No matter how loud the fans cheer or how many viewers are present during the stream of a tournament, at the end of the day, the main purpose of any business is to generate a source of income. This past week, light has been shed on just how well the eSports industry is doing as it steps away from a charity-driven field to one of a legitimate, long-term business.
Major League Gaming Raises Millions:
It is no secret that Major League Gaming sets the standard for eSports competitions in North America. While they are the organization fans look to for providing the most cutting edge content, CEO Sundance DiGiovanni has repeated time and time again in interviews that his main concern with the organization was the infrequency of tournaments. Up until this year, MLG would host six championship events throughout the year, each lasting a weekend. DiGiovanni has stated in multiple interviews, “we are only relevant for about fifteen days a year.” As a business, having little to no attention during the other 350 days in a year is far from preferable. MLG is in the process of changing its structure to bring attention to the organization and the industry through events like the pay-per-view arenas.
During the past week, it had been reported that “it was filed with the SEC that MLG has raised another ound of cash, this time over $11 million, bringing the total capital raised around $70 million total.” Online news site, The Next Web, speculated the cause of this $11 million income:
Of course, the bolding is my own. From my perspective, here’s what went down with MLG thus far this year: MLG needed another round of cash to execute its 2012 plans to their fullest. Its investors were skittish about putting more cash into MLG with only its classic business model in place (huge events with sponsors kicking in dollars to advertise to the coveted young male demographic), so the company needed to show that it had other ways of making money. Enter the idea of paid-only events.
As Sundance said, ‘something came along a little bit quicker than planned.’ I take this as the need to prove to investors that MLG is a viable business, or that the company just needed to raise sooner than they expected. This led to the company needing to prove that its core idea ‘had wings.’ I take Sundance to mean by that statement: ‘will people pay for what we are providing?’ So, the company went ‘all in,’ to see what would happen.
That they transformed their own office into a studio for the event was likely no accident. I would bet that MLG was looking to run the event at the highest level it could, at the lowest cost possible. Therefore, by shaving some some expense by hosting the event themselves, they could provide the same value for viewers, and show a profit, which it could take to investors as proof that competitive gaming is no fantasy.
And, two weeks after the event was a success, the investment cleared.
Whether this be the case or not, it is now no secret that MLG is changing eSports in North America. I am very excited to see the remainder of MLG’s plans throughout the year.
Those interested in Major League Gaming should visit their website at http://www.majorleaguegaming.com/and tune in to the Winter Championships hosted in Columbus, Ohio on March 23-25.
ESports Gets Exposure at MIT Sloan’s
Sports Analytics Conference:
Every year, MIT Sloan hosts the Sports Analytics Conference sponsored by ESPN. The goal of the conference is to discuss the growth of sports as a business. For the first time ever, eSports industry leaders were asked to speak for an hour on an hour-long panel. Members of the panel were Mike Morhaime (Blizzard Entertainment, CEO), Sundance DiGiovanni (Major League Gaming, CEO), Alexander Garfield (Team Evil Geniuses, CEO), and Sean “Day” Plott (Day9 TV, CEO). Questions on the panel involved the origins of eSports, where eSports is headed, and proposed business models for increasing exposure to the industry. It was one of the most enlightening videos about eSports, and I would encourage anyone who is not fully involved with eSports to check out the video below and learn how the industry functions: