The Crooked Business of Esports

[@ModernMBA]

Visit NetSuite.com/ModernMBA to sign up for their one-of-a-kind flexible financing offer! 0:00 Bang & Whimper 3:20 Sponsor Break (NetSuite by Oracle) 5:25 Mutual Dependence 10:36 NA Corruption 22:21 EU Idealism 33:59 Pointless Middlemen

[@Curt_Sampson]

You can't get that CFO AI guide you advertise from that link. All you can do is fill in the form with bogus information and get access to three other documents. That said, you can find it easily enough with a web search, and while I've only skimmed through the first half of it, it seems surprisingly sensible, perhaps because Oracle won't live or die based on "AI" hype. I wouldn't mind seeing an episode deconstructing all the crap that's going on there, especially with OpenAI. Ed Zitron's written quite a number of good posts about it.

[@oqlassic8799]

Where are the sources?

[@Marek7_]

I think there should be a extra timestamp somewhere around 28:40ish for the IP owners (activision/riot). Also for EU Idealism you should've shown Ence but they are a way smaller org.

[@aquaintsound]

Sources? There's lots of great info but it's hard to fact check without sources

[@the_newt_nest]

WHY ARE YOU SPONSORED BY MY WORK'S ACCOUNTING SOFTWARE?? It's pretty good! Making GL entry imports is really flexible. I personally prefer MIP for its reporting but NetSuite is great for day to day.

[@paulhenderson1066]

As someone who was a huge fan of early Overwatch League, I feel like it was always obvious there was no clear path to profitability. Teams paid tens of millions to enter OWL and only got some ad revenue and meager merchandising

[@storm50721]

Yea it was honestly insane that franchises were selling for thousands or millions of dollars, esports scenes are always better when they're organic

[@junyaiwase]

Honestly the truth is it will be obvious to anyone with a brain however they will still entertain these ventures in the hopes that they are different

[@AL-lh2ht]

@@storm50721 Sports have always been vanity projects of the rich.

[@AryaStarky]

I think choosing not to stream on twitch really hurt the viewership too.

[@AchedSphinx]

they like to compare themselves to NFL or NBA, but they lack the huge TV deals those two leagues have and those direct passes for streams. plus, since most money comes from NA, a lot of the teams top talent weren't western, so it made them a bit less marketable. twitch can't make money because it's free and adblock exists. so being a subdivision of that and trying to make a profit was a tall order. much easier to just be a streamer and get money that way. so overall, rough deal in hindsight, but pretty cool watching overwatch league. i liked it.

[@alexdirac1858]

At first i misread the title as "the crooked business of escorts" and was very disappointed.

[@darren8608]

income came from things coming in and oute

[@BlckJack123]

You might have given him an idea for his next video.

[@kenon6968]

It's a hole industry

[@JF-vw9lv]

What if we merged escorts and esport? Could boost both.

[@gameworkerty]

Nah that's honest work.

[@klumzyee]

as someone from the industry. this was well made and thank you for calling out the endless amount of shady millionaires who ruined a once fun community

[@Tib1010]

The grifters keep on grifting and people gobble it up. The pif has absolutely ruined the scene. There is no morality anymore. There is no fun anymore. Every dime these players play for now has been tied with essentially blood money from the Saudi government. This applies for pretty much every game include lol, val, cs2, dota, and any fighting game or rocket league. Especially cs2 man. Carmac and his cronies. Fucking Vince hilger selling his soul for what? A few measly dollars. Sickening and sad to see a fun and exciting scene tainted with blood and greed.

[@poindextertunes]

uber rich folks ruin everything. they prey on anyone that can make them a profit regardless who they hurt

[@conner-rob]

Source: Trust me bro

[@PayPal68]

One thing never mentioned is that games constantly change and their meta is in constant flux. Compare this to basketball or soccer where the changes come over decades of minor tweets. Compare this to say Overwatch which can add a new hero every couple months or can nerf another one out of all pro play. This change makes it very difficult to commit large amounts of capital on a team or player that could become obsolete in a changing meta a year or 2 down the road

[@BusinessDymystified]

@@PayPal68 good point, not to mention that this constant flux also means the audience has to consistently keep themselves updated with the new trend. I'm contrast, once you learn football's or basketball's rules you are good to go for life since rule changes rarely happen.

[@foobar9220]

It is even worse. E-Sports is not a coherent sport, it is splintered over many individual games. But someone interested in CS might not care at all about LoL. It is not fair to compare E-Sports against a single sports league, as E-Sport is rather representing a dozen different sports. This makes the path to monetization even more difficult, as critical mass has to be reached for each game individually.

[@AchedSphinx]

i couldn't imagine trying to keep up constantly on all the changes league of legends go through with it's over 100 champions and those items. i've never played the game, but it feels really daunting to just hop into it.

[@Sizdothyx]

Tall players are too tall nerf pls, Silver - Chris Paul

[@alexandereast4072]

This is a great thread

[@BS-jw7nf]

the real problem is not letting the sport grow grassroots with healthy support from the developper and organic interest, instead C student MBAs and marketing folk decided to dump in a bunch of money for shits and giggles to see if they could silicone valley this thing. Clearly failed, now the sport will just go back to it's natural point and will slowly grow as more people get interested in more serious gaming.

[@air.internetH2O]

you mean gambling

[@vietnamabc2290]

​@@air.internetH2OSC2 says hi, still living despite all the doom and gloom

[@Matanumi]

Or it wont it'll just be bought and paid for

[@Sid-yn4wo]

love that you don't just make videos on topics that every other KZbin analyzer is doing, your topics are always unique and different

[@vooteimer1234]

Wall Street millennial did this topic recently

[@AAFroes]

that's why both of them make a lot of mistakes, you can't possibly understand the intricacies of all these businesses

[@blueprint7]

@@AAFroes source: trust me, bro

[@What_was_wrong_w_jst_our_names]

Casually explained just dropped a day before this one

[@ma-0xff0000]

@Sid-yn4wo you have to be at least 13 years old to make a KZbin account

[@MountainFudgecake27]

I got into League around the S2 Finals and was regularly watching the NA LCS during 2013-2015. One of the biggest issues with teams was that the players' skill had to also coincide with good streaming and fanbases. The reason TSM was a huge name at the time was because their members were prolific content creators and streamers. When the "iconic" members of a team were replaced with lesser known players, the viewership suffered. TSM fans loved Dyrus, not the TSM brand. I lived in Indianapolis for a while and when Petyon Manning left the Colts there were a lot of fans who rooted for the Broncos in the post-season since they just loved Peyton so much. The problem is much worse for eSports since changing alliances isn't region dependent so your players are your entire identity. If your brand is extremely roster-dependent, is your brand worth anything at all?

