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"eSports is, for us, the wake of the boat" - Super Evil Megacorp

COO Kristian Segerstrale on Vainglory's ascendancy as an eSport, and why massive prize pools are bad for business

At Casual Connect USA this year, I saw a panel of experts predict that eSports was on the cusp of leaving its “Wild West” days behind. The games industry's biggest companies were committing huge resources to the space, and financial investment from the traditional sports world was starting to pour in. Even a handful of public scandals were interpreted as a net positive; products of a market that was high on enthusiasm and low on revenue, and illustrative of the ways its incumbents needed to straighten up ahead of the inevitable boom.

Super Evil Megacorp intends to be a driving force in that boom. In August 2015, the company raised $26 million to fuel the growth of Vainglory, a MOBA for the smartphone market with serious designs on eSports glory. According to its COO, the serial entrepreneur Kristian Segerstrale, the last 18 months have been defined by growth: a 10x increase in Vainglory's eSports viewing figures, a multimillion dollar deal with Twitch for the game's eSports league coverage in North America and Europe, sponsorship revenue from companies like Amazon, Nvidia and Red Bull, and a surge of interest from both general and Vainglory-first eSports organisations.

At the time of our interview, Segerstrale claimed that more than 3000 teams were engaged with Vainglory's “multi-tier eSports system,” which includes qualifying tournaments taking place all over the world, the top eight teams competing every single weekend, and a season-ending world championship called Worlds. Super Evil Megacorp has accomplished all this in just over two years, and Segerstrale is confident that this is just the beginning - both for Vainglory, and for eSports as a whole.

Q: eSports as a commercial proposition is still a relatively young phenomenon, but Vainglory has still managed to put a lot of the necessary infrastructure - leagues, live events, sponsorships, and so on - in place relatively quickly compared to other games in the sector.

"For the vast majority of our players it's not a case of, 'Do I play on my PC, or do I play on my mobile?' Mobile is the only thing they have"

KS: We're standing on the shoulders of giants. It's true that we still consider ourselves to be very early - not as early as a year ago, but still somewhat early - and it's been a lot easier because so many PC eSports have grown. We've learned a lot from that, and that has allowed us to grow fairly quickly. The other thing is that everybody has a mobile, so in some ways it's much easier to have a larger addressable population.

Q: PC games and mobile games don't tend to see each other as direct competitors. eSports seems to level that off a little bit, though, and certainly from the perspective of the viewer. Once the game is on a Twitch stream the platform makes no real difference.

KS: It does and it doesn't. A lot of people who watch Vainglory eSports are shocked when they learn that it's played on a touch device, because when you watch it on a big screen you can't tell.

But we don't actually view other games, and PC games in particular, as competitors. My generation, the way we grew up, the PC was my main thing. I would go to the PC to write my homework, to browse the web, to play games. That was my platform, and that's the thing that's changing. The touchscreen generation is growing up, and they go to mobile to play games, to browse the web, to do social networking. For the vast majority of our players it's not a case of, 'Do I play on my PC, or do I play on my mobile?' Mobile is the only thing they have.

You could compare PC to ice hockey as a sport, where you need access to a rink and all that equipment to play. Whereas for something like football all you need is a ball, and you can go all the way from a favela in Rio to the world scene if you're good enough and dedicated enough. That's the promise with touchscreens - everybody has one.

Q: It's certainly true that some of the most successful games ever created are on mobile, but does it logically follow that the most successful eSport will also be on mobile? The culture of gaming on mobile is so different.

KS: I think over time, just doing the math, that will be true. However, when most people think about what to expect from a game played on a touchscreen right now, there is literally a whole generation of touchscreen gamers whose understanding of games is three minute sessions, timers, energy mechanics, pay-to-win mechanics, which breadcrumb you through an experience. That can be a great experience, but still a very specific kind of experience.

One of the great things about Pokemon Go is that Niantic has finally been able to show the touchscreen generation that you can do a totally different thing on these platforms. And we think that an experience like Vainglory - or something else - will over the next three or five or seven years figure out how to evolve gaming culture on these devices away from freemium experiences, toward experiences that are much more social, much more team-based, about us sitting around a table together and playing.

"Today, we are much smaller than the biggest things in MOBA, but part of that is because we're deliberately sort of insurgents"

We think we've made a really good start. Today, we are much smaller than the biggest things in MOBA, but part of that is because we're deliberately sort of insurgents, if you like. We want to bring to this touchscreen player the kind of experience they don't know exists yet, and that spreads virally: it spreads through communities, by word of mouth. It doesn't spread by TV advertising.

Q: Have you been seeing that organic growth with Vainglory?

KS: Our organic growth over the last year has been great. Even six months ago, the game experience was the really big focus for us. How do we ensure that it's legit? Like football or basketball or anything else, you have to be able to play this three days a week and it's still a fun, competitive experience.

Only in the last three to five months have we started to feel we're kind of there or thereabouts. What we're now focusing on teaching people to play the game, because onboarding has been really difficult to date. Only recently have we started adding bots, proper tutorials, ways to play on your own without friends, all those things.

Q: Does Vainglory exist separately from your ambitions for it as an eSport? It's still a game in its own right, with monetisation mechanics, so it could be a business separately from all that.

KS: That's a good question. We are first and foremost a fun and competitive game. All of the drive that we have is for the type of games that we grew up with on PC: long sessions, play with friends for hours and hours, order pizza, play some more. That experience has kinda been denied to the touchscreen generation, and that's the experience we want to build.

Now, as it turns out, in creating a game with a core ethos that is so competitive, the community has grown out in that competitive fashion, and hence you get things like a very visible and growing eSports scene. But eSports is, for us, the wake of the boat. It's a manifestation of what we're doing right with the core game experience. Ultimately, though, we think that the huge opportunity is for that generation of touchscreen gamers to graduate from those very short sessions. If we do a good job of that - or whoever does a good job of that - will ultimately be so much larger than the largest PC games ever were.

