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The Boom-Or-Bust eSports Format Works For Developers But Screws the Athletes

The dirty secret of the esports industry is how so many players' livelihoods depends on one competition a year.

by Luke Winkie
Sep 1 2016, 12:55pm

Image via YouTube

James "Clayster" Eubanks has played Call of Duty competitively since 2007. A quick look at his revenue proves exactly how unprofitable that can be.

He made $12,500 in 2011, then $36,000 in 2012, then just about $38,000 in 2014. You could practice every day, travel to every event, refine intricate strategies, even win a couple tournaments, and still make about as much money as someone who manages a bookstore.

As a general rule, this is par for the course. Games like League of Legends are popular enough to merit concrete federations with standards and regulations for salaries, but in Call of Duty—which doesn't have nearly the same professional following, despite its gargantuan franchise revenues—players struggle for every inch, and cent. Most Call of Duty competitions pay out middling first place prize pools in the $50,000 range. Divide that between four players, and you're looking at a $12,500 cut. It's not bad, but certainly not great considering all the hard work it takes to get there.

Read More: Esports' History And Trajectory Can Be Told By The Rules It's Broken

There is one great exception to this, though. That is the annual Call of Duty World Championship, run by the game's publisher Activision. It comes with a million dollar prize pool; the team that finishes first earns $400,000.

"[The Call of Duty World Championship] is the one that every Call of Duty team plays for, it's the one every team saves strategies for, it's the one teams put in the most practice for," Clayster says. "Even if you win every other tournament in the year, if someone else wins the World Championship they'll have more total earnings. This gives an insane amount of stress and pressure to perform."

Clayster's team, Denial Esports, were among the 32 teams in the 2015 Call of Duty World Championship. He and the rest of his Denial teammates played exceptionally well through qualifying rounds, and were the two seed in the entire tournament. They breezed through group play and dominated the winner's bracket, securing a spot in the Grand Finals against the formidable Team Revenge. After 90 grueling minutes, Clayster and the rest of Denial defused a bomb in game five, round 10, to win the series and the title 3-2.

In that moment, Clayster made more prize money than he'd earned throughout his entire esports career. It made for compelling drama—seven years of work redeemed in just one weekend. It's also unfair in ways that punish athletes like Clayster while rewarding developers like Activision.

The Halo franchise is one of many that boast massive franchise revenues but small esports prize pools. Photo by Jasen Vinlove-USA TODAY Sports.

This phenomenon extends well beyond Call of Duty. Esports in 2016 is a highly condensed industry. Dozens of major publishers want a piece of the pie, and self-funding their own insular tournaments is the easiest way to claim a slice. Bigger cash prizes mean more exposure, which in turn means more competitive players—and, somewhere downstream, maybe even more casual ones, too. For developers, this is the model that works best.

"We've had talks of breaking it up into four separate $250,000 events but Activision loves the prestige and all the limelight that falls around the one event," says Clayster. "So it's doubtful we'll see a real solution."

It's easy to see why publishers would want to keep it that way. Despite esports' exploding revenues, the deck is overwhelmingly stacked against players—the backbone of the industry—making a decent living playing the games to which they've devoted so many hours. Each year brings one opportunity to do so, but that sole big-money tournament also attracts the absolute best talent in the world. It's like if The Masters constituted 90 percent of all the money in golf.

"Your livelihood really depends on one event," says the 23-year old Carlos "Cratos" Ayala, a Halo pro who came in second at that game's world championship earlier this year. "It adds a ton of stress. You think about it every single day."

Cratos made $125,000 at that tournament. In all of 2015 he made $250.

"At the event I was aware of the prize jumps from round to round, and when we almost got knocked out [it felt like] my life was almost over," he says. "I poured my heart out to come back from two games to zero [down] to win, and the prize jump was so huge after the series I literally broke down and cried in front of all my friends there supporting me. It's not all about the money, but you are aware of how your life can change because of a match."

The problems are hardly over for those select few whose lives do change. There's already an entire cottage industry dedicated to preventing athletes from going broke, but the risks are perhaps more magnified in esports. There are guaranteed contracts in traditional sports, after all; a five-year deal is a five-year deal. There's no certainty that an esports player will win a world championship again, which means there's no certainty they'll make a decent living again. Those aren't the only revenue streams—players are paid a salary by their teams, and they can earn extra cash from streaming and sponsorships. Still, unsustainable and unpredictable as it is, prize money is esports' sole big ticket. Because it arrives in sudden, life-changing circumstances, many esports players have no idea whatsoever how to process receiving it.

"A lot of younger kids make mistakes of blowing their money as soon as they get it." Clayster says. "I know in college, when I was living paycheck to paycheck, I had that temptation as well. 'Won $5,000 from a tournament? Looks like me and the boys are having fun this month!'"

Clayster, now 24, eventually wised up. He still carves out five percent of his winnings for fun, but the rest goes into savings and investments. "When I finally got my check I instantly went to a financial advisor with it," says Clayster, who wants to go into real estate when his playing career is over. "I'm still relatively young so I was certain I had to hire a professional to help me manage my funds... My biggest fear is how volatile esports is. Knowing any day could be my last is what makes me so mindful of my finances and my accounts. I need to make sure I set myself and my future kids up for a healthy lifestyle."

Not everyone has that luxury, though. Just one year ago, Derek "DunkTrain" Arabian won the Heroes of the Storm world championship at Blizzcon. He took home a sizable $48,000 cut for his efforts.

"[It] essentially proved that I was a legitimate 'pro gamer,'" he says. "[It] was a sort of weight being lifted off of my shoulders, because this championship justified everything I put into the game. All the time spent practicing, not pursuing a 'real career' after college, negativity from people, it all just faded away for awhile."

But then his career fell apart almost as quickly as it came together. DunkTrain's team Cloud9 would play in a few more tournaments throughout 2016, but none offered close to the $200,000 figure at Blizzcon. By June, Cloud9 and several other notable Heroes pro teams like EDGgemini and G2esports had disbanded. Dunktrain had nothing to play for and no real place to land. Today, he's effectively retired. Only in esports can you go from world champion to retired and out of a job in six months.

"On top of the world last November, then the rapid fall to complete dissolution," he says. "Right now I pretty much consider [the prize money] my compensation for working from 2014 to 2016, and it's only thanks to the generosity of my parents that I was able to invest so much time making no capital at all before finally succeeding."

DunkTrain hasn't ruled out a return to esports, but readily admits that "it isn't realistic to expect another windfall like that." He purchased a new computer and desk after he won, then put the rest in his savings account. Right now, he doesn't have another source of sustainable income, which means his next task is to rejoin the workforce. "My current plan is to use the money to ease the transition into the next phase of my life, whatever that may be," he says. "I don't intend to waste it by sitting around siphoning from those winnings for any longer than necessary."

DunkTrain isn't negative about his experience. He made decent money and has enough stories for a lifetime. But he's also a victim of the perverse prevailing economics in the pro scene, in which the workforce props up an industry with broken compensation structures with no contingency plans for the fallout. It doesn't have to be that way, and it really shouldn't be. But developers are blessed with players willing to take the challenge, many of them determined to press on in spite of the long odds against ever making a reasonable living doing so.

"I want to play as long as I can," says Cratos, the 23-year-old Halo pro. "A lot of players lose their love for the game or they lose the drive. But for me all I have is Halo. This is my life. This is my talent. This is my future."