[@blipblop5757]

Absolutely right, I loved NIP as a CS fan back in 2014 but what I really liked was the story of f0rest, Get Right, Xizt, Friberg playing together. I dont really care about NIP at all. The entire reason we give a shit about traditional sports is the strong sense of community that you get from being a part of that city and that organization.

[@oserodal2702]

LCS is getting shaken up this year anyways, especially the gradual improvement of the region compared to their peers in EU. Even if it is currently an eSports winter, it is still relatively far from an eSports death.

[@EvanAsh14]

I think you have hit the nail on the head. Sports teams draw fan bases primarily from the state or area that they are based in and it therefore becomes a part of their identity, which is going to massively drive sales of merch or tickets to games as each individual seeks to represent that part of their identity. An esport organisation is simply a name, the players largely have little charisma or personality, the few that do become fan favourites and therefore drive engagement to those brands. It is all about branding at the end of the day and most esport teams have little of that to display since it is hard to tell each one apart for the casual viewer

[@flipdbit]

36:47 Saudi, online casinos, crypto, and shell companies. I'd like to see that Venn diagram.

[@terrablaze3387]

It’ll probably look like a fucked up apple fritter

[@flipdbit]

@@chrisg8995 Venn diagram. You know, circles that show overlapping relationships, subsets, etc. Google it.

[@Reddemon815]

Saudi gov would never directly sponsor online casinos, the nation outright bans gambling and is a major taboo.

[@Tib1010]

​@@Reddemon815 no the Saudi government doesn't need to sponsor gambling. They sponsor nearly every esports team now.

[@deedeeramone34]

It’s just one big circle

[@davidl.e5203]

Interviewer: "So what are your skills and expertise?" Mario Ho: "I'm a son of a billionaire." Interviewer: "Hired."

[@Jack-sq6xb]

It got him into MIT

[@nikoforsyth514]

9:20 Nintendo is actually worse than passive. They often interfere with tournaments that are getting too big.

[@dc8836]

Nintendo is the most "stop giving/making us money, guys!" companies in existence. They don't deserve their success.

[@jamesmcleod2415]

Yep Nintendo has sent their army of lawyers to work to shut down competitions. It's really a shame as the pro level of Smash Bros is INSANE.

[@AchedSphinx]

unfortunately for nintendo, they don't make money off melee. though i suppose if they wanted, they could remake it to make some money and toss in MTX, but if the game isn't exactly as jank as it is on gamecube, which is probably tough to make exact, then it'll probably be a tough sell to people.

[@nagasako7]

​@@dc8836 They think long term. All my nieces and nephews are into Roblox and Nintendo games. Not Valve Games, Not Overwatch or Call of Duty. And older parents go out and watch Nintendo movies. Palworld was supposed to take over Pokémon and yet it fizzled out. Love or hate Nintendo, they sustain their IP.

[@raylopez99]

@@nagasako7 There's a doctrine in US trademark law saying if you don't enforce your mark you can lose it. That might be driving Nintendo's legal department, rather than "long term thinking". Same happens with the US Olympic (TM) org that regularly sues mom-and-pop businesses for using the statutorily trademarked term "Olympic" in their logos.

[@CR0WYT]

People overestimate what esports will look like in 5 years, but underestimate what it would look like in 30.

[@Matanumi]

Probably the same as it is now with more money And scammers

[@JesseHouston]

Great video! One concept I think plays into account is how fundamentally the sports themselves are commercial entities looking to ensure that they extract as much capital from the ecosystem as possible. Kids can play basketball in the street with only a ball and a hoop, but you can’t play StarCraft unless Blizzard lets you, and blizzard will want to ensure that they are making net positive revenue through your practice. Further, the number of rent seeking entities extracting from the consumer (middlemen, twitch, leagues, game companies, etc ) are all attempting to extract at every angle without a meaningful revenue sharing model on stuff like merchandise

[@MikeStoneJapan]

The maturity just isn't there. I'm barely middle aged and can still clearly remember a time when gaming was quite fringe. When my parents were young, patronizing football was already an established thing. Gaming industry, much less competitive gaming, even much less spectated competitive gaming needs 2-3 more decades at the least

[@rawrss]

I wouldn't trust Mario Ho to make a sandwich, let alone be head of NiP. 😂😂 I hope we can all come back to the great video in a few years and laugh at the downfall together.

[@raylopez99]

Cute (trophy) wife tho.

[@snarkybark]

Not if NIP is a grift company, then he sounds like the perfect man for it

[@NativeAlternative]

This vid should be mandatory viewing for any media outlet that wants to cover the "hype" of esports, especially as Saudi money is putting the industry back in the spotlight. One thing you could have added was exactly WHY esports lacks the largest revenue source of sports: media rights. Many of the biggest NFL or even Premier League teams can make a loss when they host a home game, but overall stay in the black due to the insane amount of TV money coming in. Esports, being almost entirely on streaming platforms, makes next to none of this money. Mainly due to: 1. Steaming as a whole has a terrible advertising model compared to traditional TV, where individual channels sell ad spots that best match their audience at that time of day. This is why Twitch is unprofitable, and why Netflix, MAX etc. are trying to incorporate ads. Subscriptions just aren't enough. 2. Streaming platforms don't want (and really don't need) to pay for exclusive esports content. The publishers also probably wouldnt want to limit the exposure to their games. 3. While pay-per-view is reliable and lucrative in sports, esports fans would not pay even a fraction of that price. They are far too used to watching everything (live and VOD) for free. Maybe as more legacy media companies turn to streaming this may bring more rights bidders and money for esports, but I wouldn't bank on it.

