Dec 10 2013 - 1:00 pm

Why Coca-Cola is betting big on eSports

Just a few years ago, your average professional player of the game Quake, the one-time king of first-person shooters, may have spent the night before a major tournament in his car
Jeb Boone
Dot Esports

Just a few years ago, your average professional player of the game Quake, the one-time king of first-person shooters, may have spent the night before a major tournament in his car. The next morning, he'd haul a grey computer monitor into a dingy hotel basement to compete against others just like him for a few hundred dollars in prize money and a chance to compete at the highest level.

Now, professional gaming, or eSports, is selling out major sports arenas and awarding millions of dollars in prize money. But in spite of the industry's ability to transcend geography and nationality, it remains volatile.

High-profile investors flee from the scene during downturns, only to return during peaks. In the valleys between, a small but dedicated few have remained, driving the industry to its next, seemingly inevitable upswing in popularity.

The manic nature of the industry has made it incredibly difficult to attract non-endemic sponsorship. ESports teams, professional leagues, and individual players fight tooth and nail to squeeze profit from their passion but rarely claw their way into the black. Even League of Legends, the world’s most-played PC game, struggles to turn a profit in the eSports industry.

"We lose a lot of money on eSports." Mark Merrill, the president and cofounder of Riot Games, told the press in October of 2012.

"It's not something, currently, that we do to drive return or profitability or whatnot. It's bringing value to our players. Maybe, down the road, that will change. If we bring value to our players, they'll reward us with engagement.”

As recently as August of this year, the company's head of eSports, Dustin Beck, once again acknowledged that Riot is “not making money” in eSports.

Now, League of Legends has secured what is perhaps the most sought after prize in the industry—a long-term sponsorship from Coca-Cola. Coke Zero will sponsor a competitive league for up-and-coming players looking to make a splash in professional circles, called the LCS-lite. The amount of funding provided by Coca-Cola has not been disclosed.

Coke has been backing eSports events since as early as 2001, when it sponsored a competition called the Coca-Cola Ongamenet StarLeague in South Korea. But the company is now clearly betting that the eSports industry is on its way to an even larger explosion in popularity and visibility. 

“ESports is at a point now where the company feels like it’s time to move into the industry," Matt Wolf, Coca-Cola’s global head of gaming, told the Daily Dot. "There are several signs that show that this is real, it’s sustainable, and the growth is astronomical.

“We’re looking at it as a sustainable platform. We’re looking at partnership with Riot as an amazing first step into that world. It’s not far afoot to say that eSports, as it stands, is the biggest sport that people have never heard of."

Wolf also noted that eSports's international nature makes it an attractive investment for companies marketing a global brand. Unlike some traditional sports like American football or, to a lesser extent, baseball, eSports transcends national identity and reaches a multinational demographic. Every eSport, from League of Legends to StarCraft 2, sees competitors from all over Europe, North America, and Asia.

“[Coke] is a global brand, obviously that’s important to them," said Marcus “djWheat” Graham, something of an eSports's elder statesmen and an expert on the industry. "But StarCraft has been more global than League of Legends and has been for 15 years."

Graham has been involved as a player, commentator, and broadcaster since the humble early years of eSports, beginning in the late ‘90s as a top-ranked Quake player and caster. And he doesn't necessarily see traditional sponsorship as the financial saviours of eSports.

"Let’s not focus on TV and traditional advertising, let’s get behind [online streaming platforms like] Twitch," said Graham, who also works for Twitch as their eSports manager. "There is no reason why eSports profitability has to be tied to traditional sponsorships and advertising."

Riot’s League of Legends Championship Series is organized at the corporate level and funded by company earnings. That's quite distinct from the populist, grassroots origins of professional gaming. This more insular model for the eSports industry has left some skeptical of Riot's success.

“ESports isn’t profitable for Riot. That is absolutely the case,” Graham said. “Riot got into this knowing they were going to lose money."

"They could write off every dollar they spend on eSports as marketing. I’d call them liars if they said eSports wasn’t moving their needle a little bit, but how can you gauge that? How can you get statistics?” It's extremely possible that in three years, Riot will evaluate their ‘investment’ and say, 'Hey, we've been hemorrhaging money on eSports and it's time to cut the cord.”

