AFK Weekly: A Rewind of Esports in 2021
As the esports industry takes a well deserved rest this week ahead of ushering in a brand new year of hope and promise, Vignesh Raghuram and I have decided that this week's edition of the newsletter would be the perfect stage to highlight what we believe are the biggest storylines of 2021. We hope you enjoy reading our thoughts on 2021 as much as we have enjoyed writing them!
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See you in 2022!
Live Events in the Shadow of COVID-19
2021 was supposed to be the year that live, in-person LAN events with full audiences returned in full force, and while there were some pretty amazing competitions this year that broke viewership records, there were more than just a few complications and unfortunate circumstances that made a full and triumphant return to normalcy almost impossible.
In June, Chinese League of Legends operator TJ Sports and Riot Games revealed details on a five-city tour for the 2021 League of Legends World Championships (Worlds 2021) in China, but as COVID-19 reared its ugly head in the country and complications related to travel restrictions into the country became apparent, the game maker was forced to relocate the competition series to Reykjavík, Iceland. While in-person LAN competition was possible, Riot was forced to exclude fans from being on-site to view the event. Despite the complications, viewership for the biggest LoL competition of the year broke records–Riot claimed more than 1B hours of content was watched across 34 streaming platforms worldwide during the competition.
Earlier in the year, Riot announced that the LCS playoffs would be hosted at the Prudential Center in Newark, New Jersey, but like Worlds, had to be moved to the LCS Arena in Los Angeles.
In July, Valve began making plans for the biggest competition of the year for Dota 2 esports, The International. The initial plan was to host the competition in Bucharest, Romania, in October in front of a live audience. Fans were excited to attend the event, as it had been indefinitely postponed in 2020 due to COVID-19. But just days before the event was to take place Valve halted ticket sales and announced that the competition would not feature a live studio audience this year due to local restrictions related to the pandemic. Ultimately, Russian esports organization Team Spirit won TI, taking home roughly $18.2M of the more than $40M total prize pool.
While TI and Worlds were adjusted to deal with changing conditions on the ground, some competitions were simply canceled:
Riot Games decided in November that instead of hosting this year's League of Legends All-Star event online again for a second year, it would cancel it altogether. The plan was to host a live in-person event in Iceland but travel restrictions and quarantine requirements would have made the three-day affair a logistical nightmare.
Garena pulled the trigger on canceling the Free Fire World Series 2021 in August, noting that the competition that was to be held in Mexico in November was simply too risky; at that time the country was going through its third wave of COVID-19 and had recorded tens of thousands of new cases.
Fighting game tournament competition the EVO 2021 Showcase was supposed to be a triumphant return to Las Vegas and the first in-person event since the league was acquired by Sony, but was canceled by organizers in September due to concerns about the Delta variant of COVID-19.
Finally, ESL Gaming’s DreamHack was forced to cancel two North American events–DreamHack Atlanta and DreamHack Anaheim in 2022. The events would have hosted multiple competitions related to CS:GO and Halo esports. The company said at the time that it would shift its focus to events such as DreamHack Dallas and DreamHack Summer in June.
These are just a few examples of how COVID-19 continued to be a challenge for esports stakeholders and organizers in 2021, but it wasn’t all doom and gloom: Events such as the Valorant VCT Champions, PGL Major Stockholm, HCS Kickoff Major Raleigh 2021,
PUBG Global Championship 2021, and Call of Duty League Finals were well received by fans and enjoyed record-breaking viewership numbers online. CDL, HCS, and many other events this year also managed to have live in-studio audiences and in-person competitions that gave both the industry and the community a glimpse of what a full and unfettered return to live events looked like. In a word, it was glorious.
Unfortunately, we live in a world where COVID-19 will continue to be an ongoing concern, so those involved in putting on events that have in-person audiences and competitors will have to learn how to do business without creating super spreader events that kill people. Several major events this year showed that it can be done with the right amount of care and safety. In 2022 we suspect (and hope) that stakeholders will take what they have learned this year and iterate accordingly.
2021: A Year of Reckoning for Activision Blizzard
If Charles Dickens wrote Activision Blizzard’s story for 2021, it would begin with “It was the worst of times, it was the worst of times.” No one could have predicted that a lawsuit from a California agency (the Department of Fair Employment and Housing) would open a floodgate of accusations of sexual harassment, gender discrimination, pay disparity, sexual assault, and more aimed at women working at various studios that make such hit games as World of Warcraft, Overwatch, Call of Duty, and many others.
More importantly, the lawsuit and subsequent investigations from federal agencies such as the U.S. Securities and Exchange Commission (SEC) and the U.S. Equal Employment Opportunity Commission saw loyal investors finally decide that the leadership at the biggest game publisher in the world–most notably CEO and Chairman Bobby Kotick–needs to be replaced because they turned a blind eye to what they knew was a toxic working environment where male employees and supervisors engaged in such behavior as stealing breast milk, hosting alcohol-fueled cubicle crawls on a regular basis and even running a suite to bring female employees to for inappropriate activities named after convicted sex offender and comedian Bill Cosby.
As more and more employees shared their experiences on social media–each story more horrific than the one before it–current employees became incensed and disgusted and began organizing large-scale walkouts and protests (with the latest protests–which have been going on strong for the last 17 days–focusing on Warzone QA testers that were fired earlier this month from Raven Software).
The fallout to Activision Blizzard has been devastating; in 2021 Activision Blizzard’s stock has dropped from a year-high of $104.03 to a year-low of $56.40 in December while experiencing a 26.76% decline over the last year; employees are seriously considering unionizing; and numerous lawsuits and investigations are in the works, with more likely waiting in the wings.
