Omega League: revenue share between teams & tournaments

Instead of Valve’s The International tournament in August, a league collaboration between teams, Epic Esports Events & WePlay! has begun. This league comes at a dire time where the final Majors of last year’s DPC system have been canceled due to COVID-19 and the DPC Leagues of the coming year are still up in the air.

With 650,000 in prizing and all the best Western teams invited, it is bound to make a splash during the months where The International would typically take place. A precursor to the DPC Leagues coming in 2020-2021, the Omega League has two separate leagues: an immortal tier 1 league with 12 teams (10 of which are directly invited) and a secondary league called Divine with a 50,000 prize-pool.

The Omega League, a cooperation between Epic Esports Events & WePlay!

A Shift in Team/Tournament Business Dynamic

As noted in the title, Omega League is a Dota league that has a revenue share agreement between teams and tournaments. While the announcement text alluded to a closer collaboration between organizations to create a sustainable ecosystem. It was not outright saying what that meant nor the terms to achieve this. The revenue share includes all points of revenue for a competition including media rights, betting agreements, sponsorship, advertising and more.

With revenue in Dota is declining for teams and tournament organizations, especially due to the COVID-19 pandemic, a joint venture between teams and tournaments is a step to try and make Dota esports more sustainable for all involved.

The teams involved in this deal are all EU/CIS organizations including Team Secret, Team Liquid, Nigma, Alliance, Virtus.pro (part of ESforce Holding that owns Epic Esports Events), Team OG, Evil Geniuses, Na’Vi. Revenue share discussions for CN and NA organizations are still ongoing. This agreement is only for third-party online competitions. DPC-affiliated leagues, majors or tournaments are unaffected.

How It Started & Details

After WePlay!’s Mad Moon (Feb. 2020), WePlay! initiated a discussion about revenue share and closer cooperation with teams for future events and tournaments. When the COVID-19 pandemic caused Majors to be canceled for safety reasons, a surge of online event invites increased for teams. Strategically, this was an ideal time for teams to test the waters regarding revenue share agreements as they now had WePlay! opening the possibility that tournaments were willing to cooperate in regards to a revenue split. With the COVID-19 pandemic issue shifting power towards team organizations, they could now determine the scheduling for their participation on their own terms.

Unified, teams sent out proposals (RFPs) to tournament organizers: OGA Dota Pit, ESL, WePlay! and Epic Esports Events with no specified initial revenue share amount in the terms. Different conversations varied in their amount for the teams’ exclusive participation during those dates. These terms give tournaments exclusive calendar dates with no competitors and allows teams to see what kind of revenue they can generate in an esports scene that offers very little. These discussions also helped untangle the overlapping scheduling tournaments were proposing without coordinating with one another first.

ESL and WePlay! agreed but Epic Esports Events held off (before eventually joining with WePlay! to create the Omega League). For Omega League, less than 10% of revenue from sponsorships, advertising, betting and more is shared revenue.

Lastly, these agreements are on a per-event basis and may not continue once the new DPC season begins.

Strategic Goals & Outcomes

The Omega League achieves several goals for tournament organizers. For WePlay!, they further cement their place as a leader in tournament organization for Dota 2 and other Valve-related games for future consideration of the DPC Leagues and Majors, beating out StarLadder and the Epicenter brand.

For EEE and ESforce, the Omega League keeps them desperately afloat and involved in the Dota 2 scene during a critical year for their survival (hence why they’re joining forces with WePlay!, a direct competitor and very likely successor). Both the general manager for Virtus.pro and CEO of Epicenter/EEE have departed from the organization. This year, Mail.ru Group had to write off 70% of the Holding and their initial value of 100 million has dropped to 30 million in only a couple of years. This goes without saying that the Omega League also helps RuHub who have been suffering since the Maincast/ESL/DreamHack exclusive deal. Back in January, I disclosed a rumour that Maincast paid an 8-figure amount for a multi-year deal with ESL & DreamHack. RuHub is usually the default buyer for CIS media rights to ESL/DH events (approx. 1 mil per year).

