Why E-sports should adopt Web3(EN)
- Part.1 — Status of the E-sports Industry
- Part.2 — Combination of E-sports & Gamefi
- Part.3 — Positive Elements of the Web3 Game Industry brought from E-sports Club
- Part.4 — E-sports Clubs’ Web3 Movements
- Part.5 — Why Web3 Guild is needed?
Part.1 — Status of the E-sports Industry
I fell in love with the game starting with Starcraft: Brood war, which I played when I was young. I longed for many professional gamers who were superstars in the media back then, and I still remember their shining days. As of 2023, in various genres of games such as League of Legends (LoL), Valorant, Overwatch, and DOTA2, we can meet many E-sports teams and meet superstars representing each game. Many professional game companies, including Gen.G, T1, TSM, Faze Clan, Talon, and G2 Esports, are leading E-sports on behalf of gamers.
But there’s the same problem with famous E-sports clubs that all of these people might have heard of. That’s the constant deficit in net income. If you look at the Income Statement of Faze Clan, which was listed on the Nasdaq through the SPAC merger on July 22, you can see that there is a continuous deficit in net income.
The situation is the same in T1’s 2021 audit report. Although there are about $16M in sales, the net loss based on the cost is $17M. In other words, it is very difficult to continue the club’s operation with its own business.
This is because there is no business in the Web2 market where E-sports clubs can continue to generate cash flows. E-sports clubs are faced with a structure that costs a lot of money, including training gamers, marketing, and various events. but it is difficult to generate continuous profits through tournament profits, advertising, and goods sales.
So E-sports clubs are jumping into a variety of businesses in addition to managing game teams to get out of the red. Clubs like FaZe Clan and NRG focus on content in addition to training streamers, and 100 Thieves is building lifestyle companies around clothing. TSM and Gen.G launched Academy using their gamer pool.
Part.2—Combination of E-sports & Gamefi
In the previous game, E-sports clubs did not have ownership of assets in the game, so it was impossible to evaluate various assets owned by the club, but in Web3, ownership is recognized by the introduction of NFT, so valuation is possible. Real value can be generated by earning tokens and NFT rewards through play, as well as investing in NFTs that play a key role in the ecosystem.
In the existing market, if gamers’ play profits were generated only through tournament and league prize money, it will now be possible to earn profits through regular play. This will open a more sustainable revenue stream for the E-sports club.
In addition, it is expected that it will be able to create a sustainable profit structure and membership structure by issuing its own NFT in individual games. If T1 Skin, which commemorates the LOL Worldchampionship victory shown in the image above, and Valorant TSM Skin, were traded in the form of NFT, clubs would have been able to create a continuous profit structure through sales revenue and royalties.
Part.3 — Positive Elements of the Web3 Game Industry brought from E-sports Club
One of the biggest challenges for Web3 games is attracting early-launch gamers. Traditional Web2 games were relatively easy to attract gamers because there were many platforms and studios with a large number of gamers, but it is not easy for big game companies to attract early gamers after moving to Web3 games. Web3 games, which were previously called representatives of Ponzinomics, attracted users through high early earnings, but when earnings decreased, users escaped and the game ecosystem collapsed. In addition, it is questionable whether Web2 gamers are really playing that games.
These difficulties can be solved by working with the Web3 Gaming Guild and E-sports clubs. Rather than attracting Web2 gamers to their own marketing, a strategy that naturally attracts thousands to tens of thousands of gamers from the E-Sports club and Gaming Guild would be more efficient.
Also, the recognition, experience, and strong fan base of the E-sports club can generate great interest in the public in the Web3 E-sports field. Imagine a famous professional gamer playing in a Web3 game tournament. The E-sports club’s brand will add wings to Web3 Gamefi’s blast.
Of course, this partnership is important, but at the end of the day, games with good quality enough to attract E-Sports clubs and Web2 gamers should appear on Web3. I expect high-quality games with strong E-Sports elements to emerge in the future, such as Sparkadia, which will be released in 2023.
<PG DAO — Sparkadia Research>
Part.4 — E-sports Clubs’ Web3 Movements
The interest of E-sports clubs in Web3 can be seen in the VALHALLA project, which has recently attracted a lot of attention at Gamefi NFT.
- T1
- JDG
- Gen.G
- Talon
- Sentinels
- Wardell
As such, many clubs have partnered with VALHALLA to give VALHALLA NFT the characteristics of their identity. NFT holders with each club’s characteristics are expected to be given special benefits by the club.
In the case of Gen.G, it showed interest in Web3 and virtual assets through a strategic partnership with Bithumb, a large Korean exchange.
Fnatic has signed a five-year, $15M partnership agreement with Crypto.com to pursue a long-term Web3 plan.
Damwon Gaming is taking an active role in the crypto industry by creating its own Web3 Guild, DWG Guild.
The Web3 game project ‘Guild of Guardians’ partnership with E-Sports is also worth noting. Partnerships with famous clubs such as “T1, Team Liquid, FNATIC, Cloud9” show E-sports clubs’ interest in Web3.
Most of them are moving to preemptively prepare for the Web3 ecosystem rather than aggressive moves because Web3 games of quality that E-sports clubs can play have not yet been launched. We must pay attention to the movement of E-sports clubs after the massive launch of Web3 games in 23.
Part.5 — Why Web3 Guild is needed?
The reason why E-Sports clubs have difficulty actively jumping into the Web3 ecosystem is not only Web3 games’ low quality. This includes environments that are difficult for Web2 gamers to access, complex tokenomics, and NFT structures.
There is an additional cost to cover many projects and complex structures that even Crypto researchers can’t keep up with in the E-sports club itself. In this area, cooperation points between Guild and the club occur. A detailed guide to the new games and a detailed description of the complex ecosystem will be essential for the E-sports club.
Progamer DAO continues to provide gamers with research materials and detailed guides on Web3 games such as King Of Fighters and Apeiron.
<PG DAO — Apeiron Guide>
By connecting identity-verified gamers to the E-sports club through Soul Bound Token (SBT) in Guild, the club will be able to secure a larger pool of gamers than ever before. Gamers who participated in Guild can get closer to the E-sports industry more easily than ever before, and they can prove their activities using SBT. Gamers will be able to appeal more to the E-sports club.
<PG DAO — Soul Boun Token(SBT)>
Cooperation between Guilds and E-sports clubs can easily lead to the creation of amateur leagues in amateurs, not professional leagues, by naturally connecting more gamers to E-sports clubs. A Guild can give SBT-validated gamers a tier based on data and hold amateur leagues in each game based on the tier. By hosting an amateur league, the E-sports club connected to Guild will be able to observe and recruit more talented gamers efficiently than the traditional method.
Tudor Yoon
-Researcher at Pro Gamer DAO
Twitter : @baby_tudor
E-mail : tudor.yoon@progamerdao.com
