What were the top-grossing video-games of 2013?

On reading some of the financials disclosed recently by games publishers, I had this question in my head: what were the top-grossing video-games of 2013? I’ll do a simple write-up here using a few public sources and some ball-park estimates.

To start off, let’s define top-grossing as measured by player spending. That is, I’m not particularly concerned with how much revenue publishers/developers took in (versus the cuts taken by the various distribution channels, or factoring in how revenue is recognized from an accounting perspective), but rather looking at how big the pie was in terms of money that players paid out-of-pocket.

As a first step, let’s look at boxed retail, which is mostly console/dedicated handheld titles: http://www.vgchartz.com/yearly/2013/Global/

Grand Theft Auto V was clearly the monster hit of the year, with almost 30MM units across Xbox360 and PS3 in 2013 (Take Two announced 32.5MM units shipped recently). Assuming an average retail price of $60 + tax (say, 10%), GTA V comes in at just shy of $2B of player spending. (A different cut is using Take Two’s reported earnings data, where GTA accounted for 72.2% of $2.15B from Mar-Dec 2013, which is $1.55B – which is about $50 per unit, which sounds about right for the pre-retail markup price.)

Call of Duty: Ghosts had close to 15MM units, which translates to about $1B of player spending (assuming $60+tax).

Aside from these two titles, no other title seemed to come close to $1B of player spending – Pokemon X/Y had 10MM units, but a lower retail price ($40), so it would come below $0.5B. Fifa 14 had close to 9MM units, which would be around $0.5B as well. It’s also worth noting that the top PC game at boxed retail was Starcraft 2: Heart of the Swarm, with only 1.1MM units.

Next let’s look at PC digital retail (as in, purchase once, play forever, via Steam etc.). I’m actually drawing a blank as I write this thinking of a major PC game in 2013 under the digital retail model that would come close to $0.5B or more. (Doing a quick scan on steamgraph I really struggled to find any 2013 releases that would be likely – so let’s table this for now.

Next up – subscription-based games. Or, basically, World of Warcraft. I’ll just do a quick back of the envelope exercise rather than dig through Activision earnings. It seems the last publicly announced WoW subscriber numbers were 7MM as of July 2013 – assuming $15 per month (ignoring the bulk discounts and tax, or regional pricing models in Asia – which could really change the picture but I haven’t researched this in detail) that comes out to $1.26B. So WoW is probably around the billion dollar club in terms of player spending.

Next, free-to-play games. A big disclosure/disclaimer here, I work on League of Legends in my day job, and I will not be disclosing any internal data points. Instead, I’ll only use publicly available info, such as this a publicly released research piece. (I’m not vouching for the accuracy of the report, especially any League of Legends estimates from this research vendor.) From this source, it seems there’s 2-3 online games under the free-to-play model that are in the ballpark of $0.5-1B in player spending.

Lastly (and this is what I really want to talk about), mobile games (basically iOS + Android). GungHo released their numbers recently, and Puzzle & Dragons scored huge, accounting for 91% of the $1.5B revenue. Adding back the 30% app store commission (I’m assuming their revenue numbers are net of this commission, since that’s what they get from Apple/Google), that comes out to just shy of $2B in player spending. [EDIT1: I’m now assuming that the standard revenue reporting for mobile games includes the Apple/Google 30% cut, as this was stated in the reports last year on Supercell, e.g. this post]

While we don’t have full year numbers for Clash of Clans or Candy Crush Saga, it’s not far-fetched to see them in the billion dollar club. For example, some research vendors estimate that Clash of Clans was the overall top-grossing iOS game of 2013, while Candy Crush Saga was the top-grossing Google Play game of 2013. Picturing what we know about Puzzle & Dragons, then these two titles are almost certainly billion dollar titles in terms of player spending. [EDIT2: Supercell’s 2013 revenue is $892MM, so Clash of Clans by itself may be around $500-650MM, since it is generally higher ranked than Hay Day].

[EDIT3: So King filed their IPO prospectus, and we have a lot more data on Candy Crush Saga. If we do a simple estimate and take the reported bookings contribution from CCS from Q4 2013 (78%) and apply it to the whole year revenue of $1.9B, that’s around $1.5B from CCS. And King reports gross revenue, so that’s the amount players spent.]