To your question, we would never take a step in the game that actively undermined the eSports world, because in some ways that's the tip of the iceberg. It shows to us that the overall fabric of the game and its community is healthy. But the vast majority of our players are clearly not top-ranking eSports players. They play the game just to have fun, and they watch eSports to learn.

Q: The financial stability of eSports has been a hot topic this year, particularly in terms of the amount of money available to team owners and their players. The International had a $20 million prize pool, which is far ahead of anything else. Are bigger prize pools the answer?

KS: I actually believe that a prize pool of that size is detrimental to the eSport, and I'll explain why.

"The bad thing about a $20m prize pool is that it comes at the expense of investment at the grassroots of the eSport. It comes at the expense of things like sponsorship money for the teams"

The most important things about competitive play at a high level is sustainability on the one hand, and on the other hand the dream. The great thing about a big prize pool is that there's a dream, and you can follow a team and watch them go for it. The bad thing about that prize pool is that it comes at the expense of investment at the grassroots of the eSport. It comes at the expense of things like sponsorship money for the teams. Imagine if the way that football was organised was one giant tournament for all the teams at the end of each year, and that's it: single tournament, single elimination, just one tournament. Everybody would remember the one team that won it, but nobody would sign sponsorship deals with anybody… It would be very difficult to make a sustainable team.

The other extreme of how it could be done is the way League of Legends does it with the League Championship Series, where you have, y'know, 8 or 10 or 12 teams in a division just compete; week in and week out, it's the same teams playing all the time, and then there's world championships and whatnot. The good thing about that is its great for sustainability, but maybe the dream is a little bit dead.

The thing that we're trying very hard to do is to make sure that the prize pools, on the one hand, are big enough to be exciting; last year alone the prize pool was about $350,000, and this year it will be about double that, which is good for where we are right now. But there is a regular recurring league at the top level in every region, which means that we can attract viewers and sponsorships, we can create that connection between the players and the fans, and ultimately sustain the long-term value of the teams. They are businesses like anything else, so they need to be able to form fanbases, and sustain themselves through merchandise sales, advertising, sponsorship, and all those things.

But we also want to keep the dream alive, so we have a challenger tier of our tournaments, where anyone can register and fight all the way up to the top level of the competition and challenge the top teams. To cut a long story short, the good thing about being a new game in the eSports scene is that you can learn from what everybody else has done, and we are, first and foremost, focused on sustainability. The prize pool for a tournament is only be a small amount of your compensation.

Q: Most established sports have regulatory bodies, which help to - in theory, at least - protect the interests of pro players and ensure it remains healthy at the grassroots level. Is it up to, say, Riot or Valve or Super Evil Megacorp to take responsibility for that sustainability? Would an external body like UEFA or the Lawn Tennis Association help?

KS: It's a great question. Sustainability for the industry is very important. It doesn't serve anyone to have bad things happen, whether that's individual players' rights are not being looked after or anything like that.

So far, our view is that the reason why traditional sports really need those organisations is because nobody owns the sport. If you think of the sports which are a little but more 'owned' - like American football, which has a league that's very self-contained and that is who owns the rules - they have a vested interest in making sure that it stays healthy across the board. In the same way, an advantage that eSports has over most traditional sports it's massively in the interest of the publisher to never create a situation that will generate negative headlines, or allow bad things to happen to the players.

We're all having to learn from each other and learn from traditional sports, and, frankly, just eat a ton of humble pie as we figure these things out from first principles.

"The difference is that you will never be a professional footballer at the age of 13, but you can quite genuinely be the best Vainglory player in the world"

Q: That's exactly what makes it so interesting, and so difficult, for the press to write about.

KS: Yeah. Well we have team captains councils and team owners councils for exactly that reason - to understand. We proposed a structure for our summer season to the teams, and they said, 'No, we don't like that.' We had to go back to the drawing board, make the changes, and see if that sounded good to them.

One of the things we're very keen to make sure happens is that, when players sign contracts with their teams, those contracts are protective of the players' interests in the long term. At the end of the day, we never want anyone to skip school because of Vainglory. We want to make sure that people think about their careers in a broader, more holistic way, and the deals that players sign with their teams determine many of those things… It's in our interest to make sure that contracts evolve in that kind of direction.

We feel it's between us, between the players, and between the teams to make sure this whole ecosystem evolves in a good direction.

Q: Do traditional sports help when you're trying to find these solutions? Do you look to football, basketball, tennis and so on for guidance on the best way to grow and the right standards to follow?

KS: Our rulebook, which defines everything, gets edited all the time. Every season - we have three month seasons - we end up rewriting and extending it by a lot, because we're fortunate that, not only are we standing on the shoulders of giants in traditional sports, but there are many eSports organisations already doing a great job.

All eSports rules have a foundation in traditional sports, but then you take out the physicality of it. That's all different. A lot of sports regulation is bound by the fact that you must be the same place physically to compete. The other thing we have to be much more cognisant of in eSports is that you have the same physical ability to play a game from the age of, say, 11 to 13, all the way into your 30s. It's about cognitive capability, so we have to deal with a much broader range of players.

The majority of pro players are in their early 20s, but particularly on mobile and touchscreen we have players who are pro level in their game, but are only 13 years old. We have to be very careful, if we have younger players, to make sure that their parents are involved. That they get to see the benefits that are there, while at the same time making sure that the parents get to be part of making those decisions about whether they want their son or daughter to play that much - just like they are in schoolyard sports.

The difference is that you will never be a professional footballer at the age of 13, but you can quite genuinely be the best Vainglory player in the world.

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