Where Do We Go From Here?

BY Andrew Miesner / August 7, 2009

Part 1: “eSports, we have a problem”

Written by Matt “divito” DiVito

The outcome that many an eSport fan predicted, and was waiting for, finally came in the form of a press release on November 18th, 2008. The Championship Gaming Series had been shutdown, its partners citing their idea as trying to be “ahead of the curve,” but that it was too early to be profitable. This resulted in many players and staff jobless and has left eSports in a strange place. And while there was a collective celebration and ‘I told you so’ moment emanating from the traditionalist eSport fan base, this outcome put a large question mark atop the entire eSports community, and its future.

jason lake cgs

The initial talk throughout forums saw that question mark in the form of where all the players would go, and who would form what teams for the current ’09 season. Very little attention was paid to what would happen to eSports during the year and whether we’d see a setback or not. Indeed, one of the first important questions the community should have followed the shut down with was, ‘where does this leave us?’

One strong view from amongst some members of the community is that it poses a problem for the business side of eSports, stating that this shutdown left eSports as tainted in the corporate world, at least in North America. One of the early spokesmen for such a position was that of current Complexity COO, Jason Bass, who let his thoughts out in the initial shutdown news piece comments, stating, “what really happened is News Corp. one of the largest companies in the world sent out a press release to all major media outlets saying eSports does not work. The business model does not work.” 

Ignoring the specifics and looking just at the surface, that is precisely the case. The press release that many a 1.6 fan were cheering for has put up a red flag for any future investors of this space, telling them to either tread carefully or avoid completely. Such an outlook is shared amongst many people, including former CGS announcer, Marcus “djWHEAT” Graham.

“Anytime there is closure or failure in eSports the corporate world takes notice… It’s not even about CGS… just take a look at 2002-2005 when Intel and AMD were fighting for the space, nVidia and ATI were at each other’s throats… which was great for us because we had events.  But why aren’t these companies as dedicated now?  Could it be that they’ve seen no monetary or intrinsic value over the years?”

Indeed, for organizations of yore and competitions of the past, it seems that the steady and stable companies that once fed our sport have resorted to much lesser roles in the community, if they still reside at all. Perhaps the return on their investment was either non-existent or not enough to advocate the type of money being spent, or maybe it was the result of budget cuts. Either way, it appears that no one has found just the right formula for eSports involvement, whether it be with organizations or their sponsors.

Nick Fitz

Now all of this ‘doom and gloom’ probably doesn’t do much for the average fan, and with two former CGS employees quoted above, is this view limited to those involved with the CGS? Or does this opinion reside with those that were outside the CGS?

For those spoken with, it appears to be the latter. Included is Nick Fitzsimmons of x3o, who sounds off by saying that the shutdown of CGS is “definitely a set-back for eSports … it is definitely not a good indicator for how well our industry is doing.  A company that invested $25 million into their first season of a gaming league has pulled out because they do not find eSports to be a profitable venture at this time; how is that supposed to make other companies feel when they think about investing in teams and leagues?”

Alex Garfield, manager of Evil Geniuses, has a similar but slightly different view, explaining “while I don’t think anyone can dispute the fact that a negative precedent has been set within a certain sector of the corporate world, I don’t think the CGS’ collapse will be as devastating a blow as some have predicted.”

He continues, “the fact is that eSports presently still has the very same upside and appeal that it did pre-CGS, and its reach continues to grow … While the North American independent community declined slightly in activity when the CGS began, it’s not like the sun stopped.  Correspondingly, I don’t think it’s accurate to view the CGS as a defining moment in the evolution North American eSports – a significant one, certainly, but not a defining one.”

Without a doubt, the CGS has filled its page in the history books, but it leaves its mark without a very positive review amongst the community, and in turn, leaves eSports with its own less than stellar review in the minds of investors. The plan of the CGS to stabilize eSports further and push the envelope has failed, and just as the CPL and WSVG found out, no matter what you do, ignoring or falling out of favor with the eSports community will simply not result in success. 

It doesn’t matter where across the eSport’s landscape one is situated, the corporate cloud looms over everything, and the shutdown of the CGS will have an effect on our future. That by no means implies that eSports is doomed, but it will take a more intelligent approach for a new entity to enter the eSport’s space. The potential and profitability is there, but it will take someone with the knowledge, idea, and capital to make it happen. We could very well be in for dark times ahead, if we haven’t seen it already, and the resiliency of the community will be tested. Will we pass the test?

Next issue preview – Part 2: “Status: 2009”

Many fans have touted the shutdown as a great thing, heralding the chance for everyone to resume their place among their former respective places; Source players back to 1.6, staff members returning to their places among teams and media organizations, all as it should be. Was it all that rosy? While some players got right back into the swing of things, what of those who have stayed silent? What of the other games and its players? And how do the organizations running the leagues and tournaments feel and prepare regarding the rest of the year?