What I Want to Work on

Since I’m currently doing my own thing and feeling out opportunities, it seemed like a good idea to share some things I’ve been thinking about about in the gaming industry.

Before I begin, I want to make a disclaimer that the following problems are not the most important problems facing our industry. Rampant sexism and other inequities, mental health, and others are way more important. But these are problems I think I’m able to solve with my background and expertise. I’ll champion others that are willing to take up the mantle on more important ones when I see them being addressed.

With that said, here are the four problems I want to solve in the gaming industry.

The Runaway Valuation

We’ll start with the obvious.

A few years ago I gave a talk at GDC that got some people riled up. This was the first time I made a conscious effort to speak “Truth to Power” in some respect. I felt like it was the right time, and people in the scene needed to be reminded of the fundamentals of our space. To break the ice, I jokingly called esports a Ponzi scheme. Despite getting upset about it, the industry then did everything possible to make my somewhat satirical comparison valid.

Cecilia D’Anastacio did an amazing job amplifying a portion of my talk — the part about how we’re all in this “esports bubble”. But I didn’t believe esports was in a bubble; unless it wanted to be.

A lot of things have been forgotten from my talk because of the headline-grabbing things that Cecilia amplified and expanded upon. The bulk of my talk was devoted to explaining how the various groups of people in esports make money. My goal in relaying this was to show that there is value in esports, but the numbers that were being thrown around were ambitious at best.

I recently had a conversation with a colleague and friend who runs an analytics company that is able to spot product and brand mentions by content creators on Twitch and YouTube. The company was able to programmatically calculate the number of impressions / views, and sentiment, from any given mention by any creator across both platforms and then aggregate them.

This is a direct measurement of ROI for any sponsorship, and one few companies are able to replicate. This type of technology is incredibly valuable. And with few exceptions, people aren’t interested. Why?

Not all endorsements are created equal. With brands offering creators a ton of money, it’s not surprising that sometimes creators end up endorsing products and services that they aren’t totally fired up about. However, agencies still promise brands that the streamer loves their product(s), and that they are effectively promoting them. Of course, we know that there are imperfect fits, and the dream of a streamer passionately espousing the virtues of a product doesn’t happen every time.

Some people in the space would rather keep the brands they work with from knowing how creators are talking about their brands and products, since it can only help to dampen the marketer’s dream of having young and popular streamers popping off about their product.

Therefore, an analytics tool that automatically collects this info is not only not worth having, it’s a threat to their bottom line.

Please re-read that sentence and think about it.

Having the actual numbers and seeing the actual endorsement would hurt their bottom line. The people buying creator endorsements and sponsorships are willing to put more money in, as long as they were told an easy-to-believe narrative. Who would blame someone for believing that their money was justifiably spent, especially when they’re being told so repeatedly? The people pushing these partnerships and opportunities are better off just putting potential-reach type numbers on a deck and showing a few clips to get renewals; and the ones spending the money are eager to hear the good news.

What’s great is despite the intentional obfuscation of data, people are becoming increasingly aware of these tactics. The largest outliers become evidence for the more nuanced ones, and eventually sales is supposed to keep pace with marketing. When it inevitably doesn’t, there has to be someone to take responsibility.

So what’s next?

Either the industry will start being realistic and honest with itself (and outsiders) or we’ll continue to see sponsors pull out of franchised leagues, investors will realize they’re never seeing a return on their 8-figure investments, and we’ll enter another post-CGS era for our industry.?

After all, an ecosystem can’t survive on the model of “find a bigger sucker than you” indefinitely.

The Creator?Economy

There are a lot of subtleties here that I’ll get into, but let’s start with this: Creators are getting screwed.

A while back I put out a somewhat cryptic tweet that explained that if you weren’t sure that your agency was good, then it was bad. There are a number of very good agencies out there, but they are far from the majority. If you took a shot in the dark, you’d end up with someone that’s going to cost you deals more than bring them in.

There are a number of ways that agency habits are poor for clients. One of the most important things that end up costing a creator money in the long term is lack of transparency. The aspect of this I saw most at my time at Corsair was that very few agencies apply a statistical and ROI model to partnerships.

I want to specifically shout out Loaded and Kelby May in particular, as his transparency when it comes to deals should be the industry standard. For every single partnership or opportunity, he will base pricing on the opportunity and the specific deliverables asked with a calculated endorser CPM. But this is the exception, not the rule.

For most agencies there is a lot of “gut feeling” type negotiation, and a lot of haggling over insignificant details to try to leverage their “opposition” (I put opposition in quotes here because I never think about potential partners as opposition, but it’s clear from many creator agency approaches, they do think in binary terms).

For any given offer, many agencies will automatically ask for 20–30% more than whatever number you give them, regardless of context or the number itself. They will use contract clauses and protection disagreements as leverage for getting more money out of a situation, even if the clauses have nothing to do with compensation or deliverables for their talent. These types of legal back and forth just provide another avenue to squeeze.

This type of negotiation and deal making is archaic and pointless. This tactic may end up netting a few percentages on an individual contract the first time around, but in the long term this will wear out goodwill quickly. In many cases, it won’t even work for that one contract. I’ve seen so many deals fall apart, or become severely delayed, because of this style of relationship management. Many of these agencies are costing their clients five or six figures every year; whereas if they had engaged in good faith everyone would be happy and their clients would be making bank.

