Event organizer Alibaba has announced that the World Electronic Sports Games (WESG) will be publicly subsidized. The news comes as it was revealed the first WESG tournament cost $22 million. The WESG debuted in 2016, with international qualifiers leading up to a final held in China in January 2017. The tournament includes the likes of Hearthstone and Counter Strike: Global Offensive. Other games include the likes of Battle of Balls and Starcraft 2.
Not Cost Effective.
The $5.5 million prize pool attracted interest from players and spectators alike, but hosting the event came at a significant cost to Alibaba. Alibaba’s own South China Morning Post revealed that cost was 150 million yuan, which translates to over $22 million USD.
The company sports arm Alisports has drafted business partners in cities hosting qualifying events to take on a portion of the cost in helping to host regional qualifiers, while Alisports will continue to supply staff for the events and will cover the prize money. The organizers in these cities range from government-backed organizations to sports companies and developers.
Tournaments hosted by game developers are much more lucrative because developers can profit from selling more games or in-game items. This is the case even if the tournaments themselves were not profitable.
Alisports General Manager Wang Guan recently boasted of over 20 Chinese cities already working with WESG. This will end up with a cost reduction of 73% as a result of the partnerships. No mention has been made of partnerships with the international cities, from which the bulk of competitors in the inaugural WESG finals were fielded.
Guan also revealed that eSports currently accounts for 40% of Alisports operations. This will increase to 50%, according to Wang. Whats more, Alibaba is very much committed to WESG, having a 10-year agreement in place with the city of Changzhou, China to host the competition’s regional and world finals events. There are currently 20 host cities chosen from a field of 30 applicants. These host cities are currently unknown.
WESG Tournament Problems.
There was also a number of problems with the first tournament. A number of top teams were ineligible to compete due to nationality restrictions. Due to the rules, one team had to represent a single nation. This was a particular problem in a game like Dota 2, in which the majority of top teams field rosters featuring players from around the globe. It’s also a stark contrast to the diversity of attendees in the audience.
This reflects an evolving and increasingly global eSports industry. Tournaments like this were the norm 15 years ago. However, this is rare now and has been for a number of years.
One shouldn’t expect Alisports to back away from the angle of national representation, however. It was reported in April that Alisports had partnered with the Olympic Council of Asia to bring esports to the 2018 and 2022 Asian Games. The prize money for the next tournament is $5.5 million. Wang has said WESG was a third-party esports tournament since Alibaba neither owned nor operated any of the games. The full announcement is available here.