[@technetium9653]

eSports was artificially pumped, because they expected it to rival sports, but if you see how sports were like when it first started, the players were literally unpaid, there was nothing supporting a salary so there were none, and currently nothing is supporting an eSports player's salary, so of course its dying

[@HdbeWydvd]

And by pumping the salary, they broke the korean esports scene. T1 is over 50 million in debt and no company in lck is profitable at the moment.

[@Ps5prolite]

Yeah. These US companies are typical scammers

[@yeetboi268]

b-b-but.. my goat deserves the best!!!

[@PasserBy869]

Sauce?

[@skrattaoppar9753]

​@@PasserBy869it's obvious, even GEN's current roster is too expensive to keep more than a year.

[@unkeptharoldd9554]

me when I spread misinformation

[@rnknvisuals]

Being someone from the area MLG originates from in Ohio, I was fortunate to be part of a few MLG events in 2012-2014 for Call of Duty. Back then watching competitive cod was so entertaining and it felt like the community was a lot closer to each other. MLG even leased an event space near me where they held tournaments that my friends and I would attend occasionally. Eventually things got extremely corporatized and it wasn’t fun anymore. I think it was the Activision buyout and creation of the cod world league. It destroyed the team I was part of with their outrageous entry fee. I haven’t touched or been involved in anything esports related since back then. Sad to see it went the way it did with shady millionaires and crypto scams.

[@kolonarulez5222]

I used to love documentaries about esports stars and behind the scenes. Even then it seemed like an industry propped up on "future success" but it looked so fun and hopeful.

[@josuebarboza9809]

Bold to assume zoomers and millennials have any money to spare 😂

[@MetalchipCovers]

Yet we'll spend it all anyways 😂

[@Alpha23TV]

😂😂😂

[@jramseier]

Capitalism capitalism'd a little too hard and left no pennies left to be squeezed, oops

[@nagasako7]

If you have kids, tell them to be a marine boat mechanic or aircraft private jet mechanic 😊. Follow the money, easy.

[@josuebarboza9809]

@@nagasako7 stagnant wages for 30 years

[@kristiyangerasimov6708]

so the players made a name for themselves, bled the companies dry and offloaded marketing expenses to them. Then the publisher organized tournaments made bank off the venues and team fees, so that the middlemen both paid for the show and made no money? Now players are streaming and jumping into collabs and cancellation scandals while the middlemen go out of business and the moral of the story is that the talent in esports holds all the cash and attention of the consumers

[@k3nnytm]

As should be

[@tbdoughboy2120]

While I certainly can understand and track his arguments I'm going to agree with you here and say that I see nothing wrong with this.

[@samfeatherstone7383]

​@@tbdoughboy2120In the sense that individuals with talent are the minority that benefit from the circus, yeah nothing is wrong. But if the circus closes for business, it leaves them with the most to lose if they can't pivot to being an online personality.

[@rayxr]

​@@tbdoughboy2120Only that as a business it's not sustainable.

[@negative6442]

I honestly respect the bag chasing tbh. Esports was never going to go anywhere with how it was being handled, so I see no problem with them bleeding these companies dry.

[@brendanwiley253]

Its really funny how just like real sports Esports move billions of dollars but no one is actually making money and the industry can only exist because some rich guys at the top care more about it existing than making money from it

[@MrGrusome]

Well “no one actually making money” is an overstatement. Businesses mostly don’t, but individuals working for them pretty much do. Players, content creators and even staff on events makes a buck here and there for a living. As for the businesses - publishers make some coin of esport divisions as well.

[@snarkybark]

If this was how it worked it wouldn't be a problem, really, but all the lack of transparency, taking nonviable companies public on hype, etc... that's horrible, and bound to shorten the life of the industry

[@Jack-sq6xb]

Its good advertising

[@CarbonComs]

Real sports definitely make money

[@snarkybark]

@@CarbonComs that's true, no reason to lump them together like that, the top tier of real sports are unbelievably profitable. Wasn't always true, but TV contracts have corked the bat

[@nbnfifty]

The biggest reason I feel it isn’t profitable like real sports or streaming is the para social aspect and also lack of social media presence. In sports you feel connected to a team which is hard in esports because most of the time they’re not connected to a city (unless it’s a cod esports team) or a player (because most of those guys lack personality). For example most people like and know of LeBron whether they watch basketball or not. They’ve either seen his highlights or memes of him or even his life story and some people have built a para social relationship with him and like a domino effect they can become interested in the sport and learn more about other players and etc. We see potential in marketing with the most iconic clips in esports history but it’s never consistent.

[@DriftJunkie]

What about people like Scream, Shroud, Ninja, Faker. If you ask most people who were ever interested in computer hardware, they have heard about these people. Just like people who touched sports hardware, have heard about LeBron or others. Just because more people touch shoes than graphics cards & consoles, doesn't mean one if them is destined to die 😅 Try to get out of the though bubble, sir. 😊

[@nbnfifty]

@@DriftJunkie I agree and those names you suggested are great personalities and very notable but they are more known for streaming than esports and guys like shroud and ninja rarely participate in tournaments or are apart of an org. It’s more about guys who are part of an org and can generate revenue and viewership in the esports space off name recognition alone

[@poggers4392]

​​@@nbnfiftyfaker is the 8th most popular person/brand in korea what????

[@nbnfifty]

@@poggers4392 you’re right but weirdly enough I think that’s because only league of legends and Dota are the most profitable because of esports appeal in the eastern culture. And when you turn to the west the only people who know about him are people into competitive gaming and esports. Although the goal just like with regular sports is to have them well known to anybody into sports so they become a household name. The problem is you just don’t see a faker clip being played on espn or any major outlets when we’re in the age where marketing yourself or your product (the league) can generate even more revenue and sponsors.

[@seffievondionysus3198]

​@@DriftJunkieI'm a software engineer and terminally online and I've only ever heard of Ninja. And even then I just know he plays Fortnite. Not everyone follows that scene.

[@sonyakinsey4376]

Esports academies, my stars... and I thought art school was scammy.