Coke, not surprisingly, seems confident they're not about to lose money. Riot's ability to reach an elusive demographic will continue to attract investment, Wolf said.

 “When you only consider Riot’s latest published numbers in a vacuum, they’re well north of 30 million active players spending over 2.5 billion hours a month on this game."

What makes the game especially attractive to Coke, Wolf added, is the its dual nature. There are the people playing League of Legends for fun, and then there are people playing for money and attracting millions of viewers to their matches.

"We get to engage with players in different forms and in a lot of different, meaningful ways,” he said.

Overlooking the possible pitfalls, Graham still acknowledges that what’s good for Riot is good for eSports as a whole

“I’d like to believe that Riot’s initiatives will trickle down. Where will Pepsi go? Maybe to a popular team? Maybe to other games? I do feel like the partnership between Riot and Coke will serve as a catalyst for other major companies to take a closer look at eSports."

Other major brands have, in fact, tried theirs hands at eSports. Pepsi sponsored the Korean Pro Gaming Association’s StarCraft: Brood War League in 2002 and also affixed its brand to the Global StarCraft 2 League in 2011.

But in spite of Riot’s ability to attract non-endemic sponsors, Graham argues that independent eSports organizations—and not corporate game developers—are ultimately better equipped to find financial stability in the industry.

“Riot isn’t holding up eSports on its back,” he said.

“I firmly believe that teams and players are now the most profitable eSports organizations. They have lower overhead and a lot of flexibility to please sponsors. Some of these organizations are actually making some money. Not a ton, but it’s something.”

Joining the ranks of a select few eSports organizations, Riot has built a professional gaming platform that didn’t need profitability to convince a sponsor to get on board. Given the widespread popularity and success of League of Legends, why does non-endemic sponsorship remain so elusive in the rest of the industry?

Coke was quick to point to Riot’s skill in event production and global reach as a major selling point.

“I couldn’t even do their productions justice in explaining them to you,” Wolf said. “The way that it’s proliferating is going beyond what most people think of it today. It’s growing. Since Coke is a global brand, we see value in the global nature of eSports.”

In terms of profitability, Riot eSports still only serves as a marketing investment that is losing money in the short term—even with support from one of the most recognizable corporate brands in the world. Other organizations are still fighting tooth and nail to stay out of the red. Take, for instance, Major League Gaming (MLG), one of the West’s largest independent eSports leagues. MLG is on the front lines of the industry when it comes to experimenting with different models and new methods to raise the profile of eSports.

As a privately held corporation, MLG keeps revenue figures and statistics private. But it's occasionally candid when speaking generally about their successes and failures.

"There's not a tremendous amount of profit being made. I'm saying that because it's reality,” MLG’s CEO Sundance DiGiovanni said in an interview with ESFI last year. “We've been doing this for quite a while and we do about $20 million in revenue. But we're spending, investing a lot as well.”

Fifteen years of volatility doesn’t create longevity in any industry. Still, eSports has continually refused to fade away, returning stronger and more visible—even after experiencing a relatively significant downturn.

Perhaps the next industry surge will finally start lining the pockets of the industry's corporate masters, while its stars will continue work for a relatively decent living playing games.

And conveniently enough, getting paid to play video games is still probably the best job in the world.

Illustration by Max Fleishman

Jan 23 2017 - 8:37 pm

Armada takes out Genesis 4 Melee crown

His win at Genesis 4 helps solidify his claim as the best Melee player of all time.
Xing Li
Dot Esports

We've seen this story before. Adam "Armada" Lindgren vs. Joseph "Mang0" Marquez for the Genesis Super Smash Bros. Melee title.

Once again, Armada emerged victorious.

Both players are idolized in the Smash community for their stunning success over the years. But if any venue has been the site of their personal rivalry, it's Genesis, where the two have met in the finals again and again. There were other talented players in the field, but this is the matchup most fans wanted to see at Genesis 4.

