Wednesday, 29 November 2017

A Critical Look at the Ecosystem, Part 1: Esports is Not Just About the Top 1%
Esports Ecosystem
Image: Dota 2 The International, via Flickr // CC BY 2.0
This is the first in a two-part guest series, written by Hendrik Mokrusch, looking at the esports ecosystem. Specifically, the semi-pro scene and what needs to improve from an academic standpoint.
In the past, I’ve written about the different reasons why people play esports games. The greatest motivators were fulfilling the need for socialization and self-development, and being able to experience self-actualization by playing, competing and improving. This was true for players who pursued a professional esports career as well as for those who played only on the semi-pro level.
With millions of motivated, passionate and skilled players lurking out there, the question arises: How do we help them achieve what they want? We also know teams are always looking for the next big talent. How can we support them in their search?
Esports Career Paths vs Sports

Part 1: The Career Paths of Sports vs Esports

There is a relatively clear path for someone who wants to get into a traditional sport, such as football or rugby: start in a local team/club, get better, play in trans-regional leagues, and eventually get noticed by professional scouts. On your journey you play against better and better teams that are usually from regions farther and farther away — until you compete against the best in the world. In short, a traditional sports career is regional to global.
Interestingly, advanced technologies such as machine learning are also becoming more important in sports scouting and recruiting. Today’s most advanced systems can map and compare players around the world, effectively eliminating human bias from the scouting process. So even that old regional-to-global sports career structure is advancing in a way that allows highly talented players, in lesser-known regions, to take short-cuts to the world’s top teams.
 Neo and the Doors
The career path of an esports player, however, is arguably more complex. Embarking on your journey to become a pro player might make you feel like Neo in The Matrix Reloaded: entering an endless hallway of doors. Open the right one and you will be rewarded; open the wrong one …who knows?
In general, esports is both an online and offline activity. Before players need to attend offline events (LANs) their geographical location is not a quintessential ingredient to their team’s success. While you always need eleven players on the same field in football or five players on the same court in basketball, you don’t even need any of your esports players to be in the same country while playing. However, certain requirements might have to be met, such as verifying visas, making public appearances for your sponsors, or living in the team’s training and living facility, i.e. gaming house.
Until a team gets to that level, it’s definitely not regional-to-global (you don’t start in your local “esports club”). It’s something in between.