[@moshiadnfusionfallfa]

For a 40-minute video, this fails to explain or even mention the biggest problem that esports has: the fans are not willing to pay to watch these competitions. You mentioned sponsors, but if you think anything is profitable because of sponsors then you'd be wrong. Traditional sports are profitable because of broadcasting rights. The amount of money sponsors pay does not come even close. Cable providers around the world are willing to pay many millions in order to have the rights to air these leagues in order to get people to subscribe to their services. Paid subscriptions to streaming services work in a similar way. If we as fans are not willing to open our wallets to watch esports, then we shouldn't expect it to become profitable anytime soon. That or the devs (or whoever runs each esports league) find another source of revenue that is equally as sizable.

[@echo5394]

it's too cucked now, trash talk between players and their eGirls used to be the entertainment that made it worth following

[@Matanumi]

....why should the fans pay? What's the value in it? And anyway they sorta do with subs and superchats but again- that's to the content Creator.... and KZbin

[@bluerationality]

In Korea part of it is also global publishers gutting leagues established by broadcasters. By retaking most of the profit, game channels lost flexibility to pivot or invest in leagues for different games. And games become stale. So gaming dedicated channels all died. Thus only leagues where publishers pour in millions would survive for a bit. There is no big money either way for investors

[@nolanova4352]

First off, I want to say, fantastic video! I appreciate you covering this topic with such detail and really shining a light on some of the very questionable practices that have plagued the esports industry for many years. From my own experience working in esports for the past 7 years, however, there are two other important things I think that need to be mentioned in addition to all the other issues you mentioned 1) I think the intellectual property issues that come with gaming can be argued to be one of the biggest, if not THE biggest, foundational causes of esports' downfall. You highlighted this a little bit with Activision's desire to control esports for Overwatch League, but it goes even deeper than that - when the publisher retains complete control over what happens with their game, all other parts of the industry have to conform to their whims, which prohibits the sustainable industry from growing around it. And most publishers are now very heavy-handed when it comes to oversight of their product, even if they don't actively contribute to the competitive ecosystem. Whereas grassroots communities used to be able to do whatever, most publishers now have tournament guidelines that limit event organizers in ways that make creating and maintaining events unsustainable - can only get $X total in sponsorships per year, can't charge for event entry or can only charge $X, can't use X sponsors since they don't align with the game, etc. You also can't create meaningful products around a game if it is constantly changing or operates in a closed system - I can't start a bat company if Ubisoft owns the schematics for how the bat hits the ball, changes it every week, and doesn't share that info with anyone. Imagine if the MLB or the NFL had complete control of whatever ANYONE did with baseball/football ever, anywhere in the world. They wouldn't have become the massive indsutries they are today. And I think having to work around the IP is why so much of esports has come down to needing ads/sponsorships and merch to be sustainable, which leads into point 2 2) I think the failure of broadcast deals and sponsorships has a lot to do with the nature of how esports is consumed - through free-to-access websites with little to no investment required. One of, if not the only, entertainment areas where there is no expectation of investment from the viewer. When viewers (and players as well) are used to paying nothing or minimal money for access to events that are typically very expensive to produce, that ripples across an entire industry and results in high CAC with little to no ROI or clickthrough, as ads/sponsorships don't add much visible value to these products.

[@CantFightRobots]

Esports isn't "profitable" for outsiders to invest in because at it's core it's a labor of passion that is held up by a relatively small group of people who, historically, have donated their time and effort to the respective scenes they are in. Games often come and go, scenes come and go, teams historically form and disband based on chemistry or personalities. Investors want "forever" and esports is ephemeral. Post the explosion of Fortnite investors thought there was gold in the hills regarding anything digital/gaming but it's too unpredictable to reliably say where attention and eyeballs will go next week. Esports will live on forever as long as gaming is around but that doesn't mean it should be anything more than labors of love and passion for their respective communities.

[@humble_frog]

very true and with the advent of worsening game quality in modern times, the velocity of the scene is only increasing - you dont really have the types of cs:go, starcraft and similar games coming out, where they build solid foundations and large communities that they can retain because the quality of gameplay isn't there anymore. good luck trying to go for longevity in that environment

[@yurie2388]

@@humble_frog I will disagree. The quality of gameplay at game release is higher than it ever was for the historically popular titles. They simply had less competition and thus time to fix their issues and refine further. Starcraft when it released is FAR FAR worse balanced than most modern RTS. CS1.0 isn't the version people kept playing, even though it was available...

[@pierrex3226]

There are too many professionals whose job it is to invest in things, rather than to build businesses. I know, I am one...

[@SwizzleMix]

Owners of capital, some might say

[@boozecruiser]

@@SwizzleMix Careful now, you might upset some temporarily embarrassed millionaires

[@pierrex3226]

@@SwizzleMix lol, if you believe communism is the answer, please read books. The bios of Stalin and Mao for example.

[@Jartran72]

Mao and Stalin were both absolute and authoritarian dictators, that had nothing to do with communism either way. Not that I think humanity would be capable of living in a true communist society. Not as long as we have greed, religion, hatred.. But we also should not point to mad dictator number 5369 and view that as proof of anything.

[@drinkinouttacups2665]

​@@pierrex3226 Rockwell for president

[@FtwXXgigady]

For anyone interested in diving deeper on this topic just read reporting or watch videos by Richard Lewis. He's a huge journalist in the space who regularly covers the business side of esports and the corruption.

[@calebchin]

Halo 3 and KU shown in the first 90 seconds, this vid is a certified banger already

[@wizkdd8533]

Not to mention you can't play any of these titles for fun because every takes it too seriously now....

[@poindextertunes]

thats why i hate online gaming for the most part

[@RubyNekomata]

there's no genre of esports that collapsed as hard as sim racing esports -- what used to be mega hyped during covid to rival LoL can barely hold 300 viewers for the top leagues now 😭

[@MrPek-fe9fp]

Whats the reason for that? I see sim racing mentioned a lot by people like Max Verstappen. I think it seemed cool and its sad if its dying.

[@kymoody11]

As someone who's played video games for 23 of my 25 years on this earth, I've never been into esports and I have only gotten ravenously into hockey

[@mopspear]

Esports has been a net negative for regular multiplayer gamers.

[@AlfOutdoors]

Going mainstream is when things go bad. Going mainstream attracts VC suites, greedy investors, greedy companies, billionaire scammers and hype train clout chasers.