Mobile Card Games

(A sort of free-flow post that goes all over the place in my attempt to get back to blogging)

For the past couple of years, app stores around the world have been invaded with a range of casual card games. I’m not referring to card games of the poker / casino variety (though that’s certainly a major category revenue-wise, especially in western markets), but rather the “collectible card game” type which has taken an interesting evolution in mobile.

One of the earlier games to hit market success in this model was probably Rage of Bahamut, which still puts on a respectable showing today (I was able to quite easily find it on App Annie’s grossing charts). But since then tons of clones have leveraged the same underlying engine, some with astonishing levels of success – Puzzle & Dragons being the flag-bearer (it has a match-3 mechanic, but the meta gameplay is the same). Various big name IPs have also been leveraged, such as Marvel (Marvel Puzzle Quest) and Star Wars (with the horrendous Force Collection mobile game). In China, “I’m MT” reached massive success with a derivative IP (it’s based on a fan-art based on WoW), and since then there’s been literally hundreds of clones, many infringing on global IP franchises such as Naruto, One Piece, and League of Legends (disclosure: which I happen to work on).

Put aside the specific puzzle mechanics in Puzzle & Dragons etc. (which I argue add some real gameplay engagement but doesn’t explain the popularity of the overall genre, especially all the games with no combat mechanic at all), the basic formula of these games is the card “level-up/evolution fusion” mechanic, the randomized card purchasing via a treasure-box, and a cheap PVE questing system.

The “level-up/evolution fusion”  mechanic is essentially a convoluted card leveling system which dramatically extends the collection depth, obfuscates the collection cost, and acts as an economy drain for in-game items that players farm up – a card can be both “leveled up” by using other cards as source material as well as “evolved” (again using various items as material) to become a different card (usually a higher-tier card of the same character). So, say you have a Tier I warrior that is level 5, he can be leveled up to a max of level 30, at which point he can be evolved to a Tier II warrior that starts at level 1 (and the cycle repeats).

The card purchasing treasure-box functions to add scarcity (and therefore collection depth) via randomization. It satisfies a psychological itch very similar to gambling (and is often called a gambling mechanic). It’s also the same primary gameplay loop that players seek out when farming items in Diablo (the chance to get some really good item “drop”).

The cheap PVE questing system is exactly that – highly repetitive, low production cost PVE engagement, with various bells and whistles on top to drive engagement (for example, some levels are only open at certain times of the day or week). Players generally farm these PVE levels to gain items that help them pursue the card level-ups and evolutions.

The fact that this basic formula has demonstrated immense market success is also revealing in other ways. For example, the fact that a large number of these games are successful without any stimulating “moment-to-moment” gameplay (e.g. Puzzle & Dragons’ match-3 combat) shows that players are engaging with them in a very low-intensity fashion (not in terms of time/money commitment, but rather attention and focus). These games are catered towards capturing the popular “fragmented time” space pursued by many mobile apps. They can be great “second screen”/multi-tasking experiences, which a high intensity game cannot satisfy.

At the same time, it’s really hard to see these games as not a fad. The formula can be extremely sticky initially but once players experience fatigue there’s very little to prevent them from churning. Some games have tried differentiating with higher production value (e.g. Million Arthur, which leveraged famous anime voice-actors) and/or IP tie-ins to create that initial draw, but I’m skeptical that players will continue to enjoy products in this space after engaging deeply with one product and breaking from it.

This brings my rather unfocused post to the other elephant in the room – Blizzard’s Hearthstone. This game has all the signs of being a massive mobile card game, despite only beta-testing on PC/Mac so far. Ironically, I get this confidence from playing the Chinese rip-off of Hearthstone which Blizzard has just taken action against. It has the right type of session length, onboarding accessibility, and gameplay depth. And it leverages a very familiar IP. (I do think there’s a lesson or two Blizzard could learn from the Chinese rip-off, especially the small client-size which I do think is a big deal on mobile.)

In short – Hearthstone may be the first massively popular “hardcore” game that is truly achieves cross-platform parity between mobile and PC/console (I’m discounting ports like XCOM because the mobile experience still has some issues). As more and more games figure this out, it may incidentally accelerate the decline of PC gaming. Once hardcore gamers form the habit of gaming on mobile, it will be harder to lure them back to PC/console experiences (demanding even higher production costs etc., which may break economics). All of this is just speculation at this point, but dramatic gaming engagement shifts may be coming.

