Underneath The International’s $33m prize pool, a flawed system in continuous need of repair

David Okeefe, Tuesday, August 20th, 2019 7:05 pm

“Valve has done an amazing job with Dota 2, and with this scene. I think 80%, at a minimum, of what they’ve done with this scene should be labeled a resounding success. But, I do think, that doesn’t mean that we shouldn’t talk about the other 20%,” Alan ‘Nahaz’ Bester said.

Bester is a former professor of economics at The University of Chicago Booth School of Business. He also plays the role of analyst on panels for Dota 2 tournaments where he frequently contextualizes matches with a cornucopia of statistics.

The Dota Pro Circuit, which is what Bester is referring to, is the official competitive infrastructure for Dota 2. The circuit spans the professional season and culminates, each year, with The International, which is being held this year in Shanghai, China. Eighteen teams will compete for a prize pool that currently stands at a staggering $30 million and is still growing.

The 80% refers to a season that has seen the highest level of professional Dota ever played, millions of dollars in prize money doled out already, and the support structure that made it all possible. As for the other 20% — the DPC of last year was rebuilt from the ground up to solve a number of issues. The problems of the old system were not entirely vanquished, while new ones came into focus.

The first iteration of the DPC reared its head in 2017 and spanned the 2017-2018 season. Valve had initially set forth a plan to sanction and provide sponsorships to 11 major tournaments and 11 minor tournaments. Tournament organizers seeking to host a major must commit to a $500,000 prize pool, live finals, and qualifiers for the North American, European, CIS, Chinese, South American, and Southeast Asian regions, whereas a minor must guarantee a prize pool of $150,000. These majors and minors would award qualifying points towards the scene’s biggest annual tournament, The International, which is currently underway. The top eight teams within the DPC point rankings received an automatic invitation to TI8. Ten more had to qualify in through grueling regional qualifiers; tournaments in their own rights.

From the perspective of players, broadcast talent, and tournament organizers, information was slow and scarce. The calendar of events did not crystallize quickly, leading to confusion. Without a clear top-down picture, qualifier dates for different tournaments overlapped, which led to teams either having to skip trying to qualify for one tournament in favor of another, or trying to juggle multiple qualifiers a day.

All of this had big implications for teams vying for TI8’s then record-setting $25 million prize pool. TI is the sun at the center of the Dota solar system. Other tournaments are planets orbiting it. Bester compared it to the NCAA’s March Madness.

The season’s schedule was back-loaded with events, but teams lacked guidance in how to navigate the often chaotic scheduling. They opted to take the safest route possible and play in as many events as they could in an attempt to guarantee their TI8 invitations. In reality, several of them probably didn’t need to go to such extremes, but they couldn’t know that ahead of time.

“…By the end of the season, everybody was just sort of ready to keel over,” he said.

Valve did not iterate on the old model for the 2018-2019 season so much as they demolished it to build something entirely new. This season has featured less than half the number of tournaments – five majors and five minors – compared to last season. Even by cutting down the number of events, though, Bester does not think the qualifier situation was adequately addressed. Teams could be asked to play in the grand finals of a major in Kuala Lumpur or Stockholm, go home, and compete in qualifiers for the next major just 48 hours later.

“That’s ludicrous. It needs to go. I think that, in its way, that is even worse than what happened the previous year where we had qualifier conflicts,” Bester said.

Valve’s history with competitive is fraught with examples of this sort of season-over-season upheaval. The 2014 season, prior to the establishment of the DPC, was a stuffed-to-burst free-for-all of tournaments. The next few years Valve exerted more influence over the scene and there were fewer officially-sanctioned majors.

“The big problem that we get with Valve is that we have this pendulum effect where every year it feels like we’re reinventing the wheel,” Bester said. “It just feels like every year, we over-correct for the problems by the system with the system, by reinventing the wheel.”

One example he cited was that last year’s DPC was criticized for tournaments on the circuit directly inviting too many teams. The Super Major, the biggest major of the season, directly invited 12 out of the 16 competing teams instead of forcing most of them to prove their mettle. This season no tournament, minor or major, had direct invites at all.

“Maybe this is the economist in me talking, but the end points of the spectrum are rarely the optimum, right? It’s almost always somewhere in the middle,” he said.

At last year’s $25 million TI, two commentators, Trent ‘TrentPax’ MacKenzie and Gabriel ‘Lyrical’ Cruz, commentated during the final day of the event. They were entrusted with the responsibility of providing entertainment and incisive analysis to an audience of hundreds of thousands of English-speaking audience members tuning in on the biggest day of the biggest tournament of the year.

