This is Part One of a multi-part series about the infrastructure of esports leagues. Part two will focus on the differences between the Overwatch and League Of Legends academies, the role collegiate esports could play in this system, and both leagues’ “Path to Pro” initiatives.
For traditional sports leagues, stability has come over time. The leagues that have survived, like MLB, the NFL, and the NBA, have at some point merged with competitors, forced competitors out, and built up effective systems to feed and weed talent, whether via an official minor league or a collegiate feeder system.
Over the past few years, with traditional sports as a model, esports leagues have developed stable infrastructures more rapidly over relatively shorter time periods.
That’s partially due to what they have learned from traditional sports, but also due to inherent, built-in stability. In traditional sports, no one owns the game itself. The NBA doesn’t own basketball; the NFL doesn’t own football. But Riot owns League of Legends (LoL) and Blizzard owns Overwatch. That means no one else can form a league to compete with Riot’s League Championship Series (LCS) or the Overwatch League (OWL).
It also means that creating a developmental infrastructure, from Little League through high school to college to the minor leagues, can be managed and controlled exclusively by the game developer.
Franchise Leagues – The LCS and OWL
Both LoL and Overwatch have adopted the franchise model used in traditional American sports with massive team buy-ins – $10 million for the former and $20 million for the latter.
“[When developing the LoL Academy] we looked at the NBA G-league, we looked at the Academy systems globally from soccer teams,” said North American LCS commissioner Chris Greeley. “The English Premier League and MLS academy systems were a big influence for us.”
LoL is in its ninth year since release, and Overwatch is only in its second. That would seem to give the institutional nod to LoL. In reality, it’s more complicated. Riot is LoL and LoL is Riot. It is a one game studio focused on its flagship title.
In terms of the quantity of games, Overwatch maker Blizzard is a behemoth. It has been developing games since 1991 and has created multiple esports games, such as StarCraft, World of Warcraft and Hearthstone.
Still, Overwatch is the companies’ most ambitious esports undertaking to date. When they were devising their infrastructure they took inspiration from past Blizzard titles, other esports sources and traditional sports models.
“Blizzard esports has been operating for a very long time and there is a slew of learning we have been able to apply to OWL,” said Dan McHugh the Product Manager of Overwatch Esports. “In the OWL we needed a way to develop new talent. There needed to be a place to develop future stars. [To create that] we drew inspiration from both traditional sports and esports.”
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The Hands-Off Approach – Valve
The franchise model used by Blizzard and Riot is only one of the paths taken by top-tier esports leagues. Valve, one of the largest game developers in the world, takes a more hands-off approach. The company has developed critically-acclaimed games like Half-Life, Left 4 Dead and Portal. It owns the other two games that make up the esports pantheon along with LoL and Overwatch: Counter-Strike: Global Offensive (CSGO) and DOTA 2.
Unlike Riot with its LCS and Blizzard with the Overwatch League, Valve has not franchised CS:GO and DOTA 2, and never will, according to former ESPN reporter and esports consultant, Rod Breslau.
“They want people to be involved, but they will never have a franchise,” Breslau said. “I saw Jack [Etienne, CEO of Cloud 9] talk about possible CS:GO franchising, and it’s not going to happen. The discussion of it happening will never happen.”
A large reason for that is the upkeep it takes. Riot and Blizzard have massive teams in place to maintain their leagues. Valve has instead let third-party tournament organizers like ESL and DreamHack flourish in its absence. If the LCS and OWL are similar to the NBA or the English Premier League, then CS:GO and DOTA operate more like individual sports, such as golf or tennis.
Instead of a formalized league, the focus is on national rankings and major and minor tournaments happening around the world. But unlike golf or tennis, DOTA 2 does have an important distinction: an undisputed final event. The International, which was held for the seventh time in August of 2017, has by far the highest prize pool in esports. Team Liquid was rewarded $10 million for winning last year’s competition out of a total prize pool of $24 million. The reason the payout was so high is because Valve puts money spent on in-game items into the prize pool. It’s a unique and generous system in esports. Both the lack of franchising and that generosity can be traced back to a single source: Steam.
Steam bills itself as “The Ultimate Online Game Platform” and it’s hard to argue. Steam is Valve’s marketplace, social network and game catalog all in one. The revenue generated by Steam means that Valve can afford to forgo revenue from in-game purchases or franchise fees.
“[According to Valve President Gaben Newell] Valve makes the most money per employee. They make so much money off Steam that they can afford to do other things,” Breslau said. “The teams that work for leagues in Riot and Blizzard are massive. Valve doesn’t even have a social team.”
“There’s just different models, there are ecosystems that do well with a hands off developer approach,” NALCS’ Greeley adds. “Esports is a commitment, to do it in the way Riot or Blizzard have done it, is an investment. Either approach can work. DOTA is evidence that a community-grown and independent esport can work. We took a different model and we view League of Legends as a multi-generational sport.”
“Franchising is great but there is something to be said for the Valve model,” quipped Breslau. “Where American sports can get predictable over a season, third party tournaments allow for underdog teams to make runs. It’s the NBA playoffs vs. March Madness.”
Suggested further reading:
Little League Esports – How Super League Gaming Brings Community To Esports