The making of Diablo

I came across this gem of a book recently via video-games industry veteran Pat Wyatt’s blog. It’s a breeze to read and I finished the main chapters in a day (I say main chapters, as the book takes cues from its subject matter and contains a ton of optional extra reading).

The book is mainly a behind-the-scenes account of how Diablo came to life. I consider Diablo to be one of the best games I’ve ever played, and it has a permanent place in my childhood. As a personal side story, it was one of the few games that I bought a legal copy of growing up in China – I pooled together 160RMB (~$20 at the exchange rate back then) with two friends and we rode our bicycles to the burgeoning Zhongguancun area (now a renowned high-tech hub) in Beijing to buy the box.

The making of Diablo has a distinct Silicon Valley feel to it – not unlike the other stories from the west coast of how iconic tech brands had very humble beginnings. While Silicon & Synapse (the start of Blizzard) and Condor (the start of Blizzard North) did not literally begin in garages, these two companies were incredibly scrappy and were often fighting to make payroll. And then there’s also the part of overnight riches (due to buy-outs) and how the spoils were shared (or not shared) with the employees.

But mostly, the book is about video-games development – an endeavor that is a mix of traditional software development and a creative effort (like writing a novel or making a film). The Diablo that players loved was a very different beast from its original design document, and that’s a good thing – the fascinating twists and turns of how the product came to be is inspiring and showcases the amazing things that can happen when a group of people share a common vision and passion.

Max Payne 3 – semi review

I’ve been spending a few hours this past week on Max Payne 3. I’m a quite a fan of the series, and consider Max Payne 1 & 2 among two of the best action games I’ve ever played (which is a limited selection, I’ll admit). As such, I was quite enthusiastic about the 3rd installment, but halfway through I’m sorely disappointed.

My main issues with this Rockstar production are two-fold – 1) narrative over gameplay; 2) frustrations at the core gameplay design.

The first is by far my biggest complaint with this title. The previous titles in this franchise were noted for their noir style as well as comic-book narrative device, which I felt worked extremely well with the action gameplay. The series has always been story-heavy, with fairly complex plots (for action games), but the story development never took too long or got in the way of the action. With Max Payne 3, it seems Rockstar has got the relationship backwards – the gameplay is very frequently disrupted by cut-scenes, some of which are often drawn-out sequences. These cut-scenes also serve as save points for the “chapters,” which is how the game is organized (missions, effectively). Each mission is therefore typically broken down into half a dozen save points; a mission usually do not last more than an hour if the player is not getting stuck. This means that the core gameplay is effectively being given out to the player at 10-minute (or even less) installments, which breaks all sense of flow and suspension of disbelief. Additionally, while Max Payne was never a franchise about open exploration of levels, the game at least offered flexibility and progression in terms of gearing; 3‘s structure completely breaks this – guns come by easily, and are also lost easily (some cut-scenes/save points seem to reset/adjust the inventory).

Regarding gameplay, my frustrations so far are:

  • Extremely restrictive and linear level design, with a extended on-rails shooter sequence in one level being especially blatant and bad
  • The extremely fragmented level design, with cut-scenes liberally sprinkled about. Also, the player is often immediately placed in a boxed setting with immediate threats, which may seem like a good way to throw the player straight into the heat of the action, but after a while becomes highly repetitive. It doesn’t feel like a free-flow action game, but instead a sequence of action puzzles, where the player has to figure out the path of least resistance out of a scripted setting.
  • The introduction of cover mechanics, while in line with modern shooters, doesn’t seem to fit well with the frantic (and arcade run-and-gun) style that the series is known for. My memory of Max Payne 2 is the extremely enjoyable (and definitely arcade-like) combat sequences where you are overwhelmed by enemies and have to charge in with bullet time; this type of experience rarely happens in this title, and bullet time effectively becomes a support to fast aiming from cover.
  • The under-emphasis of weapons – it seems, based on the 7 or so chapters I’ve played through, that Rockstar decided that gun variety / uniqueness is not important at all to this game. Sure, the previous titles didn’t have any ridiculous sci-fi weapons, but previously each gun felt unique and acquiring a new weapon was an exciting moment; in this game, the guns are extremely generic, and because of the “streamlining” of inventory (reset every chapter, and sometimes within a chapter) there was little excitement when you ran across new arsenal.

