The Most Important Issues in the Esports Industry

As an emerging sector, the esports industry does not yet have a unified source of governance. Instead, the main parties providing governance are the games publishers themselves, each only governing the esports scene of their respective games.

This role is completely unchallenged in the industry as they have the most legitimacy to fulfil the role of governing authority. This is completely based on input legitimacy gained by being the owners of the intellectual property that is a game, and not on the outcomes of their governance. The quality of the governance provided is thus irrelevant.

This is very different from the bodies that govern traditional sports. Even often criticized global sports organizations like FIFA see a decrease in legitimacy when they are perceived to do a poor job governing the sport, and the organization must then act in order to preserve credibility. This could be seen in the aftermath of the corruption scandal surrounding the choice to host a world championship in Qatar. A traditional GSO that has this pressure to a much larger degree than FIFA is the FIA. The FIA was originally founded in order to increase the safety of motorsports, and this is still one of its main goals (FIA, 2017; FIA, 2016, p. 3). What can be seen after many serious accidents in motorsport classes associated with the FIA, is that they investigate and see how a that type of accident can be prevented in the future. If regulations pushed by the FIA were to make the sport more dangerous, they would quickly lose their legitimacy, whether the national car federations that make up the FIA’s members would leave or not. As seen with the introduction of the ‘Halo’ driver defense system into Formula 1, the FIA will push through safety devices they deem important, even if they are unpopular with fans and teams (Barretto & Rencken, 2017).

Another important difference between traditional sports GSOs and games publishers is that the latter’s primary form of business is not esSports. While the raison d’être of traditional GSOs is to govern a sport, games publishers are businesses aimed at selling video games and have often existed for much longer than a given esport has. Esports is also not the main source of revenue for publishers. Rather, costs associated with it are often part of their marketing budget. The largest games publishers, such as Valve, Activision Blizzard and Riot Games each make much more money than the total revenue of the esports industry combined.

This difference does not necessarily mean publishers would do a worse job than a traditional GSO. It does mean that publishers have fundamentally different interests than organizations whose primary form of income stems from the esports industry. The ramification of this difference is that policy adopted by games publishers can be bad for the sport but be good for the publishers’ core business. While some traditional GSOs are accused of pushing policy that is only good for their organization, ultimately, they need the sport and relationships with partners in the sport. Publishers do not.

On top of the current source of governance being problematic, the esports industry has two other significant issues. These are the absence of regulations for competitive integrity and the lack of regulations and policy about a duty of care towards players.

Competitive integrity regulations consist of all rules that ensure a level playing field, ensuring the better team of players wins a competition. Breaches of competitive integrity are among the most heavily punished infractions in traditional sports. On top of that, GSOs, like the International Olympic Committee work together with law enforcement agencies like Interpol to ensure the integrity of the sport. Since violations of competitive integrity, such as match-fixing, are often linked to criminal networks this cooperation is very important. (Interpol, 2017).

One of the most glaring examples of the absence of competitive integrity rules, is the shortcoming of comprehensive gambling regulations. Since many esports businesses are active across multiple games, regulations are required on a supra-game level. Currently, even the existence of rules differs per game. Riot Games, the publisher behind League of Legends (LoL), has forbidden betting on any LoL matches for all professional players. This is relatively easy for Riot as they control almost the entire esports side of the game. This is not possible for all esports however, since not all publishers take this more controlling approach to e-Sports. Valve, the developer behind Counterstrike: Global Offensive (CSGO) and Defence of The Ancients 2 (DOTA2) is far less involved with the esports side of the respective games. After a match-fixing scandal in CSGO in 2015, Valve made it very clear that they strongly frown upon betting by esports insiders in their games. Nevertheless, Valve has sometimes failed to translate their beliefs into action, even at their own tournaments. At the end of 2016 at the ‘Boston Major’ DOTA2 tournament, an Analyst for the team ‘Ad Finem’ had placed bets on the outcomes of some matches. While this caused public outcry, Valve made no efforts to respond to the criticism. On top of that, ‘Ad Finem’’s manager stated that the team will continue to work with the analyst (Myers, 2017). Valve’s failure to act upon this violation during their own tournament makes it seem unlikely the company will be a positive, proactive force for competitive integrity, as the majority of e-Sports tournaments for Valve games are not organized by Valve.

Another aspect of esports that can potentially harm competitive integrity is multi-team ownership. In many esports this is allowed, with the exception being League of Legends, in which Riot Games forbade it (Riot Games, 2015, p. 12). Some teams that are exclusive to CSGO, Astralis, Godsent, Heroic and Norse are all owned by the company RFRSH (Lewis, 2017b). Natus Vincere and Virtus pro are teams that operate in multiple games but also have the same owner, namely Esforce (Lewis, 2016a).

Something else for which barely any policy exists is player protection. Many esports players are very young, and thus in a more vulnerable position (Winkie, 2015). Now that the norm in esports seems to be that people quit their jobs and studies in order to focus more on the game, this vulnerability increases. A prominent example of this is Jake ‘Stewie2K’ Yip, who was very open about ruining his school career in order to practice more (Yip, 2017). The prevalence of team houses in esports makes players even more vulnerable. Team houses are often seen as invaluable for both practice and team bonding (ESL, 2014). However, this leaves already vulnerable players in a position where teams control the salary and the living facilities (Lewis & Stemler, 2016). In this environment, players are left open for potential abuse. This abuse is not just abuse by the teams towards the players, which can manifest in pressure for unreasonable working hours or to accept lower salaries. Players are also at a risk of being abused by fellow players and coaches in many different ways. This could include sexual abuse. Without proper control and a centralized, anonymous, reporting mechanism, it is extremely hard to prevent abuse.