smoothly, but for marketing reasons the ESL esports events could well be maintained separately from other Arena tournaments.
Arena will be supported by other Xbox Live enhancements
Xbox Live was launched in 2002, and since then Microsoft has upgraded the service regularly. This year, as well as the introduction of Arena, there will be three new developments which will support the esports tournament platform.
- Clubs — The Clubs feature enables players to create and maintain communities around a particular common interest.
- Looking for Group —“It’s like a want ad for multi-player. It’s the simplest way to find other gamers with a shared goal in mind.”
- Servers closer to players — Microsoft will add more servers and position them “closer to where gamers are, resulting in a faster, more reliable network.”
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