MLG CEO enters the Arena

Last weekend's Starcraft Summer Arena by Major League Gaming was the first free-to-watch Arena event since its inception. Similar events had previously been available only through a pay-per-view format, but the Summer Arena's feed was opened up thanks to a sponsorship from Full Sail University. GameSpot sat down with MLG CEO Sundance DiGiovanni to learn about why MLG decided to open the feed up for all, the challenges it faces, and what's to come for next year.

GameSpot: Why have you decided to make the Arenas free?

Sundance DiGiovanni: Oh well, It wasn't so much of a deciding vote that anyone here cast. The goal was always to get to a place where there is enough interest around them to find a way to open them up. We're going to still have the HD upgrade and certain Arenas may have PPV components to them, but Full Sail University is helping with this initial one to kind of lead the charge to see how it goes. Before we did an Arena, nobody knew if there would be interest in them, so there was no way to model that out. The goal was never to block the community from having access to the Arenas; the goal was just to prove that there were business models and revenue lines that we can associate with the activity.

Everybody makes assumptions that we've got unlimited funds to invest and we're milking as much money as possible, but if these activities are able to sustain themselves, we can do a lot. We don't see ourselves getting a million people to sign up for PPV, but we do see an opportunity to get advertisers and sponsors interested based on the audience size. I'm hoping that stuff we have planned for next year is even more open, free, and available for the audience again. Somebody has to pay. It's either us, advertisers, sponsors, or the community. I want the community to be the last line in defense in that equation.

How much did the Anaheim event (the largest in MLG history) come into play, with a sponsor jumping on?

It definitely helped as we start to put plans for 2013 together and were able to point to that. Those numbers were huge, not just for eSports but in terms of young male demographic consumption rates, it tracked really well against things like college football and bowl games. The brand saw that, and we're able to package something up where the community wins because they get access, and the brand wins because hopefully the community recognizes that and appreciates it. It's a good thing for everybody.

If the Arenas were doing well behind a PPV wall, why change it now?

Not that this is a popularity contest, but people were definitely not necessarily happy with the fact that there was PPV in place, and they were not able to see things. There's a fine line between creating a sustainable business and keeping the community happy and making sure those things are in direct connection with one another. Yeah, we could continue with the PPVs, but there'd be no scale to it. We know how many people are going to tune in because of the model we have compared to the ones we've had; we know the size of that audience. The reality is there's a much larger potential audience if we're able to unlock it and bring in brands and advertisers.

We don't want to live and die off the revenue we generate directly from the community. One hundred percent of the community can't afford to watch every piece of content that we produce and distribute. There's got to be a nice balance; it's not yet at a point where we can say we're going to do the UFC model, where nearly all of the content is [paid for by viewers]. It's completely understandable to look at it and say if it's working, why change? It's because everything has to scale; there's got to be the ability to grow. While PPV is a sustainable piece of the business, the scale of it is not going to accelerate as quickly because it's closed by nature. If nobody tunes into this next Arena, guess what? We'll probably be back to PPV. But I think we'll have an audience. By making these events PPV, I know I can make a certain profit margin. If I make more with Full Sail, and more with the premium upgrades, then it's a no-brainer. If they're very equal in terms of what the net revenue is, I would still prefer to go with the open format.

The way brackets work was changed for the Starcraft Arena. Why did you decide to switch it up?

We're making some changes on how we do brackets and seedings to try and avoid scenarios which are unpopular with the community and the players. I think when we start to talk about what we're going to do with the Championship events, people will be happy to see some legacy stuff go away. The goal is to provide entertaining events from beginning to end.

Does that mean we'll be seeing Extended Series, maligned by both fans and players, going away soon?

I have no comment on Extended Series today, but I will soon!

Do you feel the difficult-to-follow formats that eSports and competitive gaming utilize--double elimination as a standard--has hurt the viewing experience?

My number one complaint is that as the event goes on, there are so many people that are knocked out, nearly all of those being the fan favorites from the different regions. The North American, European players struggle to get past a certain point. Ilyes "Stephano" Satouri, Chris "Huk" Loranger, and a few others are exceptions to that, but it can't just be a rotisserie of Korean players being showcased every time out. That's a knock against not the format necessarily, but the structure of the year.

There's all kinds of crazy and wonky things that happen in the world of competitive activity, whether it's baseball having a different format from round to round in the playoffs, the NBA going all best-of-7's in the playoffs, and the [Bowl Championship Series] in college football, which is worse than anything we've ever done. We're working to change not only our bracket structure, but also change the way we run competitions, so there's opportunity. So there's opportunity for North American players and North American teams.

Is there worry around the North American, and Western players in general, not winning titles or taking the top spots?

We had to do what we've done in order to globally have a footprint. We worked hard to bring over players from around the world, and a focus on the Korean scene. Now what we need to do is look at our own scene. I want to try to examine ways to work with the other organizations out there, to globally create a structure where you have access to meaningful competition in your region.

One of the big things from the [Korean e-Sports Association] partnership that's a focus from both sides is that it's not very exciting if the Koreans are just light years ahead of everybody. Now KeSPA doesn't want to lose necessarily, but they don't want to see the rest of the world lose interest because there are no foreign players making moves. They don't want to see everybody transitioning away from the game. We're looking at things we can do around Heart of the Swarm with our relationship with KeSPA to regionalize some of the activity so that the individual scenes have more importance.

With the upcoming debut of the League of Legends Arena, and the Fighter Arena the weekend after, every title at the Championship events now has an Arena. Is the plan to tie the Championships and Arenas together across all games?

Not sure yet; a lot of things are changing for 2013 from a structure standpoint. Game by game, it's going to be a little different based on the wants and needs of the publishing partners. This year it made sense because this is experimental in a lot of ways. Next year I see us doubling down--I see us doing significant work on the North American scene. Who are the top eight players and why do they matter? You can look at what KeSPA and [Global Starcraft II League] has in Korea. That's a great model for them. I think North America needs something similar. From an Arena standpoint, it may not be that whatever we're doing is an equal amount of activity around each title, but something with each, and a higher level of custom activity around a title or two.

What are your expectations for the first League of Legends Arena?

League of Legends right now is on a roll. Engagement is high, and it took over as the most played PC title in terms of an activity standpoint. We're running it because we think the community will respond well to it. We'll be able to take the data from that Arena and look at what we want to do bigger picture. Riot Games have serious plans about what they want to see us do as well. You're going to see a lot of things happening with the title in the future. Fans of that game have a lot to be excited for, lots of energy in the space for that scene.

The Evolution Fighting Game Championships also had their largest event in history. Do you see fighting games getting a boost in priority in MLG?

EVO was awesome. If you look at the stuff they do well, there's so much we can look at from it. There are certain problems around us being rigid in structure and format, but even if they do it doesn't mean necessarily we're going to get a huge lift from that audience. We're not going to walk away from it this year; we're going to see it through and see what happens next year. Even if we had EVO numbers on people watching, it wouldn't be tremendously impactful on a revenue standpoint. It's not a question about money; it's about an opportunity to support that community and grow it over time. At the end of the day it's going to be up to the publishers and the game makers on the dev side, and the community more than anything else. I think it's a great fit. Tekken is actually the thing that got me into all of this, but we'll see how this is going to play out.