Armada had the easier path to the final by virtue of his 3-1 victory over Mang0, which sent his rival to the loser's bracket. Armada had a relatively easy time, absolutely controlling stages and strangling life from his opponents. His run seemed relatively routine until he ran into Jason "Mew2King" Zimmerman.

Mew2King was on-point with grabs and air attacks on his signature Marth. Many times, Armada was stalling on Peach, trying to get into winning situations. Mew2King had a lead and momentum.

But Peach is hard to finish off and Armada's stalling got him to a deciding fifth game. Even then, Mew2King had chances, but missed key inputs. Small mistakes compound against a talent like Armada, and he punished Mew2King relentlessly.

In the loser's bracket, Mang0 survived by grit and guile, coming back from numerous deficits. First, it was against William "Leffen" Hjelte, where Mang0 mounted an insane comeback to tie the set at two games apiece. But Leffen came out strong in the deciding game and quickly took a two-stock (life) lead. Down to his last stock, Mang0 found his way back to the middle of the stage and went ham, somehow ending Leffen's run. The comeback ignited the crowd, with fans hugging and high-fiving at what they just witnessed.

Things wouldn't get easier. Juan "Hungrybox" Manuel Debiedma, valiantly playing with a broken finger, used Jigglypuff's burst to take big stock leads. But Mang0 continued to control the center of the stage to take Hungrybox down. He then beat Mew2King—reeling from his loss to Armada—to set up the finals rematch.

Fans wanted to see a show, but it was a different one than they might have expected. Though these two have gone back and forth in extremely close sets over the years, Armada has been on a tear for the last several months. And the final against Mang0 was no different. Instead of a close, tightly-fought match, fans got a coronation.

Armada had an answer for everything Mang0 threw at him. He floated around and seemed to take no damage. It was perhaps his most convincing win of the day.

Melee has been ruled by the Six Gods (which includes all the aforementioned players) for years now. But Armada is beginning to separate himself from the pack. He stands alone at the top at the beginning of 2017—if he ends the year in the same position, he could cement himself as the greatest Melee player of all time.

Jan 23 2017 - 3:29 pm

Our predictions for the Evo 2017 lineup

These are the ten games we think will make it to Las Vegas... and the four that won't
Steve Jurek
Dot Esports

Ladies and gentlemen, we are about to officially enter Evo season.

Organizers for Evo, the largest fighting game event in the world, will reveal the event's 2017 lineup on Tuesday at 9pm ET. Thousands of fans will be watching intently to see if their favorite game will be played on the fighting game world's biggest stage. There is a bit of uncertainty about this year's lineup, as several new games—including King of Fighters XIV, BlazBlue: Central Fiction, and Injustice 2—all have strong cases to be part of the Evo 2017 lineup, and the nine games that were part of Evo 2016 all have strong arguments to return to the event.

Earlier this month, lead Evo organizer Joey Cuellar asked which seven games fans would like to see at Evo 2017. This led many to believe that only seven games will be featured at this year's event. While that's certainly a possibility, Evo staff have a tendency to try and do things bigger than they did the year before. I feel that this year will be no different, as I believe a record-setting ten games will make the final list.

Here are the 10 games I believe will make the cut for the Evo 2017 lineup, along with a few that won't.

Will make the cut

Street Fighter V

After a launch year that included poor reviews, missed sales targets, and an embarrassing rootkit fiasco, it is safe to say that 2016 was not a great year for Street Fighter V. However, there was one area in which the game was unquestionably successful: tournament turnout. A record-setting 5,100 players took part in last year's Evo tournament, which is more than the number of players who participated in the second- and third-largest tournaments in the event's history combined. Despite its freshman struggles, Street Fighter V's status as an Evo game is as safe as can be.

Super Smash Bros. Melee and Super Smash Bros. for WiiU

The increasing prominence of Smash games at traditional fighting game events has not been without controversy, but it's a trend that isn't going away anytime soon. Last year's two Smash games were the second- and third-largest events in Evo history. Over 2,600 players entered last year's WiiU tournament, while over 2,300 entered the Melee event. With support like that, it's impossible to imagine a 2017 lineup without either game.

