December 12, 2017
2017: The Year of Franchising
Summary:
2017 was an amazingly exciting year for esports. On the competitive front we saw SKT lose their first ever League World Championships to Samsung Galaxy; SK Gaming continue their dominance over close rivals such as G2, Faze, and Astralis in Counter Srike; and Kuroky — Team Liquid Dota’s captain and a 7-time International competitor — win his first ever TI.
From the business perspective, however, few things have changed the landscape of esports as dramatically as franchising. Two of the biggest games in the world – Riot’s League of Legends and Blizzard’s Overwatch – have selected permanent league partners, who will field teams in each respective sport for years to come. Let’s take a look at the process it took to get us here, and what this means for esports moving forward.
Our Take:
League of Legends
Back in September 2016 Riot Games announced that they would be creating a permanent partnerships system, wherein league revenues are distributed amongst players, teams, and the league. The goal of permanent partners was to create a sustainable ecosystem where each partner is contributing and reaping the benefits of an overall successful league, much like in traditional sports. Riot established minimum player salaries, and helped the players form a union.
Over the past year Riot completed a comprehensive RFP process which saw applications from endemic esports organizations (existing members of the NALCS and not) and a slew of traditional sports organizations. Riot’s franchise fees — $10 million for existing members and $13 for new league entrants — necessitated many endemic orgs to turn to outside financing to help foot the bill. These outside financiers also often ended up bolstering the applications of those endemic teams, increasing the likelihood of their league acceptance.
The application process was two phases: each team had to create a written pitch deck, which was followed by an in-person meeting with final applicants. Ultimately, Riot selected six of the existing 10 NALCS teams, and four new additions. The removed teams were paid a fee based on how long they’ve been in the league, and rosters have recently finalized giving fans a glimpse at what a franchised NALCS will look like in 2018.
Overwatch
The Overwatch League was announced at Blizzcon 2016 to much fanfare. Although the game had not yet developed a large competitive viewership, Blizzard assured the community that it was all in on Overwatch esports.
Blizzard’s partner selection process was handled a bit differently than Riot’s. Traditional sports owners such as Robert Kraft (New England Patriots) and Stan Kroenke (LA Rams) were confirmed team owners at the $20 million league entry fee. The application was not an open process — Blizzard vetted organizations and wealthy individuals and ultimately signed deals with 12 total teams, each located in a different global city. Minimum player salaries were introduced and revenue sharing protocols were established. The league began pre-season play last week and will launch officially in the beginning of 2018.
What Does It Mean?
The permanent partnerships established by two of the big publishers in gaming signals a shifting tide for esports. Riot’s NALCS is probably the most advanced esports league in the world, and for it to take on permanent partners is a meaningful change that has been a hot topic of discussion for years. It’s nice to see Riot finally take this next step and to begin working with these organizations, and their players, more meaningfully and with the long-term in mind.
For Overwatch, it’s never been a question of if, but how. Ultimately, Blizzard went out to market with a big ask for an unproven product. Unlike NALCS, Overwatch does not have a large existing audience, or a proven esports product. The OWL team has so far impressed, but it’s unclear whether the game can compete in the ever-more saturated esports marketplace. With a buy-in double the cost of NALCS, it’s hard to pinpoint what short term success looks like, but with a list of owners as impressive as OWL has, anything less than significant long-term returns will be seen as failure.
It’s also interesting to note what these two franchised leagues mean for other esports. New games such as PUBG have critical decisions to make upon their esports launch. Do they try to build an esports product and community before franchising or just launch straight into permanent partnerships? Each game, competitive community, and esport will have a different path but what these two leagues have done has been nothing short of revolutionary and will change the esports landscape for years to come.
In-game esports comes to League of Legends
Summary:
Yesterday, Riot Games announced the release of Clash, a new team-based competitive mode releasing worldwide in League of Legends in 2018. A long-awaited feature in the game, Riot’s lead Producer Joe Tung described Clash as “your own personal esports experience” in-game. Players will have the option to purchase tickets in-game to compete in a series of single-elimination brackets alongside four of their friends as a pre-made team of five, with winners coming away with prizes depending on their team’s performance. The feature will be active “a couple of times each month,” according to Riot.
Our Take:
In-game tournaments are a long-requested feature in League of Legends, and as many players both amateur and professional have noted, playing as a pre-made team in League of Legends is a drastically different experience from playing with 4 strangers due to strategies involving intense coordination being unlocked, more focus on “banning” players’ comfort champions in -game, studying teams for weaknesses, etc. It’s the difference between a pick-up game and a scheduled match-up between two powerhouse traditional sports teams with each reviewing the other’s tendencies in the film room throughout the week leading up to gameday.
On the esports side, highlighting a “path to pro” that talented amateur players can follow to eventually make their way into a professional league if they are skilled enough to play at the highest level has long been a necessity across the industry and Riot is doing its part to showcase organized play more within the the game’s broader player base. Though a direct tie-in between Clash and professional esports leagues hasn’t been announced, Clash reflects not only a renewed commitment by Riot to organized competitive play within its own game but also an opportunity to expose more casual players to the experience of organized 5v5 League competition, complete with the LCS drafting system and scouting reports on opponents beforehand.
2017 was a remarkable year for League of Legends esports that saw dozens of traditional sports and long-storied esports teams compete to gain one of the ten coveted LCS spots in Riot’s flagship North American esports league. It seems fitting that the in-game competitive experience for amateurs and aspiring pros is also seeing a massive upgrade ahead of the 2018 season. The author of this piece will certainly be spending time this winter season with friends practicing and preparing strategies for when these features go live.
Happy Holidays, all!