E-sports are a pretty big deal. Making money from e-sports, however… that’s something even the big names, like Riot Games, have yet to master. Big e-sports pushes are often referred to as “marketing expenses” meant to generate interest in the main game, not produce revenue on their own in the way that, say, a Major League Baseball game does.
Riot Games may be looking to change that soon, though, with the help of a division of Major League Baseball. The L.A. Times reports that Riot is close to finalizing a $200 million deal with Major League Baseball Advanced Media “to sell streaming rights for e-sports matches,” which could have major ramifications (one expert called it “a groundbreaking moment”) on how people consume their e-sports content.
While advertising revenue for Twitch streams is not insignificant, it likely pales in comparison to what major sports leagues get for all the beer and truck ads you see on a typical TV broadcast. By affiliating themselves with a branch of Major League Baseball (Disney and the NHL also hold smaller stakes in the company behind the streaming tech), Riot could likely draw upon more of those high-yield ads as well as introduce a paid service — possibly via a specialized app — to provide even more revenue that directly comes from viewers.
Your first thought is likely, “So they’re going to charge us for what we can get now for free on Twitch?” Riot likely isn’t stupid enough to cut off its millions of viewers of free content, but an app could provide extra content, such as advanced stat tracking, access to replays, additional commentary, camera views, etc. In other words, it could paint itself as a premium service, for the ultra-hardcore League of Legends fans who want more out of their broadcast, much like advanced cable and satellite packages for sports that offer similar features for superfans; the “basic” level of coverage could remain free. In any case, Riot reducing its reliance on Twitch is a definite plus.
It’s going to be interesting to see if this proposed partnership bears fruit, and what it will mean for the burgeoning e-sports phenomenon as a whole. Very few other e-sports-committed companies could afford this kind of partnership — Blizzard and Wargaming strike me as the only other two that might have a chance — though I could see a media company starting up an “e-sports channel” that covers a variety of smaller games from multiple publishers. In the meantime, what do you think of Riot’s potentially big move?