This post topic came from Patreon Writers’ Room patron Charlie Cox!
I was impressed that this issue came up in discussion in our Patreon community right before it hit the news once again. Many of us who’ve been around gaming long enough have had some brush with, or entertained the idea of competing at games. My journey started long ago at a Halo tournament with friends at a local game store before I even owned an Xbox–that went about as well for me as you might guess–but I’ve also gunned for prizes in Forza promotions, raced around in the occasional Rocket League tournament, and even kept myself awake over ten dollars and bragging rights with Tetris 99. Granted, these days I’d be a lot more interested in creating a new esport than “going pro,” yet the momentum of competitive gaming has shifted virtually everything and everyone in its path. For this reason, I thought the question raised in the group was a good one: how much is competitive gaming actually impacting the market?
The surprising and unsurprising realities of modern competitive gaming
Some of the figures associated with esports are staggering, even if they’re totally in line with the steady progress that has already lasted more than a decade. We happily competed for t-shirts and soda in the early 2000s, never worrying much that one day a game called Dota 2 would earn a tournament-winning team over 11 million dollars, but with the potent combination of competitive drive and lucrative sponsorship opportunities, explosive growth was all but guaranteed.
Much of the strength of esports is in how much revenue potential it gathers from a variety of sources. Tournament venues are always big business, rivaling conventions and concerts. On-location events open up opportunities for merchandising and event sponsorship. With sufficient popularity, broadcasting takes off, generating new offsite audiences and providing advertising openings. Twitch streaming and YouTube content brings in all of its own offerings. Esports’ impact has rippled outward as budgets exploded until we ended up with a new institution resembling the PGA Tour on crack.
Valve has been repeatedly smashing its own prize pool records at Dota’s International tournament for years. Players were undoubtedly excited about the 1.6 million dollar pool in 2011, but the 2018 pool of 25.5 million was rightly described as “life-changing.” There’s room to debate the merits of battle royal games as esports, but there’s not much questioning the money: Epic decided in 2018 to provide 100 million dollars to fund Fortnite’s first year of official competition. On the mobile side, Hearthstone and Clash Royale’s publishers each put up over 1 million in prize money last year.
Tournaments are such a solid investment, Blizzard felt comfortable building a dedicated esports arena in Los Angeles County, and Comcast Spectacor is about to follow suit with its own 50 million dollar esports arena in South Philadelphia. Yet, we don’t need to attend a championship event at one of these stunning venues to feel the monumental impact of modern competitive gaming. One of the most surprising changes has been esports’ hugely increased prevalence in our culture.
The new competitive scene
The rapid rise of esports has left us with a few changes we’ve had to scramble to figure out. It’s getting more difficult each day to get young people to look beyond video games for their future. Granted, young gamers are little more likely to build a life for themselves by going pro than they might be by taking a run at the NFL, but competitive gaming creates a new list of rich teenagers and young adults every year. Speaking of the NFL, Riot Games apparently played a hand in the US government’s recent decision to classify esports competitors as professional athletes for the purposes of issuing visas (a good thing), and assessing taxes (rest in peace).
While it may seem that competitive gaming favors only the elite few at the top, a variety of leagues are opening up development divisions to create a sort of minor league to meet the needs of players on their way in and create a more productive level from which to get called up. One data analyst went as far as to pinpoint secondary leagues as the most essential step for Valve to support its primary leagues (not bigger venues or prize pools) for both CS:Go and Dota 2. To date, there are over 120 higher education institutions with varsity esports programs, many of which recognize a new governing body, the National Association of Collegiate Esports, and yes, incoming students are pulling down scholarship money to come play games.
Put simply: the game industry can’t survive without players, and esports is gradually offering more and more players a life they never thought possible. Between players, studios, and publishers, everyone who can bring what it takes to the table wins.
How key studios and publishers have adapted
Epic has always been near the eye of the competitive storm. Blowing whole summer days at friends’ houses, seated around a couple of PCs loaded with Unreal Tournament and equipped with a decent internet connection will probably always stand out among my fondest young adult memories. Considering the pro scene that developed around the campaign-focused Gears of War series, it sometimes seems as if Epic is unable to produce anything short of esports gold.
When the word first spread about Fortnite’s Battle Royal mode, most players weren’t confused about the likelihood that this was Epic rapidly building a skyhigh tower on top of PUBG’s foundation, but those familiar with Epic’s track record wisely took it seriously anyway. Just about everyone was still surprised by just how high the game has climbed. GameSpot says Fortnite was at one point making $2 million daily on iphones alone, for an iOS total of more than $300 million before November of last year. when the game reached Android, Epic decided to cut out the Google Play store, which SensorTower.com estimates may have cost Google over $50 million.