It is unsure that ESforce will remain in existence for 2021 as they may not hit their goals for 2020 especially if Epicenter does not win the rights for any DPC Leagues or Majors.

For teams, this is the first step towards a sustainable future for Dota. At the moment, teams are nearly powerless compared to the stronger influence and involvement they have with League of Legends, Counter-Strike and other games (not saying it’s perfect over there either). Teams earn about 10-20% of all prize-revenue but can pay up to 400,000+ (or more – pre-COVID) in player salaries on top of lodging, food, visas, services and more. To add, Dota players are less willing to do sponsor-related activities compared to players in other games, causing sponsors to look elsewhere for cooperative opportunities (e.g: League of Legends, streaming, etc.). This causes an uncomfortable position for teams where they cannot capitalize on the success of their Dota squad for future sponsorship. Teams earn nearly nothing from that success and depending on the level of success (or lack of) of their roster, a team can lose their entire brand power in Dota if the roster dissolves or moves on. This is not to paint team organizations as victims, but rather to continue outlining my conclusion I wrote about the Dota 2 esports scene back in June, 2019 from my article “Dota 2 Majors are not guaranteed profitable events“.

June 2019: though it talks about tournament organizers, the same emphasis on players also leaves teams on the short-end of the valued stick.

It is only natural that teams seek new revenue streams if they are finding dwindling opportunity with players and sponsors. Borrowing ideas from joint leagues in CS:GO with the ESL ‘Louvre Agreement’ may be an exploratory avenue that could lead to be more equitable ecosystem for Dota 2 outside or even potentially within the DPC system (pending Valve’s decision-making). It is very clear that the intent of Omega League is a case-study to display how the Dota 2 esports ecosystem could work to the benefit for the businesses that put the most risk and involvement into the scene.

Teams understand that tournament organizers earn little to nothing (e.g WePlay! losing money on each of their events) but teams also face the conundrum that without LANs, there is no value in Dota for (western) sponsors. This emphasizes the importance of results and to ignore other obligations that would help a team business grow an audience, consistently create engagement and engagement for current and future sponsorship opportunities.

Especially true when the Dota audience is shifting to China, SEA and Europe/CIS – markets that are secondary to sponsors. These factors lead to high operating costs with revenue and sponsorships very heavily emphasized on performance: both for players and team organizations.

Conclusion & Thoughts

This article purely aims to inform audiences about the current business inner-workings within the Dota 2 scene. If Valve draws decisions based on what fans and players call for, then the only solution to a better Dota scene is to inform that public of the struggles, growth, success and challenges esports faces.

The Omega League is a step for teams to generate revenue for a game that faces a systemic challenge of finding a reliable ecosystem. It is also a demonstration of trying for consistency in quality, production, story-telling and business collaboration. If you compare Dota to the games that teams are moving towards: PUBG Mobile, League of Legends and Rocket League, you see a consistency of exposure, potential and results (whether lost or not).

As the DPC system changes every year:

  • limiting opportunity for event organizers due to less open calendar dates for third-party tournaments
  • limiting the amount of involved tournament organizers (from 11 majors/minors to 9 to 3 majors and 6 seasonal leagues) driving event organizers to other games
  • and continuing to emphasize performance-only value without much room for additional exposure for teams

it is becoming increasingly difficult for tournaments and teams to find stability and profit, especially if sponsorship value is lowering with each year (as noted in my 2019 article: “Dota 2 Majors are not guaranteed profitable events“).

To repeat, this is a systemic problem with the Dota esports scene. Omega League and revenue share is not about the money but a search for stability in a scene that disregards businesses.

