Crowdsourcing esports into a new era

This article was originally published on GameSpot's sister site onGamers.com, which was dedicated to esports coverage.

Crowdsourcing is a relatively new phenomenon, and even newer to the esports industry. It was only recently that websites such as Kickstarter and Indiegogo sprang up offering creators a medium to receive funding from the public. Over the past three years, the idea of crowdsourcing has become a popular topic, especially when it comes to new tech ideas. Within eSports, crowdsourcing has taken a little longer to catch on. However, in the past year and a half, we have seen a number of successful and unsuccessful projects surface.

But before we get too far ahead of ourselves, what is crowdsourcing exactly?

Crowdsourcing is a concept that allows would-be entrepreneurs to find alternative investment sources for their brainchild. Instead of being limited to finding traditional investors who have faith in their idea, creators can present their case to the public and, if deemed worthy, the public will fund it themselves. The most common approach is to use websites like the aforementioned Kickstarter or Indiegogo. They facilitate the process where a creator can present their idea to "backers," essentially investors, in hopes of reaching a predestined goal. The target set by the creators is public so existing and potential backers alike can track the progress of projects they are interested in supporting.

When a project is posted with its funding goal, it also comes along with varying incentives and corresponding donation amounts. Based on the amount a backer donates to a project, they receive the corresponding reward. This usually means a first edition of the product itself and maybe a few bonuses such as a t-Shirt or credit on a website. This way as a backer, your money gives some tangible return later on down the line instead of just a goodwill feeling.

This new way of securing funding for more out of the box ideas and projects has caught on in many areas of interest. Most notably, in technology and the arts. Many indie filmmakers, artists and musicians have had their projects funded, such as Olivier Green. Olivier is a fashion designer who got his first break on the hit television show, Project Runway. He and countless others looked to their end consumers for support in their endeavors and published their projects on kickstarter. A few weeks later Olivier secured his funding and developed his A/W 2012/2013 collection.

Transition to the esports industry and we have successful crowdsourcing projects such as Cyber Sports Networks' QuakeCon 2012 BYOC LIVE Stream Experience Kickstarter. The group from Dallas, Texas asked for more than $4,000 USD in order to setup their project successfully at QuakeCon 2012. Over 179 backers came together to pledge $4,601, successfully funding the kickstarter project.

Another recent crowdsourcing success story from the esports industry comes from the Starcraft 2 community by the folks at ROOT Gaming. ROOT Gaming, a professional gaming team from North America went to the community in hopes of them helping fund their team house. Their goal, an ambitious one, was set at $25,000 USD. Although looking to fund their project through crowdsourcing, they did not choose to use a traditional model such as kickstarter or indiegogo. Instead they decided to run everything themselves, organizing all of the funds through PayPal. Despite using a different payment method to facilitate the funding of their team house, the rest of their project was similar to those mentioned earlier. They offered incentives for backers, and displayed a live status of funds earned towards their goal. Adding to this, they also ran a 24-hour stream in order to spark interest, and engage their hopeful backers and entice them into supporting their project.

ROOT Gaming would see their target funded and then some as they received over $30,000 USD in donations.

And most recently, we saw the DotA community rally behind BeyondTheSummit and their Indiegogo project. Having had a successful run as community commentators, they knew they could follow through with their passions and take BeyondTheSummit to the next level by creating a studio. Their only major hurdle was securing the funds to do so.

"We don't have a 'sales team' like most gaming organizations do. LD and myself were casting continually and investing the time needed to sell advertising to sponsors would have hurt our content. Additionally, we don't have the expertise nor the credibility necessarily to have done this reliably. We knew what could come from a studio, but I don't think sponsors would have likely taken a leap of faith on our dreams."

David 'GoDZ' Parker of BeyondTheSummit

So they turned to the community. They put together a video telling their story and outlining their goals, and launched their indiegogo campaign in order to secure the $25,000 USD they estimated they would need to get their studio running. With one of the most supportive and generous communities in gaming supporting them, David and his friends in BTS were able to secure over $39,000 USD. And as you know, the rest is history.

But crowdsourcing is not as easy it sounds. Ask Patrick 'chobopeon' O'Neill, as he found out first hand last year when his kickstarter project "The eSports Reporter" failed to secure funding. An interesting project, Patrick proposed a journalistic web series in esports. The purpose was to secure funds to pursue unbiased independent journalism within the esports industry full time. His project saw 40 backers putting up $2,422 USD, but in the end, he failed to reach his projected goal of $6,000 USD. Not every project is destined to secure adequate funding. Some do not have enough promotion behind them, others do not portray the project in the best or most illuminating light. Others are just bad ideas.

Patrick commented on why he thought his kickstarter project failed to be funded:

"It was poorly thought out, poorly executed and poorly received. Presentation was a big problem. I put out a poor Kickstarter and didn't do well in explaining what it was about. The video was shoddy and cheesy and the rest of the presentation -- writing etc -- was paper thin. The idea behind it was, in general, a fine idea I still think -- the idea of a totally independent news magazine video series could be very good if the right person/people did it. But I didn't come anywhere close to doing it justice."

Although not always a guaranteed venture, crowdsourcing does offer many benefits for a juvenile industry such as esports. For instance the ability to directly engage and interact with the end consumer. By pitching their idea to the people who will ultimately become the consumer, creators allow them to vote with their wallets as to whether or not the venture is a good idea. This acts as a good indicator of how well the product or idea will be received en masse. The feedback from these early-adopter consumers is also valuable to product development, marketing and customer service needs. Additionally, if it is well received by early-adopters, chances are these people are opinion leaders to their peers, which would help with marketing down the road.