To Epic’s credit, They’ve done a few overwhelmingly positive things with that money. Epic’s new game store, as we’ve discussed several times, is giving Valve’s Steam store some truly formidable competition for the first time in its history. It has also reduced its revenue cut of assets sold in the Unreal Engine Marketplace from 30% to 12%. Epic also takes only 12% of game sales in the Epic store, and Unreal Engine games sold there will not lose an additional 5% for engine licensing. Epic boss, Tim Sweeney directly attributed these moves to Fortnite’s success, reports VentureBeat.
Unfortunately, Fortnite’s success hasn’t been all good news. Epic followed what would turn out to be an unfortunate trend in successful esports studios: it halted work on basically all other development projects. Paragon was cancelled abruptly with refunds issued to applicable customers. Unreal Tournament didn’t fare any better. Epic’s collaboration with fans and Unreal Engine developers extended the series’ life, but only until Fortnite duty called.
“Unreal Tournament remains available in the store, but isn’t actively developed,” Sweeney told Variety. It would be perfectly fair to point out Epic’s extenuating circumstances; with an emerging game store to manage and what may well be the most popular commercially available game engine on the market to deal with, the future of any of Epic’s prior games was uncertain regardless, but it seems telling that even the Save the World side of Fortnite is being switched over to free-to-play, and even that update will be a year late before long.
Blizzard is another huge name from the earliest days of competitive gaming. StarCraft alone could have paved the way for a thriving worldwide competitive scene, but along came Overwatch and secured Blizzard’s place at the top all over again. Blizzard’s non-competitive titles, however, are legendary in their own right. The Diablo series and World of Warcraft, for example, both still have huge player bases to consider.
Old-school Blizzard fans seem to be getting an unbelievably raw deal right now. No Diablo 4 has been promised, the Diablo mobile game announcement was panned so hard, the studio would be forgiven for simply never bringing it up again. World of Warcraft players who, mind you, pay to play their game monthly, the same way the rest of us pay for Netflix and drinking water, have been waiting for their next big thing: a re-release of classic WoW, so players can return to a prior state of the game before changes were made that they hopefully found undesirable. What’s in it for StarCraft fans? StarCraft: Remastered has been out for a while. StarCraft II has been switched over to free-to-play, apparently for the purposes of earning revenue strictly through microtransactions, but also relieving any pressure to keep up any steady or continued development. Though it would seem the series has brought Blizzard loads of success, the competitive interest is perhaps too inconsistent globally to hold the studio’s attention. Most of this is nothing compared to the day Heroes of the Storm competitors simply woke up jobless.
Overwatch is a novel game and all, but “Overwatch or GTFO” is not the strategy most of us were hoping to see from this legendary studio.
Respawn Entertainment: a new hope?
Respawn Entertainment, the Beverly Hills brainchild of one of Infinity Ward’s co-founders, has been kicking a lot of ass since 2014. Titanfall and Titanfall 2 in 2014 and 2016 performed well enough for EA that it acquired the studio for over $300 million in cash and equity the following year. By all accounts, EA and Respawn immediately sat down to discuss a new Titanfall game, but the allure of the battle royale genre was likely too much for EA to pass up. As you know, Apex Legends arrived earlier this year. Personally, it was a hard pass for me when I heard there were no titans involved, but most players are having a great time with it.
The reason Respawn is an interesting case study here is that the studio is still working on promising new non-battle royale games even as Apex Legends has begun to see wild success. Star Wars Jedi: Fallen Order is underway, and there’s also a virtual reality project in the works that has yet to be revealed. The timeline is important here, as one and possibly both of these projects were in the works prior to Apex’s release, but at least nothing has been cancelled, and the studio/publisher team seems determined to create a variety of offerings for players instead of halting everything but Twitch-candy competitive games. As I suggested earlier, I was hard on Respawn because I’m a big fan of Titanfall, but using competitive gaming and esports money (still using those terms loosely on battle royale) to invest in a wider range of genres is exactly what I’d like to see more of. Even EA is doing right by me with this strategy.
I know I took a bit of a dark turn as we looked at the trends among big studios, but I’m overall highly optimistic about the growth of esports. Few developments in gaming have been as widely positive for people from all walks of life, including players, viewers, studio teams, publishers, venues, broadcasters, the list goes on forever. I could do a whole different post about how I would approach the possibility of an esports run with my kid, and it may well come up one day, but I would be entirely open to the possibility.
I also think we’re close to the next (first?) indie esports mega-hit. For many years, competitive games came from a recipe that required loads of experience, infrastructure, money, and momentum, but this is a day and age for standing on the shoulders of giants. Between the big commercially-available engines and cloud services like Azure and AWS competing to bring in new small developers, killer online experiences have never been within closer reach.
Ultimately, I think the changing tastes of gamers will act as an equalizer, which will enforce eventual limitations for esports games. I mean this as a positive effect! There is more than enough room for these superhits to bring in loads of revenue and allow players to battle for glory, but I think it will also keep developers creative and provide plenty to do for variety gamers. I do hope studios like Blizzard shift some focus back to the players who helped get them to this point, especially those poor WoW subscribers, but bringing in new players, providing opportunities, and drumming up new kinds of business is always going to have my support.