This year, Cruz appeared live at only one DPC-sanctioned event, The Chongqing Major, and was an off-site commentator at The Paris Major at Disneyland. MacKenzie appeared as an analyst or commentator live at The Kuala Lumpur Major, and at Epicenter which just took place in Moscow, Russia. Additionally, he was brought on as an off-site commentator at just three other DPC tournaments. Bester considers this to be evidence of another problem within the system.

“I also think it’s a lot of organizers are just realizing that it’s not easy to make money off these events. You’ve seen that, not only for talent, this year has been abysmal. It has been a brutal year to be Dota 2 talent,” he said. “That’s kind of the thing is I don’t think that the small number of events system is great for organizers, at least until more revenue channels are open. I don’t think it’s great for players in terms of it creates a very rich get richer system.”

When he describes a “rich get richer system,” he is referring to how the overall percentage of prize money awarded throughout the season has skewed more and more heavily into being concentrated into one event: The International.

For the first two years of Dota 2’s life, The International had a prize purse of $1.6 million. By its third year, The International still featured the same base prize pool, but introduced a community-funded compendium which converted 25% of revenue made through the game’s battle pass into additional prize money for the tournament. In the first year after this was introduced, an additional $1.2 million was added to the pool. It’s how The International has continuously offered more and more money to competitors, breaking its own record year after year.

As a percentage of the prize pool, TI’s champions have taken home between 36% and 62.5% of the purse depending upon the year. Last year’s champions, OG, walked away with $11,234,158 split across the team, or 44% of TI8’s purse.

For comparison, $13 million was up for grabs throughout the rest of the year, with each tournament offering similar distributions of prize money. That is, without question, a large amount of money, but it was also spread across 22 events. In other words, last year featured 23 tournaments total, and a single tournament represented 35% of the available prize earnings, and a single team won 28% of the season’s total earnings from that one tournament.

This year, with only 5 majors and 5 minors, all of which feature comparable prize pools to last year’s events, and TI9, which will feature an even larger purse, there will be even more money funneled to a relatively small number of teams.

Bester believes that one of the reasons Valve may have chosen to scale back the number of events to five majors and five minors was due to event organizers last season who were either unable or unwilling to make good on their financial obligations to teams and contracted employees alike. According to a Tweet by Bester last year, he is owed “in the mid five figures in talent and consulting fees.”

He cited The Global Electronic Sports Championship, which hosted two minors last year, as an example to us. According to him, GESC has not paid the teams who competed, the broadcast talent, or their staff from the events.

So, in reducing the number of DPC events, the smaller pool of tournaments would likely lead to fewer organizers involved, and the smaller pool of organizers would likely longer histories with Dota, would have accrued more of a proven reputation, and would have more to lose if their reputation was damaged with similar allegations.

“I’m very, very disappointed in that situation because to me, Valve is taking home 100 million plus in revenue from The International every year. When these events are part of your competitive circuit, I think you do have underwriting responsibility. I do think Valve should. Those were DPC events and due diligence ought to have been done,” he said.

If The International is the ultimate destination, than the DPC is the highway that gets you there. It is the infrastructure for this behemoth of an event, and many of Bester’s qualms and criticisms center around the sustainability of the scene.

“We get stars in our eyes over the dollar amounts, but at some point, it does come down to how many people can the scene support professionally, and how many people do we want to be able to make a living off this game?”

Fewer events in the season has not only contributed to it being a rough year for broadcast talent, but it also means that fewer teams had the opportunity to compete for a series of prize purses which have continued to become proportionally smaller than that of one very exclusive mega event. It begs the question, how many teams can the scene support, and is that worth it so that the TI champion can take home upwards of $10 million?

He does not consider that to be a simple value decision. It is hard for him to argue that redistributing 5-10% of the money that goes towards the top 4 placing teams at TI wouldn’t allow for the landscape of Dota 2 esports to support a lot more people.

His proposition would be to take every dollar amount beyond 20 million for TI, and put half of it into a fund for the next year. This fund would go towards things like covering flights and hotels for qualified teams to Majors, and to offset some of the costs for tournament organizers to make these events more sustainable.

“People think that these majors, and especially minors are like printing money and they’re not. They are events that have to be tightly controlled in terms of budget. Epicenter ain’t making any money, guys. I’m sorry to tell you. They are great. They put on a fantastic event and they’re awesome to work with, and the stage looks immaculate and it’s a wonderful showcase for our game. That tournament isn’t making any money. Eventually, that bill comes due,” he said.

Given that the basic structure of this season with five minors and five majors will return next season, the single biggest change Bester hopes to see for next year is the consolidation of qualifiers for major and minor events as well as automatic invites to the next major for the top-four-placing teams at the event prior.

“The talent and the players, all of us are, we are critical because we love the game. We want to see it the best it can be. The problem is, as with so many things in social media and online culture, it gets so polarizing and you become either a fanboy or professional critic.”

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