[@technetium9653]

Football has all the same problems, and yet it's still her. The problem with eSports is you can't popularise to the masses, something not owned by the masses

[@ipodtouch470]

Esports never made money. Even at the small stage. Always has been a passion project.

[@Matanumi]

@@ipodtouch470 it did but not for long And unfortunately you need to MAKE SOME money to make it work. The problem is sheer greed

[@DomoAsakura]

9:26 Nintento doesn't really invest in competitive Pokemon, that would be The Pokemon Company, which is partially owned by Nintendo but they're a separate entity.

[@Lybrel]

Good job calling out a billionaire's son for lying about Math Olympiad wins. And "youngest graduate of MIT" is a particularly hilarious thing to lie when there are living Nobel laureates that disprove the claim.

[@carsongunther]

Completely agree with nearly every point here. Esports bubble has popped. However not a single mention of 100thieves is an injustice to the NA Esports scene. 100 thieves has correctly addressed nearly every issue that was listed when it came to backend vs influencers in the same orgs.

[@canihasfreeusername]

Excellent video, thank you. I really like your graphs and the time spent on them really shows.

[@ygaudreault]

Biggest prob with e-sport vs traditionnal sport is the shelf life of video games. Hockey, football and soccer doesnt really change and will still exist in 50 years. No viedo game played today will still be meaningfully played in 50 years.

[@johnalddrumph456]

Honestly it can be summed up by this- no matter how hard they try, video game tournaments are not, and will not ever be the same as sports leagues. There’s too many different variables that can be/are changed too frequently in video games to ever be as consistent as basketball games for example.

[@kenngo3690]

Esports appeals to hardcore gamers while sports appeals to everyone, the viewership would be too niche to broadcast on a global scale and be profitable. A everyday person would not turn on a Esports tournament over the NBA or NFL and Twitch viewership alone would not be enough to make it profitable with the high operating cost. Even most gamers who play games don't understand the competitive scene to get invested enough to spend money.

[@NeostormXLMAX]

Well, i know lots of people like myself who left starcraft or are not good at the game but still watch, there are people who watch chess who dont play ether etc, i would argue that esports needs spectacle type games, i really wish rts games came back

[@k3nnytm]

But I think there is a problem with sports in general that esports, which many don't have that big of a legacy are facing. Sports are also facing the problem of keeping their audiences attention, and with so many things fighting for over your time, there isn't enough time for everything.

[@whatwhatmeno]

This is the future son get used to it

[@fus132]

@@whatwhatmeno Lol, lmao even

[@Jack-sq6xb]

I dont even think this is true. Some sports will survive off cultural inertia but if you look at the average age of an MLB NHL or NFL viewer theyre getting old. Basketball and soccer are the future of mass spectator sports

[@RoversGameplay]

I love the use of the fortnite font in the graphics you put up 💀

[@AustinOgonoski]

This is happening in every gaming genre. There are going to be a lot of weird stories coming out in the next few years about eSports.

[@J0hn5mi7h42]

Good lord what a damning indictment of esports. Thank you for this, as always. The shoutouts at the end were glorious, even if I was salty at Dota getting left out, but Evo Moment 37 and Wombo Combo are definitely far more iconic.

[@todo9633]

The sad fact of the matter is that games die, where sports tend to not.

[@awijaya2116]

Riot, League and Valorant barely get mentioned here - i assume it’s because Riot’s not a public company and trying to pull worthwhile information is a massive pain in the ass. League’s the elephant in the room, with leagues that seem functional in Korea and China - the latter even has broadcast revenue from streaming companies bidding on exclusive rights. The argument is that esports have greater public acceptance there + a less fractured esports viewership (less games competing for more viewership). I personally don’t think they’re sustainable either but that’s the argument in favor of esports “working” as an industry

[@iulioh]

Probably because league is BIG. But the fact that Riot's strategy is not talked more is pretty strange, it founds the esport scene so it won't ever fail. I feel like without the ability to talk about Riot and the strategy has adopted to LoL, the biggest game and esport the video and analysis has a hole bigger than the donut that's around it.

[@theotherohlourdespadua1131]

Not surprised about Riot Games. This is the same company that was much more successful in hiding their sexual harrassment problem from the public compared to Acti-Blizz and they were the worse offender of the two. Them having a tight hold on information gave them some leverage...

[@iulioh]

@@theotherohlourdespadua1131 Oh man, that's a little in poor taste to bring up randomly in a non related discussion, every major company had problems like that because humans tends to be shitty .

[@HdbeWydvd]

Korean esports works because in general, any korean sports are not profitable. Korean sports scene is almost like a charity of chebeoul&government giving people something to see. Half of baseball teams are unprofitable, 75% of soccer team is basically run by government. So to please them players were paid peanuts. In late 2000s, the biggest names in korean esports got 100k because chebeoul would not spend more than that. When eport blew up(and with it their salary) Samsung immediately sold their team. Now almost every team are unprofitable and with Koreans are running out of talent(by having 0 kids) korean esports are seeing cracks at the moment.

[@Darkrezta]

so if it's true that league or valorant proved that esports could "working" which teams profitable from it? I never seen any esport teams at least in NA that profitable at all.

[@screenwatcher949]

Awesome topic

[@ssd431]

Second that

[@IOverlord]

Ah finally. Thanks Richard Lewis

[@heinrichrahm1531]

Very glad to see a comment mentioning him this high up

[@ebile]

lewis will call saudi a blood money state and then support israel, no self awareness at all.

[@phhiemstra]

Completely agree.

[@charliecannistraci2175]

@@heinrichrahm1531same

[@Tib1010]

Hands down the greatest journalist in esports. He might be insufferable on twitter once in awhile but the work he does is beyond world class.

[@HunterD510]

The target consumer for esports doesn’t seem very valuable to me. I wonder what their break even point is on the customer acquisition costs and how long it takes to reach that break even point on average.

[@cyrkielnetwork]

Traditional sports would also not be profitable without big public help. In every school there are gyms, courts, tracks, pools etc. and kids are encouraged to use them. Verious competitions on all levels are organised, local teams are supported, they get stadiums founded by cities etc. Without all of this much less people would care and that's why in some countries some sport are more popular and some less. Vast majority of sports are not profitable (even if they are popular in different country), because they don't get public support. In case of e-sport the only way how it should be viewed is as part of game marketing.