So far, I’m still enjoying this title, but barely. There are genuine moments of suspension of disbelief, where you have an extended action sequence uninterrupted by cut-scenes and you are focused on making pathing decisions instead of being presented with a scripted scenario which you have to get out of. But these moments are hard to come by and I keep invoking memories of Max Payne 2.

Mass Effect 3 short review

I spent the weekend rushing through Mass Effect 3. The game is quite well polished from a production stand-point, though I was irked that one side quest was buggy. The ending generated massive player backlash, for very good reasons – I won’t go into details here as there are already excellent analyses elsewhere. In short, the production quality dropped off a cliff during the last 15 minutes of the game – it felt very tacked on and had numerous plot holes.

The remainder 99% of the game was satisfying. From a narrative point of view it felt closer to the original than the sequel – it was “epic” in thematic dimensions and there was constant tension (my main objection against the sequel was that the narrative of building out a team of diverse personalities – while all the characters were very interesting individually – felt like a cheap plot device to add 15 hours of gameplay). The entire universe was in peril; even against this backdrop, different civilizations were pursuing selfish goals and there were multiple conflicts across galaxies; you, as the central character, could choose to defuse these conflicts and unite the species against a common enemy (and you may succeed or fail depending on your choices).

The most interesting take-away I have about the game, is the unique immersive experience a video-game can provide, as opposed to other forms of media (such as film), and how it could leverage and expand on narrative techniques commonly found in films. There are a couple of really powerful moments in Mass Effect 3 – spoilers ahead – that demonstrate fully the power of the medium.

My favorite scene from the game is involving a side character, Mordin. Mordin is an alien (Salarian, to be precise) scientist introduced in Mass Effect 2, who speaks in a rapid fire monotone voice. He represents a strict utilitarian world-view, and is responsible for causing a disease called the “genophage” which made another hostile species, the Krogan, largely infertile – he sees this as an elegant solution to solving a complex problem. Over the course of the narrative of Mass Effect 2, his character development involves a side story where he discovers research that could cure the genophage, and it was up to the player’s choice how that data was used. Regardless, during this side story Mordin’s character evolves as he sees the damage that the genophage has done to the Krogan civilization, and he begins to feel remorse (while not necessarily changing his utilitarian view on the goals).

Mordin also serves as a source of comic relief within Mass Effect 2. His intentionally monotone machine-gun speech is always funny to listen to, and players could also unlock the following if diligent with engaging the character in dialogue:

In Mass Effect 3, the player is rewarded with a very dramatic scene that builds on top of these previous player investments. One mission provides closure to the genophage side-story, allowing Mordin (if the player chooses to do so) to cure the genophage and give the Krogans a renewed future. However, in doing so Mordin has to make a personal sacrifice, and during the climactic scene he quietly hums the song uncovered in the previous video:

Many a player have been quoted as crying when they first witnessed this scene. The beauty of the narrative here is that it is not only strong from a passive, cinematic point of view (the cutscene is well edited and can rival similar scenes in films and TV); but it is all the more stronger because the player’s interactions with the game led up to this point. The player interacted with Mordin, and got to know the character; there is stronger emotional investment than what is ever possible in film (which is all passive).

And of course, it is all the more intriguing that the player could, through a different set of choices, avoid this scene from happening. This to me was one of the best demonstrations of the power of the interactive medium, and the highlight of the game.

Mass Effect 1 & 2: a design review

Mass Effect is BioWare’s critically acclaimed space opera RPG series. It features original IP in terms of narrative, and in terms of core gameplay it also has made some very interesting design decisions.

Narrative

The series is much praised for its excellent writing. I’m not a huge sci-fi buff so I won’t dwell on this too much, but the series’ positioning of mankind as up-and-comers fighting for its rights in a mult-racial galaxy (its struggle to get acceptance into the powerful Council) is fairly refreshing. In this regard most of the praise belongs to the original Mass Effect. Another point of praise is the emphasis on player choice and consequence – players literally choose which characters live and die, making the narrative much more impactful and thought-provoking (do you save your loved one, or your loyal friend?).

