The Economics of Professional Gaming

You are tuned in to Steve Megatron on Altered

Geek. Hello and welcome to Altered Geek. I'm

your host, Steve Megatron Phillips. Joining me

again on this endeavor into the stars of geekdom

is Mike the Birdman Dodd and Alex. Oh, my God.

We're here on a podcast. Delicious, isn't it?

I know it's been about three weeks since I've

had one of these episodes. I know it's feeling

kind of good to be back, so I don't know when

this is airing, presumably this week. It is this

week. Hopefully you've done your due diligence

and have played through the multitude of video

games that have come out in the last few weeks.

And hey, Pokemon Sword and Shield come out this

week as well as Jedi Fallen Order. My God, there's

too many frigging games. I don't know how Alex

is doing with Death Stranding, the game that

takes like 70 hours to get through. I haven't

played in a day because I had so many other things

that were pertinent. But I'm enjoying the ride.

I'm going to call it right now a weirdness. No,

it's Billy Goat Mountain Walking Delivery Simulator

2019. But at least there's no micro transactions.

Oh, none. None whatsoever. And actually some

pretty cool social aspects to it. But and still,

in at least my personal opinion, the best looking

PS4 game. So anybody I his. criticisms have been

that there was that translation issue where he

was telling people that it might be too hard

or different for Americans to understand because

it's not a shooter. And it wasn't meant to be

rude, I don't think, in its way. It's just that

those are the games that sell in the States.

And it is a very different type of game. Yeah.

Most American outlets are not reviewing it very

favorable. It seems to be doing a little bit

better overseas. Well, it's doing really well.

Canada, Europe... Anywhere else the states isn't

but it's just it's a different thing Europe they're

more used to esoteric games and like weird puzzle

games the closest thing I can like Equate it

to be like a shadow of the Colossus. Although

it's not shadow of the Colossus, right? It's

just the idea of it being so different from your

regular adventure game But yes, so have you guys

heard of a since you're talking about micro transactions

Have you heard of a site called microtransaction

.zone? No. No. Okay. This website, it allows

you to search practically any video game and

it will tell you exactly what it does. So like

if I look up, for instance, Star Trek Online

on the website, it'll say it's for PS4. It's

for PC and Xbox one and it says there's multiple

categories on there. There's like the the free

to play icon. There's the expansive expansions

icon. Minor DLC icon. It's. Basically loot boxes.

You know the. In game purchases, there's there's.

gameplay altering effects with real money, the

pay for, you know, instant upgrades for speed

and time, paid subscription models, other things

where it needs like a real world thing like an

Amiibo or it's a multiplayer that contains additional

monetization, but single player doesn't. So like

there's all these little different category icons

that light up depending on what it is. So for

like Star Trek online, it says free to play no

upfront purchase required to begin playing But

then it's got this thing called horse armor that

says minor DLC with no randomization involved

new items equipment abilities, etc And then it

says it's not gambling. We swear and it says

loot boxes with randomized contents viable with

real money And then it says infinite money hole

no upper limit on in -game purchases And then

so like those are the ones that are lit up for

the game but you can you can practically search

like any game and it will tell you uh all of

the different functionalities and features that

are involved what does it say for death stranding

said death stranding i can't see kajima putting

that in but then again metal gear solid five

had it so death stranding doesn't have uh any

of those things lit up yeah that's what i figured

uh pretty clean metal gear did because remember

he lost control that game Yeah, and there was

the whole Ford base operating thing, which was

a fun minigame, but it wasn't worth spending

money on. What Metal Gear? Metal Gear V. Yeah,

V. V? Yeah. The Phantom Pain? Yeah. Yeah, it's

got the horse armor one lit up, the infinite

money hole lit up, the changing the game basically

content with gameplay altering effects viable

with real money. The speedy instant access upgrades

and then the by first you'll need a contract.

You remember Mike how they said it was his last

game But then reality was they basically fired

him when it was only 80 % complete Yeah, so they

added all those things after he was gone Traditionally,

he hasn't put anything like that in his games.