Ultimate Marvel vs Capcom 3

To steal a line from a popular fighting game talk show: Marvel lives! The Marvel community did everything they could over the past two years to reignite interest in Ultimate Marvel vs Capcom 3, and Capcom's December announcement of Marvel vs Capcom: Infinite poured gasoline on that spark. There's no doubt that we'll see at least one more Evo with the insanity that is Marvel 3.

Injustice 2

Injustice 2's May 16 release date will surely make Evo organizers a bit nervous. With just two months between the game's release and Evo 2017, the game's entertainment value will hinge largely how well-balanced the game's cast is at launch. A poor initial balance could lead to a repeat of the original Injustice's Evo debut in 2013, an event in which three of the top six finishers played Superman. Still, those fears won't be enough to dissuade Evo organizers from including the game in the 2017 lineup.

Tekken 7: Fated Retribution

It's strange to think that Tekken 7, a game that hasn't seen an official North American release, can be making a third straight Evo appearance. Yet here we are. Bandai Namco, the Tekken series' publisher, has done well to drum up interest in the game with its regional King of the Iron Fist tours. That effort will pay dividends on Tuesday, and they'll pay dividends once players can finally get their hands on the game. Speaking of...

 BONUS PREDICTION: Tekken 7 console release date will be revealed

Tekken publisher Bandai Namco has promised to announce a console release date for its much-anticipated fighter some time this week. The company has been coy about exactly when that announcement will come, but Tuesday's Evo lineup reveal show seems to be the most likely choice. With popular figure Mark "Markman" Julio - who has appeared on the reveal show in each of the past two years - now working with both Evo and Tekken in official capacities, this appears to be a no-brainer.

King of Fighters XIV

The King of Fighters series is always a favorite among international Evo viewers, so it would be incredibly shocking to see the recently-released King of Fighters XIV left out of the 2017 lineup. 

Guilty Gear Xrd -Revelator- and BlazBlue: Central Fiction

Evo has historically had one unwritten rule for "anime" games: they only get one spot in the lineup. That rule was broken in 2015 when both Guilty Gear Xrd and Persona 4 Arena Ultimax were included in the event, but only Xrd returned last year. I feel that this year will see that rule broken again, as the BlazBlue series has a strong new entrant in Central Fiction to join Guilty Gear Xrd's still-strong -Revelator- update.

Killer Instinct

This may be the toughest call on the list. With the amount of developer and community support shown for the game four years after release, Killer Instinct is the type of game you want to see succeed. Microsoft is now backing the competitive scene in a big way as evidenced by the upcoming $30,000 Killer Instinct World Cup in March. I feel that momentum should be enough to see the game make the cut again despite being the game that had the fewest entrants at Evo 2016.

Will not make the cut

Pokken Tournament

It's tough to imagine a game going from over 1,100 entrants at Evo 2016 to not even in the 2017 lineup, but that's the fate that I believe Pokken Tournament will face on Tuesday. The game's community has shown up to events in force, but so have many other communities. Pokken felt like an odd choice last year, but with so many other games in contention,this year it feels like the odd one out. 

Mortal Kombat XL

There is precedence for Evo including two different NetherRealm Studio games at one Evo - both Mortal Kombat 9 and the original Injustice were a part of Evo 2013. But with so much crossover between players from the two series, along with the abundance of potential choices at Evo's disposal, I think that we've seen the last of Mortal Kombat XL at Evo.

Ultra Street Fighter II and ARMS

The Nintendo Switch will likely have at least two fighting games available by the time Evo rolls around, but don't expect to hear the name of either game on Tuesday. Many tournament players love Super Street Fighter II Turbo, but its re-release as an "HD Remix" was not particularly well-received by most of that group. It's doubtful they would be more receptive to Ultra Street Fighter II, a game that appears to be an HD remix of HD Remix. And as fun as it would be to see players like Justin Wong and Daigo duke it out with motion controls, there are far too many 'legit' fighting games in the running for a spot in the lineup to take a flyer on ARMS.