This piece from UUU9 looks at profit and conflict of interest in Dota, framed by a look into the history of esports in China.

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Professional players, then and now

The earliest professional players made their livings in very simple ways. The club pays for a simple place to live, some food, and then maybe 1000-2000 RMB in salary. If prize money was won then there’d be a small split of that as well. This period, relative to now, is fairly ancient, and usually refers to the ten year period between 1998 to around 2008.

With pro players just barely scraping by like this, casters and commentators were even worse off back then. People did not place as much importance in them either, and apart from a few larger events that might pay a bit for travel expenses, many other events would simply go by without much in terms of proper commentary. Overall, in these ten years, people involved in this industry were by large representatives of ‘the poor’.

The first wave of salary increases: This all continued on until a ‘new’ game appeared, that game being Dota. The earliest Dota teams followed the same paths, a club sponsoring living and food expenses, then a minimal salary, with prize money split between players and the club itself. Afterwards, because of severe inflation domestically in China, the salaries grew accordingly, allowing typical clubs to settle around 3000-4000 RMB in salaries. Smaller, second and third-tier clubs remained around 1000-2000 RMB.

The second wave of salary increases: 2011 saw a large occurrance which brought further change — the iG ‘poaching’ incident, in which iG bought an entire team. Their offer of 10,000 RMB per month, compared to the old salaries, was considered astronomical. This not only hit LGD hard, it also brought lasting impact to all of the other clubs. After all the dust settled, practically each and every club went about increasing their salary offerings.

The third wave of salary increases: Just as everyone felt that increases had been sufficient and all should be satisfied, The International appeared on the scene. When Dota 2 first was announced, most clubs had made no indication of wanting to switch over; the teams simply crammed a bit of pre-tournament practice in immediately before TI and went in. The result was EHOME taking home a cool 250,000 USD in prize money for their second place finish, and everyone witnessed NaVi scooping a full million-dollar prize. Beyond astronomical figures. Upon seeing this, Chinese clubs, almost all at the same time, began to seriously consider the switch. But the Chinese servers still weren’t up at that time, and everyone continued participating in Dota 1 events, while getting used to Dota 2 in training. In between TI1 and TI2, salaries generally saw another increase, and thus most first-tier teams provide salaries of around 10,000 RMB per month.

Salary increases have largely come to rest at this stage currently. Apart from a rare few big-money transfers, salaries have been fairly stable at this level, but of course, the trend continues upward.

Coming into 2012, upon seeing some retired players making decent money streaming and making VODs, some clubs also went into creating their own official channels, the idea being to have their players stream pub games within. For example, YYF was often seen streaming pubs, but with slipping results in his team’s professional play, the pressure meant he had to put that on hold. Still, we sometimes see pros streaming pub games on YY. As for the income, this remains unknown.

Apart from male professional players, there are actually a few female players. Even though the esports industry is generally a sausagefest, there are still the occasional girls that appear. In the past, there was SsKaoru, MISS, who actually competed at relatively high levels. Nowadays, there are teams such as the ‘LGD Girls Team’, though their main purpose seems to be for promotional purposes. So in this case, instead of a competitive team, they’re more like a marketing team. What their salaries are, I don’t know, though these ‘teams’ appeared around 2010 at first, so the level of pay can’t be too low.

Commentators, then and now

Previously we talked about how early tournaments and events in China did not place much importance on commentators and cassters. Especially for smaller events, at most it would be just to find someone who understands the game and can talk, and off they went. That is, if they even had someone. In that day and age, when even professional players are looking at just a couple hundred to maybe a thousand RMB in average money, commentators would of course not see much for themselves either. That was, until one person emerged: Haitao.

It was near the end of 2009, Haitao had just quit from PLU (a Chinese gaming site and media company), and was at the time unemployed. With nothing else to do, he began doing Dota commentary. Because he had experience as a host for both Gamefy and PLU, he had a good voice, interesting commentary, and happened to just get in when Dota was most popular, so he almost instantly gained lots of fans.

