Yahoo eSports Shuts Down

YAHOO ESPORTS SHUTS DOWN

Yahoo eSports Shuts Down (Photo: Oath)

Yahoo eSports Shuts Down (Photo: Oath)

TNL Take:  One of the sadder eSports stories to emerge from E3 last week was that Yahoo eSports would be shuttered.

Anyone losing their job is bad news and having spent over a decade in the gaming space, I've seen plenty of friends laid off after putting blood, sweat and tears to ship a title on time.

This is unfortunate but not a surprise however: it had been talked about that the site was struggling overall - ESPN eSports has ~10X Twitter followers - and a week prior, it was confirmed that Verizon was laying off as many as 2,100 people of AOL-Yahoo's staff after the merger closed.

This obviously also kills the 2-year deal that ESL signed with Yahoo eSports last August to produce tournaments together as well as brand deals like this one with Reese's Puffs.

ESL's 2 Year Deal with Yahoo eSports Is Done (Photo: The Next Level)

ESL's 2 Year Deal with Yahoo eSports Is Done (Photo: The Next Level)

A few days prior to the Yahoo news, another eSports site Gamurs, announced the closure of one of the leading eSports wiki sites. Gamurs themselves merged with Dot eSports just 3 months ago.

Gamurs CEO Riad Chikhani wrote an excellent Medium post that outlines the reality of digital media today especially for those in gaming and eSports. Here are a few key points:

  • One of their sites was averaging around 1.85M page views per month with 5 ads on the page, generating ~9M+ "ad impressions" per month. The CPM - Cost Per 1,000 Impressions aka How Sites Make Money - averaged just under $3 last year. So in an absolute perfect world scenario, the site would generate about $300,000+ a year which isn't bad. However, perfect worlds don't exist, especially not in media

 

  • Generally ad block is anywhere from 25%-50% depending on content. However, gaming/eSports has the highest ad block rate of any type of media content. Riad confirmed that ~80% of site users were using ad block which is absolutely in line with both gaming media sites and some streaming content

 

This isn't restricted to gaming media but digital media overall. Here's what's happened in just the past 3 months outside of Verizon:

There are a lot of reasons why this is happening but here's 1 very simple chart to illustrate a major point:

There's Google and Facebook and then Everyone Else (Photo: Poynter.org)

There's Google and Facebook and then Everyone Else (Photo: Poynter.org)

Analysis from Pivotal Research group estimated that 71% of all digital advertising went to the two industry behemoths, Google and Facebook, while the trillion other publishers, media companies, social networks, and programmatic middlemen fight for the ever dwindling portion of the pixelated pie.

Now throw in Oath (Verizon/Yahoo/AOL), Twitter, Snapchat and 5 companies have a lock on ~80% of the digital ad market.

5 companies. 80%.

There have been many, many, many articles on the "downfall of digital media and the power of the few", however this quote from Talking New Media lays it out well: 

I’ve been in publishing professionally since 1981, but anyone can write about media these days, and most of the sites that do are staffed with those whose very first job in media was to do so. Some end up doing a great job and are supported by editors and revenue producers. Others come and go so frequently that it is hard to chronicle their launch and death. But success is not merely a matter of doing one thing well: content or design or technology is not enough in isolation, nor is having one great idea.
The media business, like making a film, involves many different skills, great ideas, creativity, sufficient funding, license to experiment. Then a lot of luck.
Good luck to all of you.

 

Wish all the staff of both sites a safe landing.

Time To Kill The "eSports Beats Sports Viewers" Stat

TIME TO KILL THE "ESPORTS BEATS SPORTS VIEWERS" STAT

No eSports Isn't Beating The NBA In Viewers (Graphic: Riot)

TNL Take: If you read any Mainstream Media article on eSports, it pretty much starts like this:

Part 1: What’s eSports? It’s kids playing video games and getting paid for it. Can you believe it!

Part 2: Insert latest SuperData or Newzoo - nothing against those companies - projections on market size and revenue estimates.

