More Money, More Problems? Crowdfunding E-Sports Prizes May Not Work Well

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Steve Anderson
The Video Store Guy
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More Money, More Problems? Crowdfunding E-Sports Prizes May Not Work Well

On the surface, it seems like such a no-brainer, doesn't it? The idea that bigger prizes mean better e-sports events is just so perfectly rational. After all, who doesn't want a cut of a $10 million slice of prize purse? Who doesn't want to fantasize they could even have a shot of competing for a slice of that action? Who doesn't want to watch the resulting huge games that come from eager competitors out for their own slice of that magnificent pie? But there are some who believe that getting such cash via crowdfunding may not be the way to go after all.

Recently, Riot Games--perhaps Valve's biggest competitor in the e-sports field--brought out its own massive competition, offering up just a fifth of what The International did. But Riot Games didn't turn to crowdfunding, a move it considers tantamount to begging, according to reports. That's debatable to say the least, but it wasn't Riot Games' only reason. Also cited was that, if Riot Games stayed out of crowdfunding, it could keep the quantity of the prize pool stable. If it faced a fluctuating cash pool, as Valve may with its crowdfunding dependence, then it may be perceived in the market as a lesser product, unreliable, and potentially on the way out at any given time.

Naturally, that's a point subject to debate as well, but it's a perfectly rational point. What would anyone think of a game that, one year, offered up $10 million in prizes but the next year offered $6 million? Some might think the league was going broke, or was otherwise losing its impact. That may not necessarily be the case, of course, but it may look that way. And as anyone with an understanding of marketing will tell you, perception counts for quite a bit, potentially almost as much as reality itself.

Still, Riot Games may be missing out by not taking crowdfunding. After all, it's not like it needs to advertise just what proportion of its money comes from crowdfunding. Think of it this way: in Valve's case, it may have gotten up to $10 million with crowdfunding, but next year, it maybe only got $6 million. It doesn't need to stay at $6 million, and could pony up $4 million of its own cash to keep the total consistent. That could get pricey after a while, granted, but there's always the possibility of recovery.

Allowing crowdfunding also does something else; it provides a since of connection for the crowdfunder, a real sense that "I contributed to this" and "I help keep this going." That's a shot of self-esteem that's hard to turn down, and may well prove to be what helps keep the whole series going.

Indeed, Riot Games has a point in not taking crowd money to fuel prize purses. But Valve has a good point in doing so. This may well be one of those cases where what works for one works best for one, and may not apply too well elsewhere. Still, e-sports, and big prize purses, are likely to keep showing up for some time to come.


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