[@Materialist39]

This is such a phenomenal video and this topic needs a clear-headed post mortem. It’s wild that people like Slasher have predicted everything you discussed as early as 2011. Also, most importantly, what’s your starcraft race?

[@rileykron6092]

Esports is an industry that only works in low interest markets.

[@ThreeBlackBirds]

Loved this. Subbed and looking forward to watching more. 👍

[@bullmk]

What an excellent video. I love the graphs too.

[@todo9633]

The huge losses are the same thing happening in regular sports, but advertisers and investors haven't quite caught on to the grift there.

[@BetterSubstance]

I really love your videos for your out-of-the-box topics 🙌

[@kaceydillin7367]

0:07 that looks like a young Life! The greatest Zerg in SC2 history!

[@afwaller]

Esports is sustainable and will last. But it’s not like sports. It’s more like card or board games. The proper analogy isn’t the NFL or MLB; esports is like chess or poker. The longest lasting esports game is brood war, with long term success for players, but only in the same way that successful chess players have careers. Ultimately you don’t see chess “teams” of the best players, dedicated “chess stadiums” with huge valuations, or billions spent on chess merchandise. Esports will eventually settle into a similar pattern. Individual players can and will succeed on the basis of skill and fans, but it’s not a profitable space for teams, organizations, or venture capital investment. You see the same with esports already - it’s streamers and “content creators” - players who show games that viewers want to see - that succeed in esports. And you see the same thing with chess and poker. Chess and poker streamers and personalities have huge success and even sponsors. But no company is owning “chess” and making money, and no company is owning “poker” and making bank.

[@Logholders]

CS is bigger than brood war and has been around just as long

[@AL-lh2ht]

You do know the biggest esports are team based ones right?

[@beam5655]

Chess is a good comparison, but poker isn't because poker is funded by player buy-ins.

[@Crossovahh]

CS is still huge and came out in 1999, in 2024 starcraft is a tiny niche eSport by comparison.

[@yurie2388]

@@beam5655 To be honest that might be a viable model as well. Each team/player pays to join the tournament, a small cut to the organizer and the winner takes the money. Will not be any serious money in it as in Poker though, there is too little luck to confuse bad players.

[@banhartday]

As someone who worked in gaming 12 years including Blizzard and Riot and was an avid watcher of the competitive League scene for many years, esports deserves its downfall 🎉

[@JPa-x8p]

It does, especially within the fgc.

[@incredulousmidwit]

It’s just sad to see how downhill League went from the golden ages of Season 3. I miss it.

[@JPa-x8p]

@@incredulousmidwit Jinx, Caitlin, and Vi were mistakes

[@incredulousmidwit]

@@JPa-x8p Nah they were great additions. Unlike Yasuo and his ilk.

[@rhyzhyn]

8:26 bro calling DOTA2 TIER 2 ESPORTS is Crazy. 🤣🤣🤣

[@RyanIZReaper]

You should do a video on Blockchain/Crypto. I.e Web 3 gaming, gambling, ICOs, and miscellaneous failed use cases for blockchain technology.

[@Garage405]

It's difficult to run a business when the viewers can't/won't buy anything. pay per view, merch, ect.

[@Shay416]

Do you mean not all teams offer mech?

[@homiga1]

Viewers used to spend money. Before Riot took over the Korean broadcast there was OGN who paywalled 720p and VODs of the Korean events behind a subscription. They made tens of millions a year from their English broadcast side alone all while the Korean broadcast being their main focus and also broadcasting on TV. Then Riot took over and got rid of all subscriptions and made people get used to getting everything for free.

[@ab466]

free shit gimme gimme

[@refraysmusic]

How is this different from traditional sports?

[@Garage405]

@@refraysmusic in what way is it the same? If you want to watch a sports match or have access to the VODs you'll have to pay for a subscription. The matches in their entirety are not available for free, unlike e-sports. Traditional sports fans are far more likely to spend money on jerseys and other team items.

[@j-sun3821]

Thank you for covering this and the great gaming moments at the end was the cherry on top.

[@Flom]

good vid, the funniest part to me was how you can easily tell modern mba was/is a starcraft player with the immediate vitriol for bobby kotick and how SC2 was managed

[@littlekirby6]

I can confirm that Mario Ho graduated from MIT in 2017 with a BS degree in Management. Technically speaking, there is no such degree for finance, so I'm assuming maybe he specialized in finance classes for his degree. Anyways, there's no way for me to know though if he really is "the youngest graduate" in finance without knowing his birthday, and everyone else that has ever gotten the Management degree.

[@-nomi.-]

This is why I've always felt that we should champion community-born events over the spectacle of corporate eSports. So much competition that started within communities has been gutted by the promise of bigger and better shows only to end up with less than what they started with when the investors decided to cut their losses.

[@Ksgamer103]

Its very cool to watch this channel grow from not having sponsors way back when it first started, to having Net Suite sponsoring it. congratulations!

[@itryen7632]

I never even paid attention to esports, but i've always just known that there was no way to make it profitable.

[@matthewyodhes2842]

I feel like you are really finding tour voice in these latest videos. Youve gotten better at showing why you find a sector unique and interesting when I might never have thought to inspect it or dive deep. Keep exploring your own interests!

[@Ps5prolite]

China is the future. US market is irrelevant

[@skrattaoppar9753]

This is probably why T1 is pushing their LoL team to more advertising and branding them as idols rather than esports players at the cost of their performance. T1's current roster miraculously won just 1 Worlds and 1 EWC. GEN's roster as well is just too expensive to keep even if they won the World Championship. This is why LCK currently has a rise of Banks and Insurance company joining the league rather than established esports teams. In 5 years I feel like the sport will be dominated by insurance and bank teams rather than GEN/KT/T1

[@yassirelhidani6803]

@@skrattaoppar9753 T1 is making alot of money right now with the skins of worlds and the ahri skin , also the EWC ranking they got 1.5m , and tons of sponsor deals , if they still can't profit out of this , then there is no reason to keep running the org in esports , and if T1 is not profitable , then the LCK teams are definitely on life support dying out , so LCK should just die and will not compete with the rest of the leagues , i don't believe that T1 is not profiting , because that will be insane.