7 Years, 400 Million (2019): Dota Builds Project Year-in-Review

This is a continuation of 2018’s article, “5 years, 350 million“, “4 years, 275 million“, 2017’s “3 years, 170 million“, 2015’s “2 years, 100 million” and 2014’s article: “1 Year, 40 million: Dota Builds Project Overview.

The Standard Hero Builds Project creates and manages over 161 hero builds to help new players learn how to play their characters.

I am celebrating 7 years of updating the Hero Builds. In December 2018, I took a haitus. In February 2019, I announced the end of the Hero Builds Project and 1 month later, I was sponsored by Rivalry.com to revive the project.

If I wrote in 2016 to 2017 that those were the most prominent years for the project and myself, I would say that 2017 to 2018 was considered the most difficult and enduring for me and the project.

5 Years, 350 Million (2018): Dota Builds Project Year in Review

For 2019-2020, I would say that my shift in focus and desire to update the builds without having to take too much interest in public opinion has increased my dedication to Dota 2 and Hero Builds. Thanks to my sponsor, Rivalry.com, my motivation for the Hero Builds Project continues. The sponsor confirms there is an inherent value in the dedicated and consistent work, regardless of waning feedback or vocal support.

Within this review, I will provide statistics detailing the impact the project has had in public matches, growth or decline in subscription growth and more. In addition, future plans, thoughts and desires will be mentioned for consideration.

350 Million to 400 Million Subscriptions – A Year of Statistic

Despite the article being released in 2020, I maintain subscriptions statistics on an annual basis (previously bi-weekly). The main reason for this lower rate of stats tracking was that the interest about these statistics is very little nowadays and the growth has been relatively consistent for the past years.

Does this look familiar? It’s because the daily rate of games that use my guides has not changed: 82.96% (82.67% in 2018).

From what we were able to simulate, approximately 82.96% of all daily matches use one or more of my guides. The percentages represented show the likelihood of 1 to 7 guides simultaneously being used during a match. There has been an increase 0.29% of daily guide usage per game. We found this very peculiar and went to verify with an independent source and fellow data scientist who verified our methodology and numbers. That said, anyone who wants to discuss our approach and analysis, we welcome additional (expert) opinions (like in 2018). Please contact me directly to further cooperate.

Between 2018 to 2019, this section’s results can be summarized as the following:

  • Subscription growth has been positive with 50 million new subscriptions
    • 400 Million in total subscriptions across 161 guides
  • 500 Million more games have been played using my guides
    • 1.8 billion games since 2013 (including overlap)
  • The Phantom Assassin guide leads with 5 million unique subscribers
    • The highest on the entire Steam platform
  • Average # of subscriptions for the project reaches 2.5 million

I am still very happy that there is continued growth and satisfaction with the hero builds. With the New Player Experience coming, I am hoping that future users will continue to seek out my builds.

Sponsorship

Today, I am happy to announce my continued partnership with Rivalry.com. Their continued support has been generous and their expectations have been so few (I am not even obligated to mention them in any social media posts or blog posts). As Dota leans more towards Eastern audiences and sponsors seek Western impressions, it is relieving to see Rivalry continue to support me and other brands, people and teams in this space.

Future

Last year, I tried my hand at doing a coaching show with some friends who were generous enough to give their time to guest-appear. In addition, I’ve started writing some professional insights into the esports industry. Both were great in exploring some opinions I always wanted to say. Though I do enjoy working with on-camera talent, I am not so sure it is the right calling for me.

In addition, last year I enjoyed my time working on the StarLadder Minor, Berlin Major and PUBG Europe League. Similar to my professional work two years ago, the insight, experience and knowledge I’ve gained in esports has been tremendous.

Last year, I wrote a variety of articles about the esports industry including dropping some knowledge about the Dota 2 scene. It has lead to a lot of new career paths that I am currently exploring.