It should go without saying, but I also want to include the typical skimming off the top, bad career advice, non-communication, general negligence, and lack of expertise. If I went into all of this, I’d put you to sleep.

But moving away from the agency side of things, there is also a general lack of information and resources for creators. This exists in everything, including monetization strategy, brand strategy, long-term planning, financial planning, or career transitions. There are numerous examples of creators diversifying their revenue streams, creating passive income, or otherwise setting up ventures while they are “on top” or riding a wave of success that will help them if things start a downturn.

Remember when Ninja could turn on his stream and get 150K viewers? Financial and business planning should give anyone who has a modicum of live streaming success for even a short time the ability to sustain down the line if there’s a reversal of fortune.

But many creators either don’t know the first step, or don’t know who to trust with something as vital as their livelihood. There are basic mistakes that people fall into that have been solved and would be easy to learn — if only there was a means to do so or trustworthy people to help.

I want to be one of those people.

Products Worth Paying?For

A long time ago there was a little company called GOMTV. GOM ran StarCraft 2 tournaments in the early days of internet live streaming and were the de facto top competition for SC2 until much later when WCS led to Blizzcon. But for a while, if you wanted to watch top level SC2, you had to tune into GOMTV. However, there was one catch — GOM was paywalled.

The most interesting thing about this point in history is that GOMTV was paywalled — but no one seemed to care. It was a very simple transaction where almost universally, StarCraft fans agreed that buying a Season of GOM for a few bucks was absolutely worth your money. This leads to what I believe is one of the biggest obstacles to monetizing this industry. With few exceptions, there are not many supplementary products in the market today that the majority of enthusiast gaming and/or esports fans agree is worth paying for.

My prime example of a service most people think is worth paying for is DOTA Plus. For $4 a month you get access to a slightly more robust in-client experience playing DOTA. For an enthusiast player who spends most of their game time playing, it’s kind of a no-brainer.

There are a few other examples of low cost enhancements, mostly an assortment of freemium apps designed to augment user experience for competitive games, but compared to the opportunity in the space, I feel this has been under-explored; especially among esports orgs. Most esports team revenue comes from sponsorships, and if you take away merchandise on top of it, there’s almost no other sources bringing money in. There is a huge product opportunity not only for esports teams, but also just companies in the space in general.

If ESL decided to charge $5 to watch all their CSGO tournaments for an entire year, that seems like a very easy decision as a viewer and fan, doesn’t it? Especially if it comes with the demos. And surely I can’t be the only person that thinks KovaaKs was worth buying, right? You get the idea.

There’s so much room for exploration in this space and I don’t think our industry will be safe until we’re flooded with a myriad of these products — but they have to actually be good.

Native Integration of Competition

I stumbled upon esports almost by accident. I was a competitive DOTA player that only found out about competitive games through TDA in-houses. If you know what those are, then you’re an OG and old AF. If you don’t, it’s not worth going into, but think of it like a matchmaking queue run by an IRC bot.

The point being that even as far back as 20 years ago, the community was always the first one to implement competitive tools to support the community — with one notable exception.

In Warcraft 3, there was a feature Blizzard implemented that ran an automated Swiss-into-Bracket tournament every day featuring various game modes (1v1, 2v2, 3v3 Random only, Night Elf mirror 2v2, etc.). It was through finishing highly in one of these tournaments I met a leader of an online clan and was recruited to join them.?

The clan was involved in several high level team leagues that I would later play in. That was when I realized there was this huge industry that supported organized tournament play detached from the core game experience. Of course, this led me to discovering the greater esports ecosystem, including the scenes in other games.

If not for automated tournaments, I would have never known about the esports world. I suspect there are many more people like me.

For a long time, I wondered why more developers didn’t implement these kinds of tools. It became very obvious to me a few years ago. The issue is that the minimum viable product (MVP) for any game will not include such competitive tools. For most MVPs, the developers just want the game to work and be fun. Developing these kinds of competitive tools comes much later as a luxury for games that are already profitable. If you don’t believe me, think about how few games not developed by Valve have a demo or replay function at launch. Even Valorant, the hottest new games-as-a-service title still doesn’t have a replay or demo system two years in.

So in that regard, I don’t blame developers for not having competitive tools at launch. However, where I think there are still mistakes is that games are often developed without consideration for the competitive scene that may eventually blossom. This isn’t to say that games should be developed for esports; as we’ve seen with some game titles, that can be a recipe for disaster. What I would like to see is that the architecture and the development road map includes planning for these features to be implemented. As we saw in the case of StarCraft 2 with resuming from replay, and League of Legends with no replay or competitive functions at all (Remember 12 hours of Silver Scrapes?), the back end of these games can make the implementation of features like these a train wreck.

What Riot Games has done with Clash in League of Legends and Gauntlet & Seasonal Tournaments in Legends of Runeterra is the gold standard at this point, and I would like to see these types of features developed both more robustly and more commonly. It gives a competitive outlet for players seeking it without having to leave the main client.

If we want the esports landscape to grow to the crazy amounts that we pretend it is, we need to actually get more players involved. It all starts with the game itself.

—?

So that’s what I want to work on. Think anything looks interesting? Reach out, I’d love to talk. Be well, everyone.