The ECEsports Stakeholder Relationship Diamond is the framework that we have been using to understand the very quickly changing and ever-evolving world of esports. The relationships involved can be tenuous and difficult to navigate, to say the least. With the amount of money and reputations that are on the line, it’s easy to see the importance of understanding the massive, interconnected web of regulated and unregulated activity going on.
Esport athletes are just one small part of a global business empire that is growing by the second! As the terrain continues to come into focus, the importance of these athletes knowing how to navigate these relationships becomes more and more crucial.
In this blog, we’re going to spend some time exploring the relationship between the esport athlete and the world of Intellectual Property (IP).
The wide world of esports is made up of people. A lot of people. Those people make up the companies that develop the games, promote them and market them. Those people make up the labour unions and are the representatives who are standing up for the athletes. Those people are the ones who conceptualize and execute the IP that gamers and esport athletes ‘use’ to create their own IP. At the end of the day, it’s all just people, but those people have very different roles and represent very different interests for very different reasons.
The way in which an esport athlete shapes and forms the relationships around them will ultimately shape and form the impact, influence and longevity of their career.
So, to begin, what are the potential revenue streams available to an esport athlete? At this point in time, there are 4 and because of the nature of esports themselves, the relationship to IP is present, to a greater or lesser degree, in each one.
Streaming / Content Creation
Salary and Prize Money
The salaries and prize money earned by athletes vary widely depending on player, organization, game played and a host of other variables. Generally speaking, there is no ‘direct’ impact on these two revenue streams that result from the Developer’s IP right. That said, IP is inherently involved in both sources of revenue because of the Developer’s relationship with the particular esport, as we have previously discussed. If a Game Developer decides, for whatever reason, to limit or eliminate a player’s ability to play the game, then the obvious result is a limiting or elimination of the player’s ability to gain income from said game or game platform.
At this point, there isn’t much an athlete can do to protect themselves from this level of IP control. Almost all of the power rests in the hands of the ‘creator’ of the game…the Developer. There is very little recourse available to players, athletes or tournament organizers.
The need for individual player representation as well as player unions that can fairly and consistently provide a voice for the esport athlete is becoming more crucial every day. We will explore this important topic in more detail in an upcoming blog.
The concept of IP has far more impact and is more intricately involved, with sponsorship and streaming revenue.
Sponsorship / Partnership
In the age of astronomical salaries in ‘traditional’ sports, sponsorships still provide a sizable chunk of an athlete’s overall compensation.
Unlike ‘traditional’ pro sports, esport athletes have far less freedom to endorse products because Game Developers, leagues and teams reserve so many rights for themselves. We can never forget – athletes are always subject to the whims of the Game Developer who owns the game’s IP and can restrict or eliminate a player’s ability to play it, profit from it or even use it.
For the esport athlete, it is imperative that they understand that they are a brand. They are creating and building their own IP as they develop and gain a fan base. And we have discussed the importance of an athlete protecting their IP through the use of trademarks and copyright in my last blog.
Part of leveraging that individual brand as an athlete is the possibility of obtaining a ‘brand sponsorship’. This happens when a company recognizes the popularity and strength of an individual athlete’s brand (which can be evidenced, for example, by a large following on social media) and sponsors them.
Companies can also ‘partner’ with an athlete on a specific piece of content or for a specific event. Typically, this involves the company asking the athlete to promote a product, with a number of requirements as to how, when, and where they are to promote said product – for example, during a specific live stream on Twitch or at an ESL event.
It is important for esport athletes to understand how IP protections can benefit them. For example, trademarking prevents other players from using any part of another athlete’s persona, for any reason, on any platform. It protects the brand the athlete is or has built through their own hard work. Similarly, if an athlete has established a massive following in their online community, incorporating symbols, icons, slogans, etc., they should trademark ALL of those things. This enables them to profit from their use and prohibits anyone else from doing the same.
Faker, like many other athletes, has spent years creating, growing and honing his craft. Whether it was his intention or not, what he was really doing was honing his personal brand. His name represents his reputation and place in League of Legends as one of its Gods. He continues to make money playing League of Legends but, without owning the IP right to the name “Faker”, turning his personal brand into a career long after his playing days are over becomes infinitely more difficult.
Now I know Faker may be an unfair comparison to other less-well-known esport athletes, and you may be saying to yourself, “Well Faker is a unique situation, I don’t know if every esport athlete should be worried.” And while it is true that Faker’s reputation goes beyond the boundaries of esports, my point remains the same. Esport athletes should be taking proactive steps to protect their brand and persona – you never know when all that hard work is going to pay off, and when you can start cashing in.
Streaming / Content Creation
In many cases, an athlete can negotiate their streaming salary separate from their competitive salary. Regardless of their level or team, many esport athletes can incorporate online streaming as yet another way to supplement their income.
A site like Twitch can be a viable option for athletes but it’s not as simple as plugging in and playing your game and watching the money roll in. An athlete has to become a partner, invest in the hardware and software, establish their ‘place’ in the Twitch universe and engage their customers. In fact, many athletes actually find it difficult to stream and compete at the same time because of the number of hours and consistency required to develop a true “following” on a platform like Twitch. Still, platforms like Twitch and YouTube are viable revenue sources and as esport athletes become more entrenched in mainstream culture, developing that following will, in theory, become easier.
There are 4 ways to generate income from streaming:
Ads – Streamers’ ad revenue can be calculated in a number of different ways based on the deal with the ad service. It typically isn’t a major revenue source, BUT it can add up over time.
Subscriptions – For example, a Twitch subscription is $5 per month with the streamer receiving half of that amount.
Donations – Viewers can also donate to streamers through various sites, depending on what the streamer has set up.
Merchandise – Streamers can design and sell their own clothing and other merchandise in a variety of ways. Typically, this has been done through third-party sites (like Fanjoy) with links to the merchandise placed on their streaming platform page.
For successful streamers, like Ninja or Dyrus, who have thousands of subscribers (at $2.50 per subscriber) the total boost to revenue can be significant. Both were actually former esport athletes turned streamers. While they were both moderately successful, it was actually after they left the esports arena and started streaming full-time that their popularity really blew up…and their earning potential skyrocketed.
It goes without saying that, right now, there is definitely a draw to the streaming avenue because it can be more immediately lucrative than being an athlete alone. Time will tell if, and how quickly, that changes.
In the context of these 4 revenue streams that are potentially viable for the esport athlete, we have touched on the concept of IP and the interplay between the Game Developers and the athletes themselves. As an athlete finds their way and navigates the relationships that make up the ECESports Stakeholder Relationship Diamond, it is crucial that they keep IP front and centre… their’s and the Game Developers.
For esport athletes looking to attract sponsorships or other forms of funding, it is imperative to protect your brand. Before entering into any legal agreement or contract, companies will want to see that you have secured your IP. Athletes should trademark their brand before they start selling it – otherwise, someone could steal their logo and merchandise it.
For an athlete to be able to maximize their impact, their influence, their economic viability and their longevity they NEED to be creating and protecting their own IP. As they grow and succeed, they need to be taking steps to secure their future from a legal and representational perspective. For athletes whose desire it is to turn a passion into a career, pre-emptive steps must be taken to safeguard what is created along the way.
Thanks for reading my blog. The above content is not legal advice but observation about the vast esports field. If you have any questions or comments or would like to schedule me to speak at your event, head over to my website www.ecesports.gg