He's made his games like one cinematic event

Let's say, yeah, I want to say like there was

things you could download a Metal Gear Solid

4, but I think they were free. They were only

in the online mode that had nothing to do with

the main game. You had to download a separate

game that used the same assets. No, I'm talking

about you could download skins. Like they were

free. Oh, yeah, yeah, yeah, yeah. They were free.

They weren't, I don't think, paid at all. Yeah,

it says that Metal Gear Solid 4 On this one because

it's on the same page Said it featured free costume

and in -game music DLC, but the download servers

were shut down But it says that it's spotless

you can buy the game you own the game full stop.

Yep. Yeah, and then that was I mean that was

early in the old like PS3 era, but a lot of games

were already implementing crap like that. Like

I don't mind the pay -to -win mechanics when

they are in like a single player, especially

strategy or RPGs, when there's no way to interact

with somebody else to get an advantage. There

are some people that want to experience the story

or just clown around in those games and not want

to have to put 100 or 200 hours in because they

have the time to. And if you want to spend 10

bucks to power yourself up to max and then just

clown around that's on you it doesn't necessarily

destroy anything this part has been edited ha

ha ha you'll never know what was actually here

and you will never know that anything happened

between this nope not at all so speaking of gaming

anyway i should be getting soon uh as long as

um it shows up this week I should be having within

the next week or so a review of a gaming chair.

So people will have to look out for that. I reviewed

one a couple of years ago. I reviewed a DX racer.

If my ass was smaller, it would have been fantastic.

I mean, they're great chairs, but I know you're

getting it one from a different company. There's

a bunch of ones out now because e -sports is

the hot new thing. So yeah, it's kind of funny.

Having the eSports be a thing now because when

we were kids it was like, oh you're a loser you

play video games and now we're like, oh we're

awesome because we play video games. When you're

like eSports you mean all those Koreans playing

Starcraft 1 that was it. Like there was nothing

or like you get the occasional Madden ball tournament

and then maybe there'd be a hockey tournament

for NHL in Canada but it was basically Madden

and Starcraft. And Halo. You would get Halo 2.

I'm talking before Halo. Diablo. Yeah, fair enough.

Before Halo really hit it big, like late 90s,

early 2000s, it was just StarCraft and Madden.

And you'd have fighting game tournaments occasionally,

but those were small. Yeah, rarely. But I do

remember Madden being pretty big, even in middle

school. I remember watching G4 when they had

that show where they would play Unreal Tournament

2004. Oh, yeah, and then they would just have

like the tournaments on there and I'm like I

play that Because I started playing Unreal Tournament

back in 99 when it was, you know a new concept

well, and and that's when the tournament was

like you'd win this computer worth a couple grand

or you'd win like a thousand dollars in prize

money not like 75 grand or a hundred thousand

dollars or whatever you can win at some of the

It was like, you know, when you're you're younger,

you're like, man, that's some great money. And

then now you're like, man, that's a career. Well,

yeah. I mean, like this past summer, a 16 year

old won the Fortnight World Company, won three

million dollars. I saw that. That's crazy. Yeah.

And that same kid got swatted a couple of weeks

later. The other thing is technically he didn't

win. He did win. Oh, really? But no, no, no.

It's just that he's not of age to accept the

money. Oh, OK, I get it. You can't. You cannot.

He won, but he doesn't qualify because of his

age. Yeah, it's considered a job. He signed to

a contract, but he wouldn't be allowed to be

signed to a contract unless his parents did.

So it's like in a trust in his name, right? He

won't get it until he turns a certain age. And

hopefully his family doesn't McCauley Culkin

them and take all the money and run. Yeah. I'm

pretty sure he's spending it, because I know

there are younger players for other pro sports

or pro e -sports organizations that are spending

their money. It would mean the parents will be

spending it. They're legally not allowed. Like,

you don't have signing rights to a contract when

you're under 18. Your parents sign it, so that

means he's getting like, it's like trust fund.

