The International 2014 – Is Crowd Funding the Future of Esports?
Not too many hours ago the International 2014 surpassed last years International by two million dollars, which is huge milestone in such a small time frame. Not many probably expected to see Over 4,85 Million dollar Esports tournament this year, but many can expect that the prize pool we get this year, will be even larger in next one. So those who don’t know how the funding in International works; Your able to buy the Compendium for 7,19€ which of 2,5€ will be added to actual prize pool, which is around 30% of the actual cost. Valve does add starter prize pool of 1,6 Million Dollars, so in case no one would support (Which is unlikely of course).
But it is no secret that DOTA 2 has immense profit margins for Valve. They are making shit ton of money, without practically doing nothing. So that got me really wondering, is it ethically right to ask people to fund valve’s tournaments?
Should major companies be able to ask for funding?
Imagine if Will Smith would open a Kickstarter and ask people to fund his Son’s birthday party, a man filled with millions of dollars would ask people with lower incomes to contribute their money so he could throw a party for his millionaire Son? Doesn’t seem right to me. No matter how popular or liked Jayden Smith is that would be absurd.
You can see lot of this in the future, where people with money already asking crowds of people to fund their Movies or projects in Indiegogo/Kickstarter/or other mediums. I totally would get the funding part if you were small company or Esports team, which don’t actually get so much money via tournaments or streaming. Hi-Rez did promotional skin for their launch tournament and that skin pretty much added another 100k to the tournaments prize pool, but difference between Hi-Rez and Valve is that, Hi-Rez is indie company not a huge behemoth with hundreds of millions cash to spend.
Is Steam Workshop fair for the contributors?
I feel this is also great time to talk about the DOTA 2 Workshop Business Model also. To really make you understand the point i will make real life situation comparison for this one. Breaking it down to scenarios A and B. The second one being the valves model.
- Scenario – A) Let’s say i invent a shoes that use magnets and has no strings to tie the shoes up to your feet. Your able to adjust easy & fast the shoes your wearing with these magnet things. I Don’t own a company and don’t have necessary money to fund mass production or sell it. So i decide to approach Shoe company PUMA and ask them for a licensing deal. Since i have patent for my product, PUMA has to deal with me in order to get these shoes in their stores. As for the deal itself, what this holds pretty much is that they will manufacture the shoes and sell them. They will handle the creation costs and manufacture them in china for low price or wherever. Lets say shoes sell for 10$ a pair. I will get 10% royalty of each shoes sold which is 1$, this royalty percentage is pretty much the standard on many industries.
- Scenario – B) In DOTA 2 workshop it goes like this. You make a headpiece or weapon and you submit it and maybe it gets approved. In Workshop you will get 25% of each copy sold of your item. Surely 25% is higher than the 10% i mentioned earlier, but PUMA has the actual costs of making the product, in this scenario Valve doesn’t need to anything else, but add the already made item by you to the store and get huge monster cut of 75% of your PRODUCT. What they only have is pretty much the platform, i imagine that adding one set will take probably 2-5h to implement inside the game. That is nothing compared how much you spend on making the model or how much money valve is getting from such low effort.
So my verdict in this point in this that Valve is putting very low effort and risk, by using crowd-funding to create their for them and fund their International Tournament. Surely there is many great sides to this, so people have the option to up-vote an item in Workshop or decide not to buy compendium or to buy it. But i still can’t get my head around the milestones rewards that doesn’t really take that much money or time to implement. Also i wish valve had boosted themselves the base prize pool more this year.
Is Huge Prize Pools Great Thing For The Scene?
I saw Dendi talk about this bit in a recent interview, where he mentioned his team might not have taken seriously a tournament because the prize pool was significantly lower than International. While this may not be biggest problem, but i’m pretty shocked than more than half of the International teams leave empty handed. It becomes huge problem in any Esports scene if 95% of the money goes to top 5 teams most of the time.
You have to give some money to lower tier teams to keep them playing, otherwise they will quit and retire. This will also not breed any new talent if people at bottom think, if we don’t beat the top 5, we can’t make any money in the scene. In a stable competitive environment even lower tier teams should have something else to play for than canned tuna and noodles. This sort of decision from Valve, is bit absurd if you ask me.
While the event is probably going to be great, i wish Valve would step up their game a bit regarding investing their own money and focusing getting more work done themselves. I would be really interested to see Riot Games or Blizzard try Crowd funding too and see how big prize pools they could possibly get. Expect to see more coverage about The International 2014 in following weeks.