This year, I would like to say and do more. I’m seeking to better display my qualities and explore what I can and cannot aptly do. The importance of always wanting to do more helps against questions of self-doubt. A few ideas have been circling in my head ranging from on-site event interviews to more Dota coaching but I am unsure if they are worth pursuing further. That said, both stem from my desire to learn and be able to do more with Dota 2. For now, I continue to test and research hero builds on my Twitch channel. As always, my methodology to update the hero builds has been a mix between watching and researching commonly-played item/skill builds to personally testing them and seeking feedback on improvements.

Finally, last year I wrote some suggestions for the upcoming New Player Experience for Dota 2. For the Hero Builds System, I continue to advocate the same things I have for the past 5 years: “[…] improve guide selection for new users so the first one at the top isn’t picked just because it has the highest subscription count and games played (these indicators are mostly due to those guides being around the longest).”

Not listed in the original post, this spontaneous idea I had is something that I think would be really cool to include.

Conclusion

You’ve made this relatively ordinary person achieve something pretty extraordinary.

February 2019

I think I’ve talked about why I started making hero builds many times and the skinny of it was a mix of things: my self-validation through being useful for others, a tribute to the old Play-Dota guides I used in the early 2000s and most importantly: being pro-active with my frustration that people didn’t know how to play or build their heroes (including myself).

The project achieved some, if not, all these goals and there’s really nothing more I can be thankful for than that.

Is there value in mobile esports?

Yes. But it is of regional value and to get into mobile as a team brand or tournament organization would depend more on if it aligns with your brand or not. For tournament organizers, the desire to move towards mobile and the SEA/China market means further income sources through production work for publishers. For teams, it would widen your audience reach but may not align with your core target fanbase or sponsors’ interest as mobile games esports’ popularity has not hit North America (yet).

That said, as publishers make moves to bring their PC-centric games to the mobile market such as Riot Games’ Teamfight Tactics, Epic Games’ Fortnite, Valve’s Dota Underlords, Activision’s Call of Duty: Mobile and PUBG Mobile (published by Tencent), a two-way bridge is formed: converting North-American audiences to mobile and introducing Eastern mobile players to western franchises.

As 5G starts to roll-out across the United States and Europe, mobile gaming will be more embraced. For this piece, we will skim over the landscape of mobile esports as well as making note of worthy titles and scenes to consider and how they compare to other competitive titles.

The Free Fire World Series was among the most watched esports title on YouTube.

*if you’re interested in following the mobile scene, consider Jeff Chau’s twitter for interesting insight as well as his valuable medium post

The Mobile Viewership Landscape

As of right now, the largest mobile esports regions are South-East Asia, China, South Korea. We say South East Asia as depending on the game, different countries pop up ranging from Vietnam, Indonesia, India and more. Additionally, LATAM also shows an immense popularity for the genre as we saw Free Fire World Series in Rio garner 2+ million peak viewers and over 7.5 million hours watched. Regarding which games are popular, Battle Royales and MOBAs have the longest staying power. Games like Free Fire, PUBG Mobile, Mobile Legends and Arena of Valor have millions in players that trickle down to an esports audience in the hundreds of thousands to millions.

While Twitch and Mixer are maintaining their strength and targeting to Western markets. YouTube has exploded with mobile game event streaming. Mobile Legends is the mobile imitation of League of Legends.

While these numbers are incredible (and they really are), be wary that this is the start of esports interest on Western streaming platforms. Going back to October will highlight that viewership and interest in mobile games from a creators’ standpoint has much more realistic numbers. Similarly, if we check out Mobile Legends Esports VODs statistics on YouTube, this viewership is also much lower (where YouTube is watched mostly in the West). The popularity of these mobile games has definitely triggered interest in Eastern streaming platforms, content-creators and viewership but it has not moved towards Western European and North-American platforms nor content-creators on Twitch/YouTube (yet). The lack of viewership outside of esports events may highlight that the playerbase has not translated to valuable viewership (yet) akin to WarGaming’s massive popular World of Tanks not translating to a popular esports scene beyond Eastern-Europe brands and viewers.

or some of these events include item drops with viewership. This heightens the numbers of viewers but leads to botting and an unengaged audience (“set-and-forget”).