[@skrattaoppar9753]

@@yassirelhidani6803 i'm not saying they are not profiting but rather they need their personality to gain money unlike any other LCK Team

[@yassirelhidani6803]

​@@skrattaoppar9753 riot should do something about this stuff , giving teams skins share of the money isn't enough it seems , but i actually don't know if T1 is profitable lol.

[@skrattaoppar9753]

@@yassirelhidani6803 esports should have a city to represent even if the image is the esports org, like Kwangdong Freecs I think and some LPL teams where they put their city on their name. It's gonna have a guaranteed fanbase. Overwatcg had an idea but it was executed so badly with the city represent. I like COD's way where the banner is the org but still has a city to represent and I think that's hype af, even if I don't like COD esports that much.

[@yassirelhidani6803]

@@skrattaoppar9753 teams in lck already have a sizeable fans of their own , but it isn't much , you can't compare korea to china , only T1 that has that much of fans in korea and outside of korea , im pretty sure most of the korean teams are barely surviving because of the viewership T1 brings to the lck and sponsorship deals shared equally with the lck teams. Maybe riot will let the saudis and gambling sponsorships take control of things.

[@craphoone]

Love this, I have been looking for a great breakdown of the inflated finance and mismanagement of esports for a long time!

[@timergooff]

the main problem is esports' core audiences are teenagers and young adults - the part of the demographics that just isn't flush with cash, it is really as simple as this

[@thierryferreira4825]

No , is far more complicated , they have money they just have been condicioned to expect all of this content for free, they have money to spend on their favorite streamer or videogames after all, but after so many years of being given free shit they refuse to pay , even 5 dollars to watch a 4 day tounament is considered outragios by many , its a real problem .

[@AL-lh2ht]

The oldest esports have been around for decades. Why speak when you are clearly don't know what your talking about?

[@timergooff]

@@AL-lh2ht you sound like a guy that invested in these esport stocks and lost your shirts

[@agyarhardjasudjana7804]

That's part of it. It may be true that kids have more cash now, but how many of them do? Will it be enough to sustain the million dollar business? And moreover, is watching these tournaments important for casual gamers? People bought sports merchandise and tickets because the main product and experience is in the competition itself. In gaming, the experience and the product is already in the game you bought. Why would I spend time and money watching people play games when I already have time playing 😂

[@Jack-sq6xb]

@@thierryferreira4825I’ll spend money in person otherwise ill simply go with a different option. I dont care enough to spend money on regular sports why would i on esports

[@sspadam]

I stopped watching CS:GO matches in 2018 when i grew up a little bit, in 2024 watching this as a now small business owner, it opens my eyes to the reality of these businesses

[@mtalhaawais]

Love the channel and the narration style.

[@naught330]

Phenomenal watch as a once aspiring gamer

[@andyrosa1470]

Did bro just casually expose one of these companies “Midnight Gaming” as a money laundering front for some criminal org? 😂😂😂 Where tf did they get that $18M???

[@bfrehksdhf]

From the CIA.

[@DiamondKingStudios]

The most I’ve ever been involved with esports was on the high school level when schools in my area were trying to compete statewide. This was around when esports was becoming a big trend, and my “cutting-edge technology/one Chromebook for every grade 6-12 student” school was trying to follow the hype. The one title that was sure to become a team in our school was _Super Smash Bros. Ultimate_ but my sister was trying to organize a team of _Splatoon 2_ players (she has always had quite an interest in that series). She ended up training me somewhat in both games over the summer, though I never got good at any of them. Either way, when autumn arrived the _Smash Bros._ team ended up being the only one, and they did rather well for the school, but they never got quite the same recognition as the preexisting sports teams (especially football). I always had an idea it’d get progressively more insane the further up the competitive tiers went.

[@BusinessDymystified]

Ironically even major game publishers like Embracer group and Ubisoft have started turning to Saudi Arabia and China since they are struggling financially. Saudi's sovereign wealth fund owns 8.3% of Embracer group and embracer was forced to sell off saber interactive and gearbox studios at a loss of $247 million and $840 million after Saudi failed to fund their acquisitions. Ubisoft on the other hand let Tencent buy 49.9% of the holding company that owns Ubisoft in a $300 million deal. Money it intends to use to refinance its loans and for stock buy backs

[@Alpha23TV]

Great info!

[@BusinessDymystified]

@@Alpha23TV I've actually made a video on Ubisoft's tdouble, if you are interested you can check it out..

[@GentlemansCombatives]

Who's paying 247 million dollars for saber? Jesus christ

[@BusinessDymystified]

@@GentlemansCombatives it was 2020 and every company that got a little uptick from the pandemic assumed those conditions would go on even after the pandemic so embracer group went on a buying spree of course funded by daddy Saudi.

[@warren1078]

Wait until advertisers find out that zoomer and late milennials dont have any fucking money to spare lmao

[@CSharpM7_]

I never thought I'd see the Wombo Combo referenced on this channel but here we are

[@sf9ersfan33]

I think the biggest hidden issue for esports is the lack of revenue generation from traditional avenues like TV deals. Even if mainstream titles got to consistent viewership levels to match major sports, there’s never going to be the ability to sell a league to a platform for significant money that also keeps the viewership. Viewership is far too concentrated on Twitch for free for basically all fans. Overwatch League viewership cratered the day they moved to KZbin exclusive broadcasts and it wasn’t worth it.

[@brocklee7067]

Capitalism ruined esports

[@brocklee7067]

Also, the reasons why people say esports are dead is because they've become enamored with the spectacle and not the games. The communities are still strong and games are good when the communities arent necessarily mainstream. Crowdfunded tourneys are the ones I enjoy the most.

[@ravecrab23]

​@@brocklee7067the communities are definitely suffering from the general feeling of decline though, sadly.

[@LiterallyBillNye]

An Oracle NetSuite sponsorship, never seen one of those before lmao

[@dexdevlon]

I just want to say your videos are absolutely amazing, no click-bait thumbnails, great content, every video I learn something new.

[@Gavo172]

Damn, this video is fantastic journalism. I've been pretty plugged into the space and I learned so many new things from this

[@crazycat6lad918]

I'm not really in to esports, it's always seemed a bit wanky to me. But I think the major reason it failed is they tried to grow too fast, too soon. All leagues started small and grew over time, but esports companies always wanted to be a multi million, multi billion dollar league from the start. There was no reasonable, sustainable growth.

