Rising Costs of eSports

I would like to bet for most people reading this blog, hearing the term “eSports” reminds them of the Starcraft II, World of Warcraft, League of Legends, and other spectacular sporting events which are streamed over the Internet. For most individuals who do not play computer games or do not watch these events, they might not get the connection. Events like Major League Gaming and Intel Extreme Masters are not necessarily mainstream events, but they are popular amongst gamers because they are professional events where gamers are able to take it to the next level for prize money. They also lead to entertaining matches.

Lately there has been some “outrage” so to speak with how Major League Gaming has changed their pricing structure to accommodate some special tournaments in with their regularly scheduled tournaments with professional players. I think a lot of people are misunderstanding the purpose of the MLG Winter Arena PPV and the purpose of having to pay for the event. I also think the community at large is misunderstanding that for many, MLG is not a hobby but actually a job which they need to be paid for in order for it to continue.

Just like any business, Major League Gaming has a lot of expenses to cover and they have to be able to provide to the staff members which help produce the shows, the vendors which provide them with products and services which are essential to a successfully streamed event, and the players which provided the entertainment. MLG is going out on a limb to provide a PPV event to stand beside their regularly scheduled events. This is not a replacement. This is an addition.

The idea is for the viewers to pay $20 a person in order to watch a weekend of great Starcraft II matches which are played by some of the best players around the world. At first thought I started thinking about the value of the purchase and thought that it was a bad idea on MLG’s part because of the steep rise in price compared to other events. Then I started to realize what was actually going on. This is an additional event which is being given out free a week later in the format of VODs.

It’s an event for those who want to pay for something to get something that might be a higher quality in production than their normal tournaments. They are trying to provide a new product to their customers and to fault them for trying something new is the childish view of many who merely want everything handed to them for free. For others, the main problem is the steep cost in comparison to other events which is a fair view in my opinion.

There are a large number of college students and minors who are interested in eSports and have been able to watch the free streams or get the HD streams for a cheap cost in a monthly subscription. However, people need to realize that they are still able to watch the tournament albeit a week later. This is not a replacement event, therefore the pro circuit is still going to be available for those that are interested in seeing how the large tournament goes. This is a completely separate event, and therefore it is not something which people have to pay for to access, only to get to watch it live.

Consider it like going to the movies. You could see the movie right now for about $20 after you pay for the ticket, your drink, and possibly even more than that if you’re getting candy and snacks. You could very well decide not to see that movie at the theater and check it out months later when it is available on DVD and later when it is available on demand from a cable or satellite provider or even through online streaming services. It’s all about choice. Those other choices are cheaper options, but they are not necessarily available when the movie first comes out.

It’s the same concept here, except MLG is nice enough to provide the VODs within a week of the event instead of making you wait months. The price itself is rather low considering the situation. I honestly wonder the viability of the tournament considering the outrage and the people which are vowing not to purchase the tournament because of the principle. There is not much of a principle aside from hindering the development of the tournament and the concept. Voicing your opinion is one thing, but bashing a company for making a move which they think might be the right one is another. We should talk with Sundance and MLG about making changes to the pricing structure among other things in a civil fashion. It’s very clear that they are listening.

I think people need to understand the costs of running a tournament. Here are some things to consider:

The Venue

MLG needs a physical location to host the event. These costs can range from a tens of thousands to half a million to rent a single location, depending on the location. MLG is most likely fiscally responsible about picking a location otherwise this would not be a viable business. Different venues are going to have different costs associated based on the location.

Internet Connection

Think about having so many players connected to online services at once, the connections needed to stream to the service which they are using to redistribute the signal, and other connections which they need to be able to communicate with the players, viewers, and staff which reside outside of the event. This connection needs to be powerful and stable. It’s going to be expensive.

Physical Hardware

It costs money to purchase or rent machines for an event. Outside of this, you need to pay someone or a group of people to maintain the machines and if there are hardware problems you may need to replace hard drives, physical components, or even get specialized solutions figured out for common problems with the machines.

Let’s not forget that the organizer needs to ensure that they have the network setup in order to have all of the machines on the Internet connection. Unlike back in the day, most events need to have an active Internet connection since many games are now using online validation in order to ensure that there is no cheating and what-not. In this case, Starcraft II requires Battle.net in order to play multi-player.

Staff

An entire production staff is required for every single event. You have people which handle the physical setup of the staging areas, the machines, the chairs, booths, and the audio and video equipment for each event. This is a very short list, there are literally hundreds of roles which get played in order to make sure an event goes smoothly and many people taking multiple roles and responsibilities. You never really understand just how much effort goes into an event until you have been there yourself for the setup and operation. These people need to be paid otherwise they cannot help; not everyone can just give up their time and travel costs to be there to help out.

Travel

Both staff members and players need to travel to the event especially since MLG events are held across the United States and Canada. Travel is going to have to be provided to all staff which are going to attend the event. For some events, players are even given the finances to travel due to their influence on the tournament and the requirements of having strong players at the event for a more interesting experience. Traveling is expensive, especially when you’re moving expensive equipment from one location to another. Also imagine the storage costs for all of the equipment if it is owned by MLG rather than being rented for the event. It needs to be stored somewhere.

The Bottom Line

I think most people underestimate the costs of running an event of any kind, much less an eSports event which thousands are going to be watching via a stream. I don’t want to put dollar amounts or estimates here. I will fully admit that I do not know of the finances of MLG nor do I have a strong point of reference. I am sure everyone could come up with their own estimates if they start to consider each of the parts differently and add it up at the end.

I am not even hitting the bottom of the barrel. There are definitely more costs ranging from the costs of finding professionals who are interested in helping out with the events, design costs, the costs associated with design and development of their website as well as the maintenance and hosting of the website itself, and many other considerations.

Before the community as a whole starts attacking Major League Gaming over charging $20 for virtual admission to a high quality stream of a professional event I think people should consider some other aspects of entertainment which charge their customers quite a lot more in comparison such as other sporting events. Think about the price of MMA fights in PPV for instance.

If this tournament proves to be too much to handle for MLG for the amount of money which they are actually able to make or if they decide that they are unable to get as much of a reach at $20, I am sure they will modify the process into something that will work better. Obviously the tournament they are offering is not going to interest all of their viewers, but that doesn’t make them a bad company nor does it make them obligated to change it. It’s a separate offering as an additional opportunity to watch the greats play. We should applaud them as we would anyone else for trying something different and risking the expenses for funding such a tournament. If this doesn’t work out then it doesn’t work out. Let’s continue to show our support for them as with the rest of the organizations which try to further eSports and remember that this is an enthusiast business; it will be very hard to compete with other forms of entertainment because of that. We should not expect them to.

If you’re interested in checking out the event click here for more information.