It's basically the guardian allowing them to

be a part of it. Yeah, and the Guardian technically

can't spend it themselves unless there's a reason

like that. It has to go through a lawyer So it's

like here this kid gets a couple grand a month

out of that that money to spend on what they

want So they don't you know, I don't know buy

a whole bunch of Molly and die face down in a

pool at 14 Well, that's dramatic And when I say

die face down in a pool a pool full of Molly,

it's just entirely ecstasy pool You paint the

most interesting mental pictures face down in

a pool full of Molly Police siren coming out.

Yeah, thanks They got a bit of a drive if they're

coming from your place Yeah, it wasn't from here

But yeah, it's it's it's crazy though like just

very briefly, like the next COD season for COD

World League, now that it's attached to different

cities, they now have them in different markets.

Toronto picked up a professional COD team this

year, the Toronto Ultra. That I didn't expect.

I think Atlanta has FaZe Clan, Optic Gaming is

out of Los Angeles now. Minnesota got a team,

weirdly enough. And the COD buy -in was something

like $20 million. So it is not cheap to run a

Cod team plus that's that's like team salary

Plus whatever you place in the tournaments It's

not it sounds like it's crazy except now you're

getting real sponsors and not just Mountain Dew

and Doritos which nothing wrong with them, but

they're not You know, not high -profile. They're

not like Budweiser or a car company sponsors,

which you're Getting to the point where you can

actually have and it's not unheard of for you

know like Budweiser to go, here's $25 million

for the year as a sponsorship. Yeah, I mean,

I know there is a place in Philadelphia, some

kind of an eSports center that I think is valued

in upwards of $50 million. Do not be surprised

if Rogers or Bell or Bell owns part of the Toronto

Ultra. Exactly. And which means that if you look

at one of their satellite or cable channels,

I guarantee you that Bell owns channel that will

be showing the sports itself so they're gonna

want to sponsor a team that they can heavily

put all of the games on on their own programming

which they it's basically it's doubling up as

television advertising money so to them it's

no big deal for them to go hey Toronto we'll

give you ten million dollars a year to have this

because we know you're gonna have so many million

people watching you and we can advertise all

it's not just Bell it would be like all of Bell's

products like their their TV shows, whatever,

if they have investments in other products, they'll

advertise the crap out of it. So it's not crazy

money. Where we're going to start seeing crazy

money is if it ever gets to the popularity of

like the UFC or boxing or something, I think

it will. It won't ever hit football, not in the

States. But it can, it can hit baseball. It might

already be at the same level as baseball as far

as viewership goes. People don't really watch

a lot of baseball unless it's like near the end

of the year. But football will be a hard catch

because in football, you're looking at individual

players that are making 40, 50 million a year

each. So with that in mind, you've got about

10 years, I would say, or until data caps go

away in the States and high speed internet is

everywhere. When you get to a point where streaming

and the popularity of like not just Twitch, whatever

the future of streaming gaming will be. When

you get to a point where you're getting five

ten million viewers for every event Then you're

in full sports money where it's like your team

can easily be raking in a hundred million dollars

a year or more Yeah, and It's it's it's kind

of funny just seeing how it's all playing out

Just just because like like I mentioned before

like it It was such a thing where you were a

dork playing games before now. It's such a big

big deal playing, you know, mental stamina with

other people with just basically moving your

fingers. Yeah, I personally still don't agree

with people that want to drop out of school to

do it or go to school specifically for gaming

because there are some skills that are transferable,

some of the social skills, but you don't have

Yeah, it's not a skill that can transfer to many

other things. Well, it's muscle skill and it's

it's like Determination and willpower to do it.