Part 2: The Characteristics of a Successful Ecosystem

Ecosystems are not tangible. We know they exist but we can’t really see them or feel them. In academia, we have hundreds if not thousands of definitions for what an ecosystem is. I’ll just give you the core idea here.
Ecosystems can be used to explain macro networks such as entire industries or micro networks, such as an esports team.
A (business) ecosystem may be described as an interconnected network of actors who vitally depend on the success of each other. Every actor both affects and is affected by the actions of others in their network. Just like their biological counterpart, business ecosystems have to be adaptive and flexible or else they will fail. In their book “The Keystone Advantage”, Harvard Business School professor Marco Iansiti and inventor Roy Levien also introduce the idea of ‘keystone actors’. These actors lead the development of the ecosystem and ensure that value is created and shared.
Ecosystems can be used to explain macro networks such as entire industries or micro-networks, such as an esports team. That means every time you enter into a new match of your go-to esports title, you enter into a new ecosystem. Positions and roles are given, but the execution is always unique.
If any given actor struggles to perform, e.g. mid lane feeds, then the other actors need to try help that player so that everyone benefits again.
For example, let’s imagine an ecosystem as a League of Legends team. All of the actors in this micro-ecosystem — top laner, mid, jungle, ADC, support, coach— rely on each other to perform. Their actions affect the ecosystem (team) and they are affected by the actions of the others. If any given actor struggles to perform, e.g. mid lane feeds, then the other actors need to try help that player so that everyone benefits again, such as through lane swaps and ganks. If an actor continuously fails to perform and shows no signs of improvement, he or she is exchanged. A team (and ecosystem) is only as good as its weakest link.
That is also why ecosystems are oftentimes found to co-create value.
The study of business ecosystems is relatively new, academically. It’s only started to pick up over the last twenty-five years. I would argue that the most important success factors of any given biz ecosystem are:
  • Cooperation: This is what everything is built upon. Actors within the ecosystem need to cooperate, collaborate and communicate.
  • Transparency: If the workings of an ecosystem cannot be understood by an outsider, then there is likely something wrong. If the ecosystem is also not clear to its own actors, then it is poised to fail. All actors need to understand how they stand in relation to each other, and with whom they have to work most closely together in order to achieve long-term goals and ecosystem sustainability.
  • Decentralisation: There is not one actor with monopoly power over all other actors. Everyone has a stake, everyone has power, and everyone affects and is affected by the whole. There is, however, a certain caveat to decentralization as some ecosystems rely heavily on one actor to lead the network. Again, this is described by Iansiti and Levien as the ‘keystone actor’. Interestingly enough, Riot Games has managed to create somewhat of a monopoly ecosystem, wherein they hold the majority of the power (arguably even more so than a keystone actor should). While in the beginning, this structure has helped Riot to ensure high production quality and professional-like competitive structures, now the monopolistic-power has increasingly become a focus for critiques.
  • Flexibility: If the actors within the ecosystem cannot adapt quickly enough to changes in the environment, then the entire ecosystem will fail. That doesn’t mean an entire industry would simply crash and burn, but it would mean that specific actors will be driven out of the ecosystem to make room for more effective ones to take their place.
  • Efficiency: This one is simple. If the ecosystem doesn’t work efficiently it will not be sustainable in the long-run. If you win rounds in CS:GO but constantly lose the majority of your rifles and utility in the process, you will hit the bricks sooner or later. And we’ve all been there in Overwatch: You win a teamfight, but you burned 6 ultimates. Guess what? you will probably lose your next fight. Be more efficient. Communicate and cooperate!

Part 3: A (Quick) Academic Look at the Esports Ecosystem

Sponsorships, distribution channels, casters, prize pools have made a gigantic leap in professionalism…
Amongst industry academics and practitioners alike, it is the general consensus that the esports ecosystem is still in its infancy (Brockmann 2011Taylor 2012Hollist 2015Zarrabi and Jerkrot 2016).
One of the most comprehensive works on value creation within esports originates from two Masters students at the Chalmers University of Technology in Sweden. Shahin Adl Zarrabi and Henrik Nel Jerkrot (2016) identified the lack of regulations and standardization across tournaments, unclear boundaries of actors, as well as the ambiguous competitive landscape as some of the most obvious indicators for an underdeveloped industry.
…Governing bodies, player support structures, and amateur and semi-pro scene support, however, have fallen behind.
Some aspects of the esports ecosystem have developed much faster than others. Sponsorships, distribution channels, casters, prize pools — these have made a gigantic leap in professionalism (and simply growth) in recent years. Governing bodies, player support structures, and amateur and semi-pro scene support, however, have fallen behind.
It looks like the classical build-up of a speculative bubble. What’s visible to the outside (e.g. casters, prize pools, sponsorships) has improved drastically. It leads us, viewers, to assume that what looks professional must be built on a sound structure, but that’s not necessarily so.
Below is an illustration of a simplified esports ecosystem, created by João de Carvalho in his Master dissertation from 2015:
Hein’s esports relationship framework
Hein’s (2012) esports relationship framework as found in Carvalho (2015)
While simplistic, the illustration does highlight that the key actors within the esports ecosystem co-create value, not only for the end-consumer (the audience on the far right side) but also for each other (Lusch et al. 2010Seo 2013Saren et al. 2013Zarrabi and Jerkrot 2016).
What has not been fully integrated into this framework is the development of organizations that look to standardize and regulate the competitive environment (e.g. WESAEsports Integrity Coalition). This may be due to the fact that these organizations are quite new and it is still difficult to estimate the impact that they can actually have on day to day esports operations. Not only that, but the very structures of some of these organizations have fallen under criticism, such as when players belonging to the Professional Esports Association spoke out against league exclusivity concerns.

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