In the sequel, from a narrative point-of-view the game takes a somewhat lazy approach. By setting the bulk of the story as a series of recruiting missions to build up your team, the narrative becomes a series of origin / character background stories. These are effective, and the characters are admittedly distinctive, but the overall story definitely pales compared to Mass Effect 1. There’s no sense of epic-ness in 2, compared to the historic struggle in the original, especially the climatical battle at the end of Mass Effect 1.

Gameplay

Mass Effect 1 is more conventional in terms of RPG elements. It is strictly single-player. It has a familiar inventory system, based on the characters’ various weapons classes, tools and armor systems. Players manage a team of 6 characters at max, and any given time the player can field 3 characters. Interestingly, characters that are not active are not punished; they level up along with the active members. This means there is less emphasis on prioritizing which team-members to develop (or make a choice early on regarding which characters will be used primarily). There is a class system in place, with unique skill-trees per class. This adds a lot of replayability to the game.

Combat is in real-time with a pause function to allow the player to setup complex tactics. It is in a 3rd person shooter perspective, and utilize cover mechanics. The game does not feature mana or any type of energy resource; there isn’t even the concept of ammo. Instead, special abilities rely on cool-down timers, while weapons can overheat if the player is too trigger happy. Another type of combat utilizes a moon buggy type of vehicle, which has two types of ammo and unfortunately has fairly awful controls.

Besides combat, there is major emphasis on dialogs, with players being presented various dialog options that affect the narrative. There is a moral system in place – performing heroic and just actions accumulate “Paragon” points, while cold-blooded acts that mainly focus on the outcome (the end justifies the means) accumulate “Renegade” points. Both Paragon and Renegade points unlock hidden dialog options, so while players could accumulate both (one does not offset the other), from a practical point of view the player should be consistent in one type of action. Thus the moral system also adds a layer of replayability to the game.

Besides combat, leveling up and collecting items, the game also offers character interaction in the form of romance. Romance is purely dialog driven – i.e. it doesn’t include a game mechanic where you increase the chances of romance by making a character active in duty.

In Mass Effect 2, BioWare made a number of interesting choices in reworking the gameplay. The inventory system is drastically streamlined, to the point where it is almost completely removed – players still manage different types of weapons, but they are not dropped by enemies nor do they have item quantities; instead, weapons are researched/discovered, and once you unlock one weapon, all characters that could use the weapon can equip it. Classes are also reworked, with condensed skill-trees – the typical character has about 5 spells to use throughout the game, with 1-2 of the spells being ammo modifiers (passive spells). The redesigned skill-trees also introduce a progressive points system – each spell has 4 ranks, and each higher rank costs more upgrade points to unlock. Upon unlocking the highest rank, the player can choose from one of two advanced upgrades – usually a more potent single target nuke vs. an AOE version of the spell. This again seems mainly aimed at increasing replayability, as there are more options for the player to explore.

From a combat perspective, Mass Effect 2 also took some cues from popular straight-up 3rd person shooters such as Gears of War. The cover system is less buggy, and combat in general feels more tense. The game also introduced a significant global cool-down timer, which means players could no longer spam spells in rapid succession. The health bar now auto regenerates if you stop taking damage, which again is taking cue from popular shooters.

Mass Effect 2 removed the moon buggy vehicle, while injecting a few new alternative game modes. There are two mini-games positioned as computer hacking in the game, and both are based on finding patterns. Another mini-game revolves around the collection of resources, which is done by scanning planets for minerals using a radar and collecting minerals when the scanner picks up a strong signal. The resources are used for tech upgrade research, so they are significant, but that also makes this mini-game tedious. In general, these mini-games seem positioned to balance the pace of the game – a small break in a long combat mission, or a break from progressing the story while just scanning unchartered planets for resources.

For die-hard RPG fans, Mass Effect 2 will feel like a hybrid game. It feels more like a 3rd-person shooter with strong storytelling, especially when you run the game at normal difficulty and usually don’t need to pause the game during combat for tactical micro-management.

