Will Esports for Bits–Why Blizzard Chose This Weird Crowdfunding Model



Earlier this week, Blizzard and Twitch announced a unique partnership that would allow HGC fans to support their favorite teams and earn in-game rewards by cheering for teams with Twitch’s bits system. The announcement was met with mixed responses. Many were excited to have any chance to support their favorite teams. Others were disappointed that their support had to come through a system surrounding something many people dislike or ignore entirely–Twitch chat.

We had a pretty good discussion about this process when I guested on Trollin HGC this week, but there wasn’t really time to go super in depth about why I think Blizzard went this route, and why many suggestions to “fix” this model have unexpected problems. Let’s dive a bit deeper into crowd-supported esports models today!

Why Not Boost the Prize Pool?

One of the most common reactions I saw to the announcement was this exact question. This is the exact process used for DOTA’s The International and they get insane money put into their prize pool. Why can’t we just buy an “HGC skin” that puts a percentage of the cost into the prize pool for clashes, the mid-season brawl, or Blizzcon?

The issue here depends entirely on your goal with crowdfunded support. Big prize pools look really cool. They get the interest of news outlets, make for a clear “interest draw” for casual observers, and make the victory at the end of a tough tournament feel that much more significant. If your goal is to just boost viewership and interest in your biggest tournaments, this is absolutely the best way to do it.

Everyone points to The International as this pillar of how to do crowdfunding right. It really has worked, but only for The International. Feeding money into the biggest tournament in DOTA has increased viewership and awareness of this one specific tournament, but it’s also really the only tournament anyone cares about. Taking a quick look at major news outlets, you’ll rarely see DOTA news unless it directly relates to The International. If a team fails to qualify for The International, there’s very little opportunity for them to build any sort of fanbase or sustainability in the DOTA scene with casual fans.

This is the same problem you’ll find if we used this model in Heroes. Only the very best teams qualify for international events in HOTS. In most cases, these are also the teams that already have sponsors, salaries, stream followers, etc. If all of our crowdfunding went to feed the Blizzcon prize pool, we’d only really be supporting the successful teams. You wouldn’t even see much extra support for the wildcard teams because the payouts for last place are so much lower (oh snap!). A scrappy little team like Naventic or Zealots would probably never see a cent from the community’s support.

Now, you could absolutely argue that Blizzard could do their current weird bit-thingy and then also release a “championship skin” that feeds the prize pool for big events. That way we’re supporting the scrappy underdogs while also getting that big boost from a huge prize pool. The issue here is that esports aren’t actually a charity run by gaming companies. In most cases, like Heroes, they’re a marketing tool that helps keep top players and influencers playing and talking about the game. Blizzard is already shelling out big bucks for their prize pools and providing every player with a salary. At a certain point they have to be able to get a return on this huge investment.

It’s simple economics. Your players only have so much capital available to spend on in-game cosmetics. If they spend all of that capital on cosmetics that give a portion of the profit away to esports teams, you as a company earn less revenue overall. It just doesn’t make great business sense to provide a bunch of ways for your player base to give you less of their money when the return in retention/marketing won’t be that much greater. A 2 million dollar prize pool doesn’t give you that much more news coverage than a million dollar prize pool.

Why Through Twitch?

So, prize pool support is cool but it doesn’t make your league more sustainable. Doing prize pool support alongside other methods would be cool, but doesn’t make much economic sense. Even so, Blizzard could still just put some Fnatic skins in the game and let me buy them directly through the game! This is absolutely a path Blizzard could choose to go, and I genuinely believe they will in the future.

However, right now there’s a key problem that make this plan less than ideal. The HGC is still insanely volatile. Teams disband, change brands, or get relegated every season. At any moment Superstars could be sponsored by Burrito Esports, and all of their in-game assets immediately become obsolete. Now Blizzard has to make a bunch of Burrito-branded assets, when suddenly Erho and Srey have a big fight about which episode of Dragonball Super is the best and the team disbands. Because of the way the HGC roster rules work, Burrito Esports loses their spot to Crappy Open Division Team and now all those Burrito assets are worthless. Before you ask, yes–Burrito Esports is a thing.

Now, this is already a problem that can and will happen with the current Twitch-integrated system. However, there is a key difference–it won’t clunk up the in-game store. Blizzard cares deeply about streamlining their presentation to newer players. It’s one of the reasons they don’t want to add more buttons to Hearthstone (that and the fact that the game’s engine is made from two guinea pigs duct-taped to a toaster oven). This constant overhaul of in-game assets would mean having to constantly tweak the store. Because people are making purchases directly from Blizzard in this case, you’d also likely see people demanding that their Superstars merch be transformed into Burrito swag. I know I would, have you seen the Burrito logo? It’s dope as heck. Ultimately, using Twitch’s system allows Blizzard to keep their in-game store clean while the HGC teams figure out all their many branding and stability issues. They also get to pass off much of the headache of data collection and management onto Twitch’s system.

Games Make Spending Fun!

Go back and read the official Blizzard announcement for this program. Notice all the words used like “unlock”, “goal”, and “progress”. Blizzard isn’t just providing a way to support HGC teams, they’re turning it into a game. Gamification is a huge trend in marketing today. To many people it’s frustrating, needlessly complex, and a complete turn-off. To others, it makes spending fun, makes the purchase feel more valuable, and encourages customers to remain loyal, frequent spenders. It’s really a fascinating marketing experiment. They’re attempting to encourage both spending and Twitch viewership by letting you play a unique buying game while you watch.

In summary, like we said on Wednesday’s show, this program is not ideal for everyone. I find bits and other pseudo-currencies needlessly complex, and I can’t stand Twitch chat. For people like me, this is a clunky, unappealing method of supporting my favorite teams. However, I understand why Blizzard chose to experiment with this program. At the end of the day, any way to support the HGC is a good thing. Hopefully, this is just the first step. As we see the HGC start to settle, as more teams are picked up by relevant organizations, I fully expect that we will see new and varied ways of supporting our favorite HGC teams. Until then, I remain optimistic, and choose to look at this program for what I hope it is–an interesting first step.


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