But even with this following, Haitao, still lacked any sort of direct benefit to himself. All the way until a website called “17gaming” approached him, asking to add a short clip at the beginning of his VODs, did he finally begin to make some money. Afterwards, he managed to put in additional advertising for a Taobao/Tmall online shop, and thus began a stream of advertising for various companies. Perhaps inspired by some of this, he himself opened his own Taobao shop, selling mainly computer peripherals, and custom designed clothing.

Afterwards, gaming commentators entered the age of online shops. There are two types of involvement with Taobao — the first being essentially a spokesperson for a shop, wherein a shop is named after a personality and is thus ‘their shop’, but its actual everyday operation is managed by others. In this, a percentage of sales goes to the personality, all he needs to do is advertise it in his VODs and whatnot. The second type is where the personality is the boss as well, and handles all operations in addition to publicizing the shop.

The first wave of shops mostly sold clothing and computer peripherals. Clothing was mainly t-shirts, because t-shirts are low-cost and easy, with screen printing quite simple, profits were potentially quite high. As for peripherals, because pro players would be seen using them, there would be many fans who see and only desire to purchase them for their expensive novelty, and thus sales on these were quite good as well. Eventually, though, peripherals no longer sold as well. Originally the main products were from Razer, Steelseries, famous foreign companies, and the profit margins on these were very little, while costs were high. Even though we all love having high end gear and thus seeming high end ourselves, the costs of these were still too high for the masses, and thus sales eventually died down. At the same time, Chinese-produced products began to appear, with much lower prices, and in some cases boasted flashier, better feature sets than things like Razer’s products.

Gradually, almost all commentators and casters had their own shops. Competition for customers was fierce, and the products on sale were getting harder to sell. Peripherals last at least a few years usually, and t-shirts can only be sold in the summer. This had everyone wondering how else to make money.

Then, 2009 arrived on the scene. 2009 was a retired player from LGD, and after retiring he also entered the world of commentary. Riding on his credentials as a former pro player, he very quickly made a name for himself in the crowded world of Dota commentary. In doing so, he also started his own online shop. But he went with the type two model described above: he decided to handle everything himself. Yet he also met the same problem, sales were slow. Fortunately for him, he was innovative at the time, and opened a ‘snack shop’, something that hadn’t been done much before, and more importantly, food sells faster than clothing and peripherals. Additionally, his model encouraged mass purchases from customers looking to save on shipping fees, and so profits grew accordingly. Afterwards, imitators cropped up, and today we have the three main types of shops in clothing, peripherals, and food. And it is exactly this system of shops that has allowed commentators and casters to become financially established in esports, in some cases even surpassing players in terms of income. This could be called an esports miracle (and it’s a good one).

The emergence of browser and online games

In addition to their shop incomes, lots of people wanted to make even more money. In a time when shops were a dime a dozen, the search was on for less competitive ways to make money, and from here was born the browser-based web game model.

These browser-based games gained popularity by having low requirements, no installation, and ease of access. Due to the simple, instant nature of launching these games, they were popular amongst office workers looking to sneak some time in between at work, and thus the main audience was one that had little time, but lots of money. During this time, internet speeds across China remained in the 2-4mbps range, quite slow, and thus the quality of these games all remained quite low to accommodate for that fact. Thus, the games were generally quite bad.

A lower end game might only cost in the 5 digits to start up and launch, and could make that money back within two to three months, with the rest being pure profit. Low cost, high return, high profit. This was (and is) why there are so many browser-based web games everywhere. Someone had the idea to recruit famous personalities to come play their game, to play the game with other users, and thus market the game and bring even more players about. With hundreds of thousands of followings, esports commentators were natural targets for this. The model was simple: simply create a new server for the game, name the server after the personality, tell the personality that they get X percentage of the revenue from all users on this server, and leave the rest up to the personality to handle. Of course, if it were only to advertise the game, the results would’ve been quite average. So in addition, the personalities would schedule times to play the game with their fans. Once there were more people, there would be more spenders, buying things to advance, or open more chests, etc. Money, and it would be transferred each month to personal accounts.

