Mentioned in this article Games: Dota 2, League of Legends

Raising small to massive amounts of money from a vast audience has a strong history in esports. Developers and publishers are uniquely able to crowdfund their esports projects by creating in-game content, and even small event organizers can tap into grassroots support to build up prize-pools, support teams, and more. Going forward though, how can crowdfunding best be utilized in esports?

The TEO Podcast is an esports business discussion show, featuring a rotating panel of guests all working within and around the competitive gaming industry. Every episode we discuss the most game-changing developments and pressing issues facing the esports ecosystem.

Valuing the Heart of the Community



Crowdfunding in esports is usually associated with large numbers and bold headlines. Take the Dota 2 International: in 2013, where Valve introduced the digital “compendium,” a portion of which goes towards the championship purse. This practice helped balloon the 2014 iteration of the tournament from $1.2M in 2013, to $11M in 2014. In last year’s competition, the final tally was $24M, with all but $1.6M of that coming from Valve .

What often gets missed out of TI coverage by non-esports press is that Valve itself keeps 75% of the proceeds. Alexandre Noci—a chairman and producer of French esports broadcaster and competition organizer, O’Gaming —feels this is ultimately a good thing, given the developer’s commitment to their esports scene, and the heavy costs involved in tournament production and planning.

[perfectpullquote align=”right” cite=”” link=”” color=”” class=”” size=””]Alenxandre Noci, O’Gaming: “When a publisher opens its in-game items, they’re basically opening their community heart.”[/perfectpullquote]

“Basically, as long as the split is clearly communicated to the backer, then they know where their money is going, there is no issue,” he says. “Building in-game items, designing, and implementing it, does cost a lot of money. Yes it’s 75%, but it’s not just margin.”

Michael Pinkham, the chief marketing officer for Matcherino , a crowdfunding resource for esports organizers, naturally concurs, adding that eight-figure prizepools help move the needle for the esports industry as a whole. “Maybe, with the smaller ventures, if we’re talking very small grassroots, it would make sense for the prizepool to get more of a share,” he says. “If production costs aren’t so exorbitant that you’re not renting out Key Arena…but in this case, as Alex said, there’s a lot of cost that goes into making such a great event.”

Related Article: League of Legends Fans Have Doubled the World Championships prizepool to Nearly $4.6M

The reason for bringing speakers from Matcherino and O’Gaming specifically onto this episode was that both had worked together to drive up the prizepool for the recent Nation Wars V StarCraft II competition. This 32-national team showcase features exclusive in-game items for its fifth iteration, created by Blizzard Entertainment . Distributed through Matcherino, the assortment of portraits, emojis, and sprays delivered an additional $12K to the planned $50K cash prize.

While far from the millions that Valve or Riot Games can raise, opening up community resources for older or even upcoming esports should not be understated. “When a publisher opens its in-game items, they’re basically opening their community heart. That’s their jewel,” adds Alex.

How Do You Incentivize Fans to Crowdfund?



The history of online crowdfunding is littered with campaigns that were either horrendous failures or completely disingenuous. Likewise esports, in its early days, was also dogged by organizers who paid out prize money later than promised, or not at all. Michael candidly states that, two years ago, Blizzard would not likely have worked with a crowdfunding platform, without a proven track record behind it.

“One of the [Matcherino] founders, one day, was actually on a forum, and saw that the mechanics of grassroots tournaments were basically people on a forum saying ‘hey we want to see this showmatch, how do we do it?’ Someone would say trust me, send me the money on PayPal and I’ll make sure it gets to the right people.”

[perfectpullquote align=”left” cite=”” link=”” color=”” class=”” size=””] Michael Pinkham, Matcherino: “If it’s a weekly tournament, and the organizer needs to increase the prizepool or production funds, then people will rally behind that.” [/perfectpullquote]

To turn again to The International, Alex notes that Valve have consistently put on a top-notch tournament, with a super rich player and viewer experience. “Valve has a tradition of community base funding, and they’ve never disappointed in this regard,” he says. “It has legitimacy in this operation, and that’s why people invest in such large numbers.”

“The small and grassroots tournaments do need funding. There is not a TI every month…but it shouldn’t be mistaken with the big numbers, when we’re talking about crowdfunding.”

But what is it that ultimately motivates fans to go beyond showing support for a competition, beyond pure viewership? Michael cites the fighting game community (FGC) as a great example, where fans will boost a given prizepool largely for the sake of getting certain players to participate, or because they are already on the bill. Sometimes, he adds, it can be just for recognition.

“They just want their community to know they’ve pledged $1000 of their own money, towards their favourite community,” he explains. “This might be a little grim, but sometimes it’s very similar to donating to make sure your favourite radio station or TV show doesn’t get canceled. If it’s a weekly tournament, and the organizer needs to increase the prizepool or production funds, then people will rally behind that.”

Lastly, he adds, it can just be for the sake of buying a limited or rare item in a game. There are a number of reasons that compel a contribution. Like so much of esports, there is no one-size-fits-all in the industry.