Its Esports Presence

PUBG Mobile has made a presence Europe with events hosted by ESL and StarLadder but these were through contract with Tencent. It will be interesting to see how they will further push the PUBG Mobile scene in cooperation with tournament organizers.

The excitement about mobile esports is due to the immediate involvement of Eastern game publishers for their mobile gaming competitions. Tencent already dipping their toes with recent work into PUBG Mobile and now announcing a 5 Million prize-pool for 2020. However, when it comes to tournament org. involvement, it can be a mixed bag as there are proposals circulating from Tencent to certain tournament organizations seeking co-investment where Tencent aims to reduce their own spending in exchange for a co-invested partner from tournament organizations (who typically are looking for contractual work with publishers, not to increase their annual costs).

The latest mobile esports event, Free Fire, boomed with 2 million peak viewers and 7.5+ million hours watched.

To add, prize-pool on games is varied. For the Mobile Legends: Bang Bang, it boasted a prize-pool of only $250,000. The Free Fire World Series: $400,000. Compared to Western esports, the prize-pools pale in comparison. Teams, as well, mostly feature organizations not involved in mainstream esports titles we see in the West. In the past, Arena of Valor featured squads from Team Vitality, SK Gaming, Alliance, Team Liquid, Immortals and more. For Free Fire, there are no notable major teams actively playing as you can see here.

That said, as we saw with PUBG Mobile, new money is being injected with every new iteration of esports. Honor of Kings’ 2019 Champions Cup featured 4.5Million dollar prize-pool for their month-long league (crowd-funded from 2million to 4.5).

Conclusion

To summarize some concerns, Mobile Esports:

  • can garner a lot of attendance, especially if attendance to the event is free (Free Fire World Cup 2019 (not World Series in Rio))
  • can garner a lot of viewership, especially if there are free item drops for watching – leading to potentially inactive viewers/lower engagement (Free Fire World Series Rio)
  • does not garner a lot of viewership on Western platforms outside of these esports events
  • receives strong game developer support and prize-pool injection
  • has game developer support but they also seek co-investment from tournament brand.
Depending on which photo you find, arena attendance will be mixed depending on the game, year of its lifespan, price of ticket and location of the venue. (2018 Honor of Kings Champion Cup Winter Season)

There is a common misconception that player-base = possible esports reach or value for brands but the reality is that esports is always a trickle of viewership interest depending on the competitive perception of its audience. How serious are players taking their mobile games if it’s on mobile and these users are always in a setting not ideal for competitive focus (playing while riding the train, between classes at school, during lunch at work, etc.). There is more to the sociocultural consideration regarding if a popular multiplayer game equates to the esports-focused label.

This is the Mobile Legends World Championship Grand Finals. In November 2019, this event has 6.5 Million hours watched but nearly as much in attendance.

Secondly, publisher involvement does not always mean endorsement as they also seek investment from tournament organizers who have yet to fully dive into the mobile market (ESL, Vodafone, StarLadder have dipped their toes with work in contract with PUBG Mobile).

Thirdly, Eastern-Asia/SEA growth does not translate into western popularity, different cultures emphasize different gaming platforms and thus different focus and directions.

Despite my skepticism, I do believe this is the start of the mobile esports scene for both Asia and Western markets. My intro regarding the coming of 5G, the growing audience (new generations) of gamers growing up with games on phones and how traditional PC-centric games like Fortnite, League of Legends and Call of Duty can bridge users from moving from their PC to the mobile but also skew their view of competition of their favourite games regardless of the platform.

That said, there are some people in the scene who are trying to sell mobile esports as an underrated opportunity. I firmly believe they are relying on FOMO (fear of missing out) to get brands to invest instead of determining if mobile esports is a sound, long-term investment.