And while Activision Blizzard is front-and-center in all of this controversy, it is not alone; Riot Games is still dealing with lawsuits related to its own accusations (this week, the company agreed to pay $100M to settle its 2018 gender discrimination lawsuit, and many current and former Ubisoft employees have shared their own stories of toxic work environments for female employees. All of these horrible stories highlight a hidden culture of toxicity in the industry, rooted in the past and in dire need of reform.
NFTs, Crypto Invade Esports
In April of this year, Ford Models Esports & Gaming Talent Division Manager Justin M. Jacobson gave me a crash course in NFTs, or non-fungible tokens. Jacobson dove into the topic out of his own fascination with the topic, but also to understand how his clients’ NIL (name, image and likeness) rights might be affected in future contract negotiations. That conversation was precipitated by a number of esports organizations such as OG Esports, Natus Vincere (NAVI), Team Heretics, and people like Turner “Tfue” Tenney being early adopters and creating their own NFTs. Since April, NFTs are everywhere and everyone is talking about them ad nauseam, and while we are still in the early days of that technology, it’s pretty clear that NFTs are here to stay. Hopefully, NFTs will become more elaborate, interactive, and useful in 2022.
Like NFTs, cryptocurrency invaded esports in a major way, with big partnerships and sponsorships such as FTX signing a 10-year, $210M naming rights deal with TSM. Esports stakeholders like Riot Games are still trying to figure out the best way to handle these kinds of deals in the context of how they are or aren’t advertised during competitions, but the League of Legends and Valorant maker kind of muddied the waters when it signed a similar deal of its own with FTX for the LCS. While there were some incredibly big deals involving crypto currencies, there were also some notable issues with players from esports organizations such as FaZe Clan involved in pushing questionable crypto to unsuspecting fans in alleged “pump and dump schemes” as well.
Both cryptocurrency companies and NFTs found broader acceptance in the esports industry in 2021, and we suspect we will see even bigger deals in 2022, but one thing everyone can agree on: NFTs, the metaverse, blockchain, and crypto were the most hyped buzzwords of 2021.
Valorant showcases strengths of co-streaming
2021 also was the year where co-streaming became mainstream for premier esports tournaments. Although several tournament organizers (notably Valve with Dota 2) had allowed content creators to stream official event broadcasts, providing their own commentary in the past, Riot Games became the first to officially leverage this to significantly boost engagement and viewership with its Valorant Champions Tour (VCT).
The company officially partnered with the likes of Michael “shroud” Grzesiek and Kyedae Shymko to co-stream VCT events like the Masters and Champions. This move proved to pay major dividends with millions opting to watch these personalities over the slick, informative, analytical official broadcasts.
This wave of co-streams were especially crucial during the initial phases of the VCT to allow casual viewers to familiarize themselves with the game, converting them into Valorant esports loyalists which could in turn allow the title grow and gain a significant foothold in the FPS esports industry.
Moving forward, co-streaming could have a significant impact on sponsorship revenue for esports tournaments. Thanks to its nature, co-streaming can hamper ad placements which are a significant part of Riot’s official broadcasts and may dissuade the company’s monetization efforts. However, the increased viewership brought in by these streamers might be enough to retain sponsor interest and could even allow it to negotiate better deals.
In either case, Riot Games has indicated that co-streaming is certainly here to stay in Valorant esports. With Valve also requiring all Dota 2 tournament organizers to allow co-streaming as long as they meet certain non-monetary requirements, it looks like large scale adaptation across the industry can be expected in 2022.
FaZe Goes Public
One of the biggest stories of 2021 won’t come to fruition until early 2022: North American esports organization FaZe Clan announced plans to merge with B. Riley Principal 150 Merger Corp. to become a publicly-traded company on the NASDAQ through a business combination. The new entity, "FaZe Holdings Inc," will be traded under the stock ticker "FaZe" and will have what the company calls an "implied equity valuation of approximately $1B USD."
The Rise of Mobile Legends
2021 will go down as the year where Mobile Legends: Bang Bang (MLBB) cemented its place at the top of the mobile MOBA esports industry. Following a reported $4B acquisition by TikTok parent Bytedance, the company has expanded to new regions including Brazil, North America, and the Middle East/North Africa. It has also consolidated its presence in its strongholds, with MPL Indonesia S8 becoming the third most watched esports tournament in 2021 and MPL Philippines becoming a franchised league. 2022 is going to be yet another challenging year for the title with Wild Rift and a revitalized Arena of Valor breathing down its neck, but for now, MLBB reigns supreme.
On the horizon
2022 is already shaping up to be yet another exciting year for esports with the return of Halo esports to the forefront of the FPS scene. With a peak concurrent viewership of 250K for its debut with the Halo Championship Series 2021: Kickoff Major, the title already has significant momentum heading into the new year. If Microsoft plays this right, we could see the title compete against Valorant and CS:GO for that lucrative FPS esports viewership. The three biggest games in the genre going toe-to-toe against each other is only going to result in better overall products for the community, which is certainly a win.
Indian esports is also set to have a monumental year with its re-entry into the official PUBG Mobile circuit via the PUBG Mobile Global Championship and official slots in Valorant Masters events through the Valorant Conquerors Championship. The launch of Clash of Titans could also allow the revival of the often neglected MOBA players in the country.
However, the biggest industry development that I am looking forward to seeing in 2022 is its continued diversification, with more women, people of color, queer and transgender people having a place at the table and being treated with respect and fairness. With companies like Activision Blizzard and Riot Games being held accountable for their misdeeds as well as the introduction of initiatives like Valorant Game Changers and ESL’s CS:GO Circuit for Women, it is a sign that things are finally changing. While there is still a lot more to be done to make the industry a better place for the aforementioned communities, seeing these first steps makes me optimistic, and that is certainly a welcome change heading into 2022.
Happy New Year everybody!