Criticism

Mass Effect 1 definitely suffered from some bugginess in terms of its combat. Players could get trapped entering / exiting cover. While 2 made some big progress in this regard, the 3rd person shooter angle still meant that in the heat of the battle it was common to lose track of where your AI team-mates were – and since the combat is based on tactical management and team composition matters (e.g. you want to effectively send in your tanky team-mate to soak up damage), this meant combat still is frustrating at times.

Also, in both 1 and 2 the game relies on dialog to progress character interaction (namely, romance and additional backstories). This became fairly mechanical and repetitive as the player learns he needs to visit the support cast scattered around the spaceship after a couple of completed missions if he wants to unlock new dialog. A better way would be to have such major developments embedded in missions.

Another criticism is around UX. This is a minor point, but on the PC I expect to be able to double click in menus; yet the series forces me to click the respective “select” buttons to confirm an action. This becomes increasingly annoying as time progresses.

Starcraft 2 and the e-sports eco-system, part 3

In the third post of this series, I want to discuss how Starcraft 2 is interrelated with web social media.

The original Starcraft was born pre Google, blogs, and of course Youtube and Facebook. Starcraft 2 was developed through the years of the web 2.0 scene. This led to both in-game designs that incorporate web 2.0 (Facebook integration with user accounts), and more broadly, community developments that heavily utilize social media innovations.

Not all the community building is done by Blizzard. There is the obligatory Facebook fan page and Twitter account, but I wouldn’t say Blizzard has done an outstanding job at either (50k followers on Twitter is nothing to boast about, I’d say). What’s really interesting is the self-motivated and extremely enthusiastic gamers who are creating vibrant media content on top of the game.

For example, a number of “shoutcasters” have emerged as celebrities within the community (shoutcasting refers to live commentary on spectator video games, similar to sports announcers). One of the most famous such shoutcasters, Sean “Day[9]” Plott, even hosts a “Day[9] Daily” show, where he does hour-long shows announcing games and teaching strategies. Another shoutcaster, “HuskyStarcraft”, has quietly amassed over 100MM views on his Youtube account and has over 300k Youtube subscribers. He’s even branched off from pure shoutcasting to do the following parody music video, which has 3.5MM views:

Further more, gamers have strongly embraced streaming technology to livecast community competitions, or even just self-casting (where a player – usually a very good one – casts himself playing Starcraft 2). At any given point in time, video games are generally some of the top-viewed content on Justin.tv, ustream.tv and livestream.com. For Starcraft 2 fans, Teamliquid.net (the website of a professional Starcraft team) offers a convenient one-stop shop to see what streams are live at any time. Teamliquid also hosts a wiki site where players can view and document advanced gaming strategies. There have also emerged dedicated gaming streaming sites (own3d.tv), and dedicated Starcraft 2 casting sites (such as ragequit.tv, glhf.tv).

What I find interesting is that for sites such as Justin.tv and ustream.tv, which are usually popularized by pirated content (illegal rebroadcasts of live TV), gaming streams offer an attractive type of fully legal content. (Well, at least until the game studios start banning such gaming streams, which at least currently they are not doing as it’s free promotion for the games.) More importantly, such community media will strongly reinforce the popularity of the game, and help maintain its relevance. If Starcraft could last close to 14 years now and still be played around the world (a dinosaur of a game by video game industry standards), then Starcraft 2 could certainly hope for the same type of longevity with such community building.

Starcraft 2 and the e-sports eco-system, part I

I have been playing a lot of Starcraft 2 recently. A LOT. So not really a surprise I haven’t blogged at all the past 2 months (the game launched end of July). But I thought I should put on my MBA hat (on top of the nerdy gamer hat), and analyze a bit the gaming eco-system, especially since a lot of it is related to social media.

I plan to cover this in a series of posts. This first post will give a quick overview of “esports“.

Overview

Gamers have played competitively since the inception video games (the wiki article linked above gives a historical perspective). Commercialization began in the late 90s, thanks to the popularity of First-Person-Shooters (FPS) such as Quake (which I think gave birth to a lot of the gamer vocabulary today – such as pwnage). But where commercialized gaming really took off, as most people probably knows, is South Korea. The common catalysts quoted are that Korea had great broadband infrastructure, and during the Asian Crisis of 97-98 many people took on Starcraft as a way to kill time (though this second one sounds more unlikely). Anyhow – Starcraft, the Real-Time-Strategy (RTS) from Blizzard, really took off in Korea, and starting from around 2000, Korea has had professional Starcraft gaming, involving professional teams, full-time players, television broadcasting, and around the year tournaments.