Part 3: More people watched League of Legends than [Insert Sport of your choice]

For those that don’t know anything about eSports, the first two parts are totally fine for a new audience – although you know my thoughts on eSports projections.

 It’s Part 3 that I have the biggest issue with. Why?

Because it’s completely wrong.

Go ahead and Google “League of Legends beats NBA Finals” and see the results you get. I’ll even make it easier for you, here are the first four:

Results For "League of Legends Beats NBA Finals" (Photo: Google)

Now those aren’t just tiny gaming sites or some random blogs – is that term still used? – no, these are national if not international media organizations.

 

USA TODAY

USA Today's League of Legends Headline (Photo: USA Today)

 

ESPN

ESPN's League of Legends Headline (Photo: USA Today)

KOTAKU

Kotaku's League of Legends Headline (Photo: USA Today)

 

Why would large media companies make statements like these?

Simple: It makes a great headline… and they don’t understand eSports metrics.

Here’s the reality.

 

01/ NIELSEN

When reporting on any TV or sports viewership data – be it the NFL or Mr. Robot – there’s a standard metric that’s been used for a very long time: Nielsen.

Nielsen’s viewership data is based on the “average” number of viewers who watched the entire program or event. It’s not the total viewers in the first hour, the last hour or even the maximum during one particular moment – it’s the average over the whole game.

Here are the Nielsen numbers for the most recent 2016 Sports Championships or Finals:

2016 Sports Championships and Finals Nielsen Ratings (Chart: The Next Level)

02/ NIELSEN AND ESPORTS

So does Nielsen measure eSports?

It’ doesn’t.

That’s why most reported eSports viewership data is all over the place: Maximum concurrent users, total minutes consumed, most social posts, engagement metrics, tickets sold, number of hot dogs consumed, etc.

So you can’t really compare Sports TV content with digital eSports content.

Yet the media still does.

 

/03 US VS. INTERNATIONAL

Here’s a little secret that pretty much only people who work in the industry know: depending on the eSports game, the international viewership could be anywhere from 25% up to 75%.

The Nielsen viewer numbers don’t count how many people in the Ukraine watched the NBA Finals. It's only US viewers.  But eSports viewership data is global.

Another reason you can’t compare TV Sports vs. digital eSports.

 

/04 WHAT’S THE REALITY THEN?

The reality is that it’s really hard to make an apples-to-apples comparison between Sports and eSports viewership.

But I’m going to show you what I think is closer to reality.

There is always one stat that gets used for the #1 eSports game in the world: League of Legends. The headlines are usually “League of Legends Beats/More/Watched than [Insert Sport Here]”.

So let’s try to get this as close to Nielsen metrics as we possible can for some comparison:

 

  • The 2016 League of Legends Finals had a peak of 14.7M viewers.  That means at one given moment, ~15M people were watching. I’ll be very generous and let’s assume that the PEAK viewers was the actual AVERAGE over the entire game.

 

  • The Finals were between two South Korean teams – SKT and Samsung Galaxy. I’ll be very generous again and say that 50% of the US watched - but it’s probably much lower.

 

Taking those 3 factors into account, the relevant “Nielsen eSports Viewership” for the 2016 League of Legends Finals would be 7M – NOT 43M.

 

So has a League of Legends Finals ever beat the NBA Finals, The World Series or any other Sport in viewership?

Here’s how they stack up based on 2016:

2016 US Viewers: Sports vs. LoL (Source: The Next Level   Graphic: Jordan Fragen)

As you can see, eSports viewership as a whole in the US has a while to go to catch up to other sports.

Before the hate mail starts pouring in, what does this actually mean?

  • Is League of Legends over? No.
  • Is eSports a lie? No.
  • Is eSports dead? No.

Does eSports have a future? YES.

 As I’ve said many times “I don’t care about the next 12 months – I care about the next 12 years”.

I want to see eSports flourish, implement a healthy infrastructure and an ecosystem where players, teams and publishers can all benefit.  I hope that everyone from billionaires to sports teams to venture capitalists don’t expect The Next Big Thing tomorrow.  There's a massive global opportunity ahead.

 

Let’s not burst the bubble before we’ve even started