In honesty if you wanted to see how many of these personalities actually liked or enjoyed these types of games, there would hardly be any. Being a commentator, you see lots of games, and naturally gain an understanding of what makes a game good. These were not good games, but they still got involved with them, for the money. If you look at it this way, it’s perhaps a little bit questionable.

LoL and its advertising

In 2011, Tencent took on a game called “League of Legends” and officially began running its operations in China. In the normal vein of things, a game’s launch naturally begins through traditional advertising.

Dota commentators advertising for other games in their videos was no new thing by this time. The one thing Tencent does not lack is money, and so many worked with Tencent at this time. EHOME at the time was invited to participate in an “All Star Match”, and the slogan was “By the original creators of Dota”.

Here, we can’t go without mentioning the fact that some people may have been short-sighted. Many Dota commnetators and casters went with it for the money, and didn’t think what might happen if this direct competitor to Dota got a spark and grew more popular. On this, Haitao has always been very clear-headed. The reason they are recruiting you is not because you’re good at LoL, or you’re a good LoL caster, but because you’re a good Dota caster, and your audience is seen as a potential audience for LoL. Once you’ve advertised for LoL, there will be a portion of your audience that goes to play this game. In the end, because of this, a portion of them move away from Dota and go to LoL, and thus your own audience decreases by that amount. Once that happens, you are only devaluing your own work as a Dota commentator.

Even though we can’t say that LoL only became popular because of this, but it should still be pointed out that the popularity of Tencent’s game has to give some credit to Dota commentators…

Nowadays, Dota 2 has been officially available and free to play for quite some time, yet some casters and streamers continue to stay with Dota 1, refusing to make the switch. Because Dota 1 currently still has a sizeable player base, if more Dota 1 streamers, casters leave to Dota 2, then that means that those who remain have a larger share of this shrinking pie. But it truly needs to be said, between Dota 2 and Dota 1, it is certain that Dota 2 will last longer. Therefore, only if Dota 2 grows and grows, can you make it in the long term. In the beginning you all advertised LoL, yet now Dota 2 is here and there’s nothing. Only if Dota 2 becomes the hot thing can you all continue on successfully.

The viewers

In the past, viewers served a simple purpose — to support and increase the confidence of players and commentators. After all, putting yourself out there on the internet, you would hope that your viewers support you and recognize you.

Early on, commentators and casters were doing the work out of interest, love for the game, and so if others liked or disliked their work, that was only a secondary consideration. After all, if you like it or dislike it, that doesn’t have much to do with me. But after profit interests entered the game, viewers suddenly became the gods. Streamers, casters, players, all put on a smiling face and never talk or respond back negatively so no one gets upset. Flame, berate… in the end, they are aware that the upset viewer might be a customer of theirs, or a fan of someone. So casters and players keep their popularity and their incomes and their sponsorships, while viewers feel within their rights to flame and flame to their hearts content, a win-win for everyone.

Concluding words

We’re approaching 2014, and the esports scene has grown to a very mature level. Interests and revenues are linked in very simple fashion, but create a strong barrier to entry for newcomers. The scene is crowded and the pie is already split. We see some god-tier personalities with massive success, but at the same time we shouldn’t forget those who failed, whose online shops were forced to close down.

Everyone in esports now feels like they’re a part of mainstream society, that they’re accepted. But if you pay attention to other forums and channels of communication you’ll see, many many people still view it as a low-level industry, one that is suited only for rejects from other parts of society. This not only is due to the long-standing bias against esports, but also due to the industry itself being too immature, too unstable, and too focused on money matters.

Source: http://dota2.uuu9.com/yysnl/

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