Globally, various organizations have attempted to create major global tournaments (the Olympics or World Cup of gaming). Two competitions that I believe have had good longevity are the World Cyber Games (WCG) and the Electronic Sports World Cup (ESWC). Total prize money for WCG has steadily risen to around $500,000 from $200,000 a decade ago, split over 10 or so games. This is by no means a huge jackpot (for majority of pro-gamers it’s not a sustainable career), but the growth has driven up the popularity of e-sports.

Major Game Genres

Judging by the prize money involved (check out the above links for WCG / ESWC, for prize money per type of game), FPS and RTS are by far the dominant genres, though there are a few up-and-comers such as MMORPG (World of Warcraft) and DotA (a custom map on Warcraft III, which really doesn’t fall under any major genre). Other popular genres including guitar hero, fighting, racing and sports simulation (football etc.).

Interestingly, by and large most of the competitive genres are solo play (one-on-one). While most games, such as Starcraft, support team-based play, the major competitive format has been solo gaming. This has given rise to a series of individual stars over the years, most of which only enjoying celebrity status within the community, but a few who have actually made legitimate money and fame (again, mostly Koreans – look up the Wiki entries on “Nada” Lee Yun-Yeol and “Boxer” Lim Yo-Hwan, probably the two most famous professional Starcraft players ever).

In contrast, the only major team-based genre is FPS, and especially the hit game Counter-Strike. Counter-Strike popularized the 5v5 format, which has been adopted into DotA. Of course, many FPS games are competed in solo, such as Quake.

Major Countries

In terms of where most pro-players are, this is heavily biased by game genre. Korea by and large “owns” RTS, especially Starcraft and now Starcraft 2. The Korean pro-leagues offer the highest prize money (the recent first Starcraft 2 pro-league, GSL Season 1, featured a ~$90,000 cash top prize) and attracts the best players globally, however most of the top players are Korean.

Warcraft III, another popular RTS, is slightly more diversified, with good European and Chinese players alongside the usual Korean suspects. My personal opinion is this is due to Starcraft’s overwhelming popularity in Korea, which has kept many great players away from Warcraft III.

In FPS, the scene is very different, heavily dominated by North American and European teams and players.

Business model of professional teams

Again probably pioneered by the Koreans, the professional team setup involves a manager (who also acts as the agent for his players) and anything from a handful to dozens of players. Players earn salary and are often provided accommodation and food; any prize money won is split between the player and team (I’m not sure of typical ratios).

Teams get income from competition winnings and sponsorships / advertising. Typical sponsors are major IT manufacturers (Intel, Samsung etc.) as well as specialized gaming equipment makers (e.g. Razer, which offers professional gaming grade mice / keyboards). Teams may be based out of a Internet cafe (which sponsors the team), which offers an environment to train in.

Growth Issues

There are several major issues with e-sports / pro-gaming that have hindered commercialization efforts. First of all, outside of Korea, where Starcraft is a national past-time, core gaming remains a subculture in society, mainly followed by adolescent males – the demographics base makes a big media play (such as a dedicated gaming channel on cable) very difficult. Furthermore, this base of core gamers are further segmented by the types of games and the specific games they play (again in contrast to Korea, where most of the commercialization revolves around Blizzard RTS games, such as Starcraft, Warcraft III, and now Starcraft 2). This limits the total advertising dollars and overall market size.

Secondly, the inherent short product life-cycle of video games goes against the needs to build stable spectator sports. New games, even sequels such as Starcraft 2, need to innovate on the gaming mechanics to sell; this however makes following the games harder (imagine if football or any other sport had major changes to its rules and therefore strategies every 2-3 years).

Thirdly, the steep learning curve for a spectator who has not played the games also blocks market growth. Most of these core games are incredibly complex, for example any RTS would feature 30 or more different types of units, each with unique attributes and mechanics. Also, the mechanics of certain games makes spectating boring at times (in Counter-Strike, there is usually pro-longed periods of stalemate with short bursts of intense action).