Blizzard's Morhaime, StarCraft caster Day9, Evil Geniuses CEO, and MLG chief talk eSports future

MIT Sloan eSports panel

For the first time, the MIT Sloan Sports Analytics Conference on Saturday played host to a panel on eSports to discuss what they are, why they are enjoying such a tremendous period of growth, and what the future holds for them. Developer, team owner, caster, and league manager were represented by Blizzard's Mike Morhaime, Evil Geniuses ' Alex Garfield, Sean " Day[9] " Plott, and the MLG's Sundance DiGiovanni, respectively. As Plott put it, "The numbers are becoming astoundingly big," and the proliferation of streaming technology alongside the rise of StarCraft 2 promises to change eSports indelibly.

"[The MLG is] ten years old," DiGiovanni said. "The people who know our organization, they have a strong attachment to a number of titles that we've run in the past. But we've never been in a position where we had the right title, the right technology, and a global audience base at the same time. Now we do."

2011 was a major year for eSports and perhaps a sign that some things have irrevocably changed. Plott was seeing 30 percent month over month growth in viewership, launched and quickly hit 14 million unique visitors a month, and Garfield's Evil Geniuses team sold one thousand growth in sales of its team shirts. It's a major change from earlier in eSports history, Garfield said, when sponsorship was the only viable revenue for teams and players.

Livestreaming technology might be the biggest factor in the explosive growth in eSports right now, but the other piece of the puzzle is StarCraft 2. It has some unique features that make it particularly well-suited to this medium and this moment.

"One thing that's unique about StarCraft 2," Garfield said, "both as a sport and as a videogame, is that the observing perspective is very similar, if not identical, to the playing perspective. And there have been various games and developers that have been eSport titles, take for example a game like Counter-Strike...Imagine what it's like to try and spectate that as a casual observer. You have 10 different first-person viewpoints to keep track of, and then an overview of the map, and they're all running around, but the problem is that the entertainment value is actually in seeing those reflex shots. And people tried over and over again to find a way to make that easily enjoyable, and it just wasn't. So when you have a game like SC2, where it's made to be observed and it's easy to understand...that's very very valuable."

Morhaime sees StarCraft's appeal as being very similar to that of poker (an analogy that several panelists drew during the discussion). "You actually, as an observer, get to see all the information," Morhaime said. "Get to see what both players are seeing, and they don't get to see that. And the whole asymmetry of information that you have in poker, where you know a guy is ahead by 80 percent versus this other guy's 20—they don't know that, and they have to sort of make guesses about each other and what strategies they're going to use—creates a lot of tension as the game plays out."

Growing pains lie ahead. Business models and metrics remain fluid and murky, and some aspects of the eSports business are just plain strange.

Plott talked about the incredible sense of ownership that the eSports community has toward its hobby and the people who make it possible. Unlike a traditional media "consumer-provider" relationship, eSports fans tend to act with a strong sense of partnership. For instance, while he asks for a $5 donation fee to Day9 Daily, he is consistently surprised by how his community responds to what amounts to passing the hat. "I say things like, 'Guys, this is a way for the show to remain free. You have no obligation to do it. And I'm going to try and not run that many commercials.' And we're flooded with emails, thousands of emails of people saying, 'You should run more commercials! You should run 15 commercials every hour! 'Cause that way there's more money.' And it's insane, that sort of feedback from the community."

Things are little harder for team owners and tournament organizers, who are dealing in a space that nobody quite understands or can quantify. Garfield explained, "As a team owner, I can't really do basic math about my business. I can't say that for every dollar I spend on salary on this player and sending him to the next tournament, I know that I'm going to get two dollars in re-sellable value back that I can give in exchange for sponsors. And that's kind of how a team is supposed to make money."

Still, these are issues that will likely be solved with more time and more communication among stakeholders. At the moment, eSports is evolving as it becomes more and more successful, and the business models will change to reflect that. Major League Gaming CEO Sundance DiGiovanni says the MLG's Winter Arena experiment was so successful that it is possible they will hold up to six more pay-per-view Arena events over the next twelve months. More importantly, however, he thinks that the MLG is building something that is sustainable.

"Yes it's for the fans and the players for today, but even more so it's for the kids who are 12 years old today," he said. "Because they're going to grow up and...when they're sixteen, for example, they're at a point where they can say, 'Mom, Dad, I want to go to this tournament.' They'll understand the rules. They'll be able to identify the sidelines. They'll know what's in play and what's out of play, and what's a good play. Because they will have grown up with it."

Edit: At the panel, DiGiovanni said the MLG was looking at doing up to 12 arenas over the next year. He apparently misspoke, and according the MLG meant 6 PPV events over the next twelve months. The text has been changed to reflect what he intended.