[@701delbronx8]

They also deincentivized the players from creating personalities and drama by having the threat of sponsorships being taken away. Just robotic nerds… they needed a showman like Vince McMahon running things. Like xQc was banned from pro Overwatch for sending an emoji in a twitch livestream chat.

[@MrPek-fe9fp]

The eSports scene of 2015-18 was such a trip. Love those times.

[@compromisedssh]

Modern MBA is getting meaner with his descriptions lol. I like it. There's nothing wrong with calling a spade a spade. This video wasn't as ice cold as the AI one, but I ducked after the "like drawing blood from a stone" shot popped off. Bonus points for wombo combo.

[@Ridghost]

As someone who has followed the large esports (starcraft, LoL, and Valorant), and the smaller stuff (smash, and FGC)... it's good to see that there are still some tournaments from the grassroots in the more grassroots titles like street fighter and smash which do things normally. Tickets, merch and sponsorships pay for the event and prize pool, and it can sustain itself by growing naturally. We don't see much 'sustainability' in esports outside of sustainably scamming young naive fans, young naive players, old naive investors, and occasionally middle age naive owners. Only people not getting railed at some point are the Devs. Edit: only way for esports to exist sustainably is for the devs to release the numbers for associated marketing campaigns for esports, so teams can ask for a fair split.... or start charging a subscription fee. Can't produce these events and support the scene for free.

[@chemicheto]

crazy this is out at the same time as casually explained video about eSports

[@MIKAEL212345]

The only way this works is if the publisher funds esports. If esports are super effective advertising that keeps games active well past their expected end date (I know so many people that quit League of Legends, only to come back after watching Worlds), then that advertising should be paid for by the company. Expecting your advertising department to be directly profitable is crazy.

[@technetium9653]

There are no new eyes through eSports, eSports is for hardcore fans; maybe they'll buy the overpriced skin, but no one got into the game through eSports, everyone gets to eSports through the game

[@caiotheodore9751]

"most of the money goes to the players and the content creators" this being treated as somehow a bad thing is so ridiculous lmao

[@Alpha23TV]

Imagine running McDonald’s where 80% of the revenue went to the employees. Great as a socialist experiment… also the same reason why companies that try this go out of business in less than 10 years… Since they aren’t investing back into the business. The point he is making is that there isn’t *really* a business there at all… rather it is a borderline Ponzy scheme where the talent makes all the money and investors and shareholders get (to put it mildly) PHVCKED…

[@iulioh]

@@caiotheodore9751 It kinda is when the buisness isn't profitable. Or let me phrase it better, it isn't good for anyone putting money in the buisness but good for everyone else.

[@akj3344]

It is a bad thing. If shareholders dont get any value out of it, the business will die eventually.

[@stryker914]

They are extremely overpaid, this is well known

[@homiga1]

It's a bad thing because their wages skyrocketed after team organizations were forced by Riot to partner up with VC and similar investment groups else they wouldn't be allowed into the newly franchised league. This ended up making average player wages go from 20k a year to over 100k a year for a while. Riot gave a subsidy of about 30k per player all the while there was no income. So orgs just burned all their investment money, had nowhere to grow and have been shrinking for over half a decade now. Giving out multimillion dollar deals to the biggest names sounds like a good thing for the players but then take into account there's no income to fund those deals. So all you get is a new organization burning bright like a star for 2-3 years then collapsing because they have no money left, getting rid of all their players and staff and only hiring the mandatory minimum while paying minimum wages.

[@acllhes]

The games being shit is what killed it.

[@KJM3SMG]

great video! There's so much stuff here that I was exposed to, like TGS, Overwatch League, and dealing with Blizzard (good), vs Activision (bad), and even the challenge of that esports venue in Las Vegas. The biz of esports never really materialized for profit for us. The one positive I'd add is SC2 viewers like me have money and maturity to enjoy the skill of the players. Unfortunately, there aren't enough of us to matter, despite the quality over quantity claim I make.

[@lagunacinematics]

comp cod fan here and I knew it was downhill when I saw the player salaries. it's something people don't wanna talk about but the players (in cod at least) were making 300k+ AND taking half the winnings earnings. that leaves nothing for the org. also it is worth mentioning that covid slowed growth as well.

[@PatrickBiggsOBevur]

Sounds like closed leagues aren't the way to go. It should be an open competition for everyone similar to Ready Player One.

[@reappermen]

Plenty of esports tpurnaments also work that way, they are also loosing tons of money

[@PatrickBiggsOBevur]

@@reappermen I don't understand the comment. If an esport tournament was not closed league, then it wouldn't be part of the scams in this video. Let's say you create a game, everyone plays the game, then then winners go to a competition. If the profits from the game and the event exceed the costs of the game and the event, then it doesn't lose money unless nobody buys the game or nobody goes to the event. In a closed league, you are spending money before you even know how big the event is going to be. In an open league, you just spend money on the event based upon the size of the people playing. You don't pretend it's bigger than what it is or else you lose money. I'm not aware of any open esport tournament that lost money.

[@reappermen]

@@PatrickBiggsOBevur No, that is not the definition of open/closed leagues. A closed league is something like Overwatch league, where there where fixed teams that all had their slots, and no other team could participate. An open league is one where there is some kind of selection stage, where basically any team can compete in whatever way for one of the tournament slots. Every time a tournament happens, the selection is run again. Both the tournament organisers and some or all of the teams can spend money on that, and can thus make losses if they don't recoup their costs. I think you meant a grassroots/organic eSports scene that grows slowly over time instead of starting big right away with external investments?

[@dimatuprin]

Actually this is true for sure. That wasn't mentioned - Valve forced blast league to change their format to open league championship this year because of viewers demand. It's far more easy to form a team that can go far in eSports events than in regular sports and that is very appealing thing for competitive gamers and viewers.

[@ki6eki]

at the end the game developers are the ones making all the money, selling investors a dream if they bought an esports org

[@AwesomeLifeguard]

Bro, your content and insights from all the behind the scenes work is top tier. I will always watch your content. Thank you.