First published in The Stanford Daily.
Just over a week ago, history was made when a team of five young Chinese men left Seattle with $5 million in winnings. The game they were playing was not poker but “Dota 2,” a multiplayer online game made by the Bellevue-based gaming company Valve. This year’s annual “Dota 2” Internationals tournament, the fourth one since its creation, presented the largest prize pool ever seen in professional gaming – a total of $10.9 million. ESPN covered the matches and it seemed like every media outlet was trying to get in on the story, if only as a human interest piece. There is a sense that we are entering new uncharted territories.
Since the early 2000s, much has been written and said about the slow but steady rise of professional video gaming. What happened this month at Seattle is a coming-of-age story that we are all familiar with, but it is also so much more. A confluence of factors had brought the 2014 “Dota 2” Internationals into the mainstream consciousness and they represent an interesting microcosm of the technological forces that are shaping our future, gaming and otherwise.
Kickstarter brought the idea of crowdfunding into our daily lives, but Valve made it addictive with “Dota 2.” Unlike past video gaming tournaments that relied solely on sponsorships for prize money, which were often the first thing on the chopping boards when it came to corporate budget cuts, the Internationals were almost entirely crowd-funded via in-game item purchases by online players. In the weeks leading up to the event, fans could purchase tournament-related in-game items to contribute to the prize pool and to eventually earn vanity visual effects that they could show off in-game on their characters. And just like a Kickstarter campaign, there was a counter tracking the amount raised, with final rewards that fans earn determined by the final total – think Kickstarter fundraising goals. For example, the reward for hitting $3.5 million this time was access to special chat emoticons. In this way, much like purchasing swag at an indie concert, fans feel not only contribute to the prize pool but feel like they get something back in return.
So, fans pay both to support the goal of having a more exciting tournament with bigger stakes and to gain personal items, Valve takes a cut as profits and professional Dota players get to make a career out of their passion. As Michael Scott once said, this is a win-win-win outcome. The final prize pool of $10.9 million was more than three times that of last year. To put that into perspective, the second placing team this year won more money than last year’s winning team. That’s a growth rate that would make Bernie Madoff jealous.
The successful use of crowdfunding by Valve is a great example of the value of crowdfunding as a whole. The reason why corporate sponsorships have historically been unreliable is because they are a poor indirect proxy for consumer demand. Much like the homemade gadgets that find their audience on Kickstarter, Valve is tapping into an underserved demand by getting the consumers to directly pay for the cost of production.
The other major force behind the modern “Dota 2” juggernaut is live game streaming. YouTube brought us video sharing and Netflix brought us the Internet’s take on cable TV, but online gaming is helping to turn a very different form of visual entertainment into its own industry. Just like the Super Bowl, we now have the huge events that draw millions of viewers in the likes of the Internationals. But beyond that familiar format, there is also a burgeoning cottage industry of individual gamers who stream their gaming sessions live online and make money off of advertising and product placements. A popular full-time game streamer can take home a six-digit income doing what his parents say will never amount to much, probably right in their basement.
The prevalence of game streaming has created the interesting situation in which many fans of popular online games seldom ever actually feel the need to play them, because watching is so much less stressful, less time-consuming, and more readily accessible. In some sense, “Dota 2,” a game notorious for its complex game mechanics, can probably thank the rise of stream watching for the success of its annual championship events, because let’s face it: If every sports fan had to be able to play the game in order to understand and enjoy watching it, then college football would be bankrupt. With the professionalization of online gaming that parallels the paths taken by its traditional counterparts, it is no wonder Google recently decided to fork out a cool billion dollars to acquire the major game streaming site Twitch.tv.
The point is that online gaming is going to be a big deal. And it is a big deal not just because video game is becoming big money, but because its rise is symbolic of the same technological shifts that are changing all other aspects of our lives.
The future is already here in South Korea, where professional “Starcraft” gamers are literally national celebrities. Significant milestones like the recent “Dota 2” Internationals suggest that the U.S. is on its way there. Watching the live stream of the Internationals with its extremely professional production value, the seasoned commentators throwing team and player stats at each other and the incredible amount of skill and concentration exhibited by the competitors, an alien visitor from Alpha Centauri would be hard-pressed to say what exactly differentiates “Dota 2” from sports. (I suppose there has not been any accusation of steroid abuse. Yet.)
That said, it is not all rainbows and unicorns. There is a general feeling that this year’s matches at the Internationals have not been as exciting and eventful as last year’s. Perhaps the unprecedented prize pool this year was causing players to be more risk-averse, leading to fewer clutch plays and comebacks from behind. Both of the teams in the final were also Chinese, who are known for being more methodological both in play style and training processes. The old fan favorite Na’Vi, the Eastern European past championship winners known for their dramatic comebacks and eccentric play styles, did not manage to get into the final four this year. Still, even if “Dota 2” does falter, it has already pushed the boundaries for professional gaming and paved the way for the future.
Watch out NFL, America’s sport is about to change.