I think that, I am in a unique position to discuss openly the process through which riot undergoes investigations and I don't think that is right. And I think I have an ethical obligation to this industry to make sure that, in the future independent third-party investigations are used that there is a transparency in the ruling precess. Not only Riot but for any other titles that currently exist or may exist in the future, I think that's really important to take a stand now. And say that, this is not an acceptable way to be doing business in an expanding industry where these assets are very valuable and people are professionally invested in.
So how do these organizations make money? The Number ONE driving force behind revenue in traditional whether you have relegation or franchise system, is "broadcasting revenue". It's because these teams own the league that they collectively bargain then all the owners come together and they make a deal with, together, with a broadcasting entity or several entities and that is where the majority of the income stream comes from.
So where effectively all of the money like 95% of the money to eSports teams comes from is it comes from sponsorships.
It is the death sentence to get sent to the Challenger Series because there is no compensation.
Do you know what happens if you get relegated to the Challenger scene in NA or EU? or anywhere Korea? ... Get fucked. Get fucked.You lose all of your revenue, there is no parachute, there is no safety net to help you out. And people can say, well you know all they deserve to get relegated. Do they?
So here comes the 2016, at the end of the 2015 we see teams like IMT, NRG and Echo FOXare entering the scene. And these are teams that are backed by very wealthy investors who are willing to outspend the market, because they are hoping to create a team in a fan-base now. So the when Nike and Coke comes and when the teams are able to get broadcasting rights they're established and they can get a piece of that pie in the future.
It's hard to be happy when I know that tomorrow we've got NRG and Echo FOX basically fighting for their lives. And that doesn't make me feel good that these organizations have both and these players have made large sacrifices to be where they are. It's a huge investment, and one of them is going to lose tomorrow. And so I don't really... it kind of kills the excitement for me, when I see those players walking around back there and those owners walking around back there. Like they realize one of them's going to lose their spot. And so it kind of kills the mood.
I want to move on to a franchise model which I think will provide stability for the players and for the teams, that's I think important.
そしてIMTやEcho FOXとともに今シーズン参加したNRGですが，結果的に2017 NA LCS Spring PromotionでEcho FOXに敗れ，そのままチームは解散となっており，また歴史は繰り返したことになります．皮肉にもPromotionするのはC9 Cですから表面的かは兎も角として，そういった興廃が繰り返されるのは心が痛むとのことで，彼はフランチャイズ制を提案しています．Mykles氏は現状の昇格/降格の仕組みは悪く無いとしており，リーグの形式に対する考えに若干のズレはあるようですが，目指している部分はチームに対する安定した収入である部分で一致していると思います．
In any game that is primarily run and operated by the developer of the game, almost any problem you hear about any eSports or conflict you hear about when it comes to broadcasting or a team owners etc. etc. boils down to the fact that the intellectual property of the game is owned by the developer.
One company that owns all of the intellectual property rights and can literally stop you from streaming on twitch, broadcasting on the TV anything like that.
scarra: What do you think with the critique that people say that the best team and the best players should just learn adapt. Because I've heard that even last year when the last worlds came around, people like "the new patch, well players and teams should just learn to adapt to the new patch because ugh, that is what they're getting paid for." Like the best players can always adapt to any situation?
Regi: I mean, I think that comments are bullshit, right? Because first off like, from an outside standpoints, really easy to say that. But they don't understand how much effort and time the players have to put into learning the game. It's like essentially if you go to school to become a math teacher, and all of the sudden you find out like six month later that you have to like teach science otherwise you'll lose your job. That's basically what it is, right? Because I don't want to get into too much but the way the system works. If you get relegated, you're done. And because the challengers teams are weak, if you get relegated you lose pretty much lose everything.
Most LCS teams lose money because stipends are stagnant, sponsorships for LCS team operations are shrinking and the cost of player salaries, content production, support staff and housing costs are spiraling up. The reason why I started to invest in other games was because LCS left me no choice. The relegation system is unstable and risky for everyone, other publishers are more collaborative and provide more opportunities for teams and players to make revenue.
The community and the players want the true best teams to represent them in Worlds, but the chances of an upset due to lack of familiarity with the new patch are too high. I have played as a pro for 5 years and Marc and others may not understand how disruptive this is to the careers of players and to the integrity of Worlds gameplay. Huge patch disruptions in playoffs results in unsatisfying results and lower-quality gameplay.
Riot reportedly made $1.6 billion in revenue in 2015. Why not invest some of that money has made back into the professional scene? League of Legends is the biggest esport on the planet, yet it’s combined prize pool for all six of its world championships is smaller than the prize won by Dota 2’s best team at The International last month. Prizing for the world championship has barely increased since 2012. Neither has the team stipend, which Merrill is so quick to state shows Riot’s commitment to developing the scene. That $12,500 per player per split (as of 2015) combined won’t even cover a single player on Dinh’s roster, much less pay for the team house, coaching staff, food, health insurance, and other expenses he’s covering for the players.
Where does that money come from? You know our LCS income? A $130kish stipend. A one time $3125 on icon sales (I'm pretty sure that's a ridiculously low team share -- we receive more than that MONTHLY on skin royalties for our team skin in Hi-Rez's Smite, which does not even remotely compare to LCS in viewership, even if we are in the conversation for best team in the world). A highly impressive $0 in monthly sponsorship revenue for our LCS team.
Our 2017 plans include new in-game team-specific items with revenue-sharing for teams and pros, as well as smaller steps like working with teams to sell more jerseys - currently in the NA LCS studio store and at the summer finals in Toronto - and with the cooperation of teams, we hope to bring them to our online store as well. These are just a couple of examples and we’re exploring a lot more major steps, like league sponsorships, franchising, media rights, etc.
If he's so concerned about the financial health of his players, maybe he should spend some of the millions he has made / makes from League of Legends on paying them instead of investing in other esports where he is losing money?
Real talk, that TSM sponsorship wasn't an actual HTC ad. It was a promotion for a VR video game for TSM to play (the title of the YouTube clip is literally "TSM plays raw data"). Regardless of whether HTC organized this or not, it's a tactic advertisement for another game.
This is against LCS rules because LCS isn't a platform for other game companies to advertise on - yes, this means there's a category that teams don't have access to but for any sport, letting quasi competitors advertise on the league doesn't make sense.
Survios, the creators of Raw Data, did not make any financial investment into the production of the video, nor did they approach us to get it made. TSM selected Raw Data themselves after reviewing a list of Vive games as they felt it would resonate most with their fans.
We simply cannot market the Vive without people playing it and showing the gameplay, and we hope that Magus and others at Riot Esports will understand this.
For instance, what is the difference between an LCS player streaming Deus Ex and making a YouTube video of a Vive game?
But with less avenues for advertisement in League of Legends, stemming from the restrictions on the teams and players, restrictions on the subreddit, and the lack of available marketing opportunities at competitions, it is becoming difficult to justify our investments into the scene.
Marc, I agree that these urgent issues need to be addressed immediately. There is a detailed proposal signed by NA LCS teams and players headed to your inbox today. We'll solve these problems together.
In the earlier days of eSports, Riot did a very good thing by creating the LCS. There was no way that anybody was going to give that level of production value to eSports. Riot did it off their own dime because they were making an awesome product and if they had outsourced, we saw that what happened when they outsourced that ESL in the early days in Europe, it wasn't anywhere near is good. There wasn't a production company in the west that was capable of doing that and monetizing it and making enough money to improve the production level to the point where it is at Riot currently. But now things have changed.