![]() It's rumoured that Valve's 2015 revenues reached $3.5 billion in 2015, and Riot Games' over $1.6 billion. Activision reported $1.57 billion in revenue for Q2 of 2016 and EA $1.271 billion. It's no secret that being a top publisher is a lucrative business. There's a strong argument to be made to publishers that working with third-party developers will lead to a stronger overall bottom line, foster innovation and provide defensibility. buy.īecause of these walled gardens, the investible opportunities within eSports often end up being features not products, which set them and their investors up for more of an acquihire than a Twitch-esque exit. On the platform side, Twitch is miles ahead of its competitors in terms of creating an external ecosystem thanks to its two year head-start and passionate developer community, but it maintains an ever more precarious balance between build vs. Valve offers an open API but, as events this year have demonstrated, it can shut off access and change policy at any time. Whereas in traditional sports there are multiple providers of a firehose of sports data, game publishers offer barebones APIs that allow access to little more than character information and select match data. Most tier-one publishers also handicap the data streams that the public can leverage. This model has been so successful that, in 2016, the prize pool reached $19.17 million. Three months before The International, the annual world championship for Dota 2, Valve sells interactive in-game items that directly contribute to the tournament prize pool. item drops, exclusive/first-release capabilities, bundled original content - and offer unique monetisation opportunities. Leagues that are operated or endorsed by publishers can do unique things - e.g. "No one 'owns' racing or basketball, but someone does own Overwatch, and if you want to play you essentially have to go through that company" Furthermore, the core experience is fully controlled by that publisher. If you wanted to create your own eSports league, your ability to market or represent it would be entirely dependent on the legal team of the game's publisher. No one 'owns' racing or basketball, but someone does own Overwatch, and if you want to play you essentially have to go through that company. If you choose to race without NASCAR or play basketball without the NBA, there's nothing - and no official body - that can prevent you from replicating the experience. From there, we have typical leagues like the NBA or Premiership, which have a set number of recurring teams and players, and are extensively managed by a league front office that's owned by each team.ĮSports are quite different. ![]() The most decentralised sports, like the PGA Tour or NASCAR, consist of largely independently organised competitions, which are sanctioned and governed by an administrative body and are open to any qualifying athlete. ![]() The traditional sports ecosystem is dominated by three models of organisation. Startups and third parties are finding it hard to identify their segment of the space and monetise, due to a complex relationship with the companies who create the actual games - the publishers. Every week there's a new report detailing how big the industry can really be, but there's also an elephant in the room.
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