12 years in, Major League Gaming is finally close to profitability
After 12 years as an eSports industry leader, Major League Gaming is finally closing in on profitability.
MLG.tv, the company’s major new video-streaming service, has ushered in a major increase in advertising revenue, a feat CEO Sundance DiGiovanni has been championing for months.
@KimRom ever since we parted ways with a certain SF based sales partner we've been killing it. Streaming on our own platform also helps.
— Sundance DiGiovanni (@MLGSundance) November 5, 2013
Major League Gaming (MLG), the most popular eSports league in North America, has been at the forefront of the industry’s explosion over the past five years. In 2011 and 2012, MLG set viewer records over and over again, but the company’s bottom line always left observers wanting more.
“There's not a tremendous amount of profit being made,” CEO Sundance DiGiovanni told ESFI last year. “I'm saying that because it's reality.”
The New York City-based company, which is privately held and thus not obligated to be open about its financial details, does about $20 million in annual revenue, and it has millions more in venture capital. But there has always been even more money than that going out the door.
While previous forays into daily programming on Twitch ended in failure and layoffs, now for the first time, MLG’s major events and daily video programming are profitable.
In addition to streaming major tournaments in locations like Anaheim, Calif., on MLG.tv, MLG runs programs like the eSports Report, a SportsCenter-inspired summary of the day in eSports news, produced from MLG’s New York City television-caliber studio.
“So now it's just a question of doing more, scale out, and stop when that starts to slow down,” DiGiovanni said, “because we don't want to get to a point where it's not profitable."
The profits have opened up new opportunities, like new events focusing on StarCraft 2, a game that MLG dropped last year.
We wouldn’t be able to fund the planned activity without the increased ad revenue we see on the MLG.TV platform. That is all.
— Sundance DiGiovanni (@MLGSundance) January 9, 2014
If MLG.tv is a long-term profit-generator for MLG, the question has to be asked: Will other eSports organizations consider moving away from Twitch, the current industry leader in video streaming?
DiGiovanni emphasized that MLG.tv is not a direct competitor to Twitch—it’s not “a mass market streaming platform where anyone can participate”—but will the idea seduce other gaming companies?
It’s not exactly easy to build your own streaming platform. MLG has had more money to work with—and time for that matter—than most other eSports organizations.
Riot’s Dustin Beck, the vice president of eSports, said the League Championship Series is “a significant investment that we’re not making money,” despite being the most popular eSports competition of all time. Could a Riot streaming platform where all the ad revenue went directly into the company’s pockets solve that problem?
Twitch has been the single most important company in eSports over the past few years. If—and this is a big if—Twitch finally faces real competition, the whole industry is in for a real shake up.