Crowdsourcing also offers an ideal solution for securing funding for a project in esports. It is extremely difficult to convince investors or sponsors to support a new idea within the esports industry without a developed product already entrenched in the marketplace. By appealing to the community directly, and offering them incentives if they invest in the project in order to get it off the ground, you kill two birds with one stone. You secure the funding, and you gain a consumer base all in one fell swoop.

Should the project fail to secure funding, you as the project creator will not have lost as much money, and you will know what to fix, or whether you should scrap the idea altogether. You will also have no ties to investors or sponsors. As the project creator, you have control over what is said and done, and do not have to spend time on extra initiatives to satisfy any controlling partners. Pressure from investors for a return on their investment will also be eliminated, your only responsibility being to your end consumer, who you are trying to satisfy in the first place.

The esports industry also has a fairly unique community that drives it. When the fans get behind an idea and support it, they usually exert enough power to make or break that project or idea. So if you cater to your fans, and create an idea that they support, despite it not necessarily creating a lot of financial reward, chances are the esports community will support it and make it happen. This is one of the key concepts of crowdsourcing platforms such as kickstarter and indiegogo. They enable likeminded individuals to come together and support projects they are passionate about and want to see happen. And what community is more passionate and involved than the esports community?

VALVE proved that at least the DotA community is incredibly passionate and supportive of one another. With the compendium, VALVE offered community members the opportunity to support The International 3 and the teams involved by allowing them to crowdfund an addition to the prize pool. By purchasing the $9.99 USD compendium, you receive in game features and incentives as well as additional tournament insight and content. With every purchase, 25% ($2.50) is added to the overall prize pool which started at $1.6 million. Through the compendium purchases, VALVE - or rather the community - had added a staggering $1,200,000 USD to the prize pool.

Through the rest of the money from the compendium purchases, VALVE has earned an additional $4,800,000 USD. This essentially means that the DotA community has paid for the entirety of The International 3 prize pool and a chunk - if not all - of the production and administrative costs associated with the tournament. VALVE successfully utilized crowdsourcing in order to finance the largest esports tournament in history.

However, not everything is sunshine and daisies in the realm of crowdsourcing. The 2,206 backers of ZionEyez (now Zeyez) can tell you that first hand. Zeyez was an overly ambitious company that boasted they could make a pair of glasses into a state of the art live streaming and capture device - in HD no less. Very ambitious indeed, and for only $199 - what a steal! Or so the backers thought. The Zeyez kickstarter campaign began in June 2011 and secured $343,415 in funding from their backers, a far cry from the minuscule $55,000 they were asking for. Time passed, and backers waited and waited and waited some more. After months had passed, Zeyez had yet to deliver a single pair of glasses. More time passed and backers became restless, but Zeyez would not deliver. Two years later and Zeyez has yet to follow through on their original promises.

Zeyez are not the only creators to have failed their backers. Projects such as Vere Sandals and the Haunts video game have also failed to make good on their promises. Crowdsourcing horror stories are not as uncommon as one might think.

Buyers beware: you do not always get what you pay for. Just like a traditional investor, as a backer you are investing your money in a company. There are no guarantees. You give a project creator money in hopes that they will succeed in developing and implementing their idea. In addition, you expect to get something out of the exchange, much like a traditional investor would hope for dividends. Nevertheless, as not every company succeeds, not all crowdsourced projects do either.

Project creators can run into any number of unforeseen difficulties and roadblocks. After all, no one is perfect, even seasoned businesspersons have failed ventures, it happens. That said a creator is legally required to fulfill their promises to backers. For instance, if you backed a project and you were promised three distinct rewards for your contribution, a project creator is legally responsible to send you your rewards or a refund of some kind. However, the platforms themselves cannot force a refund, so you as a backer are left to your own devices to try and exact retribution.

This is an issue, especially within the esports industry with such a haunted past. Unscrupulous characters have swindled players, leagues, organizations, etc, out of money in the past. It is unfortunate, but not all that unexpected when the industry is so new and operates mostly through the effort of young uneducated and inexperienced individuals. Crowdsourcing would be a very lucrative method to siphon funds from the esports community and swiftly disappear into the shadows.

Another minor problem that might hinder the overall success of crowdsourcing in esports is the fans themselves. Unfortunately, the majority of esports most enthusiastic fans are still quite young, ranging from 12-22 years of age. As a result, they are either too young to work, are in school and have debt, or are facing high unemployment rates. This leaves their buying power wanting. All businesses face this problem in esports as they compete for the already scarce fan-dollars. Securing multiple thousands of dollars for a new project is far from easy.

Still, crowdsourcing seems like a brilliant opportunity for the world of would-be entrepreneurs in esports with a bright idea or two. Many of the problems above can be solved by a vigilant community that does their research on those they are supporting. By spending what little money they do have as wisely as they can, esports fans can support the projects they truly care about and help them get off the ground.

So far, we have seen a small number of crowdsourcing projects in esports, but the ones that seem to catch public attention usually do well to meet and succeed their initial goals. Additionally, the number of these projects seems to have increased suddenly over the past year. With many passionate and creative people in the esports industry around the world, crowdsourcing projects will increase in number over time. The quality of these projects remains to be seen, but with esports continuously evolving and expanding, there will be no shortage of ideas surfacing.

Whatever the result, crowdsourcing will play a key role in helping the industry evolve and develop over time. This new way of securing funds and allowing creators to manage their projects the way they see fit, instead of being tied to controlling investors, could push esports into a new and exciting era.

Photo Credit: CSN, SCDota