But at the same time, it's not it's a game It's

especially when like if you're an athlete you

means you're strong and you can work in many

other fields If you're a video game athlete if

you seen the way a lot of these people behave

a lot of times they're having social issues when

it comes to, when they do have to get out of

the field. Let's say they age out, because Mike,

didn't you say that there's a... of relatively

low cap on the age of what these medium, like

the median age of these players are. Yeah, you

don't see anybody typically playing into their

early 30s because honestly, your reflexes slow

down. Exactly. You're not as fast in Fortnite,

you're not as fast in COD, or like even fighting

games. You're just not competitive anymore. You're

at an age where you start to get real responsibilities,

where you can't be up in a tournament for 12

hours a day. Like you might have families, you

might have kids. You you get to a point where

it's just it's monotonous and you don't perform

as well. Like you said Consider this you now

have another 30 years where you have no transferable

skills Or like and it's one thing some people

are really good and they're gonna be good at

talking about themselves and marketing themselves

But like it that doesn't transfer into I can

now have a career in insurance It doesn't like

you need to have some backup just like most ask

anybody in professional sports like They usually

have things like they end up diversifying by

owning property or they own restaurants or they

own other businesses, franchises. They market

themselves beyond just the sport that they were

in because they kind of need to. With these guys,

you see a lot of them getting out of it and then

they've literally like, they don't, they haven't.

matured past a certain rate now. And that's not

like me just being downer on them. Have you seen

a lot of people that get out of it? You see a

lot. Some of them transfer in the social media,

but unless they have the background to understand

what they're doing. Yes, you can learn on the

ground. Yes, it is some very valuable experience,

especially managing like a Twitch channel or

social media or YouTube. But without the schooling

the back, it's more difficult. And you're seeing

people that you're talking about, Mike, are in

our age group. They're the ones that generally

had real life experience before this. Think about

the generation of kids that go. That's my career

path from the time they're nine years old. They

barely care about school. Then they go to a college

to learn how to play esports. And then they have

no real job. They didn't even flip burgers or

anything like that. They just literally do this

all the time. There's like an arrested development

involved. They didn't develop into fully formed

people. I fear for them in 10 years when they

age out of it. Yeah, like there's some streamers

that I'm fans of and they're experiencing a slow

growth right now or even they're regressing a

touch and Wonder what they're gonna do. They

do have some background skills, which and hopefully

they can use But other streamers I know that

are they're still fairly successful on YouTube

They can go like they're already a licensed tax

lawyer So if the YouTube thing doesn't work out,

I'm a lawyer who cares exactly and is and is

this person in their 30s? Yes, exactly. Yeah

It's the kids that are 16 to 24 now Yes. Exactly.

That are kind of boned. Look at Ninja. He killed

his career. His career is done. This is the thing

with him. Until, I don't know, four months ago,

never heard of the dude. I'd heard of him, but

I'd never watched his stream. And I've never

watched his stream either, but what did he do

that botched his career? Because I heard about

him, and then I just didn't. He was the biggest

streamer in the world on Twitch. Millions of

people would watch him. To the point where he

was getting big sponsors deals would go to e3.

He was basically the biggest streaming gaming

celebrity in the world Like he like he like he

constituted a Very large percentage of watch

time on the entire platform Basically, what if

PewDiePie was twice or three times as big in

his field and not a racist? Yes it was baby basically

PewDiePie, but but captured two or three times

the market on Twitch. And Microsoft offered him

millions of dollars to switch over to Mixer.

He went and he lost 95 % of his audience. Nobody

watches. He's lost all of the sponsors. Nobody's

watching. Not only has he killed that, he moved

to Mixer and Mixer's views didn't go up at all.

Well, to be fair, from what I understand from

the data, on Mixer he does have 2 million subs.

That's down from his near 15 million on Twitch.

The views on Mixer are up very slightly, anywhere

from 2 to 5%. They're starting to move, but he

went there and the day he went there was dead

on arrival. Yeah, like he basically like his

stream would have an like an average of around

15 ,000 people watching at any given time now

he's I think Maybe a couple hundred maybe a thousand

or something with it. It's low. It's a fraction

of what it should be As for sponsorships, I think

he still has some left because it's not platform

dependent, but he's Deleted off twitch like his

channels no longer officially there. So they

basically dear jaundom His value on Microsoft

is estimated between three and five million dollars

per year for the next three years But yeah, he

essentially tanked his career be although they

have the ability said they have the ability to

get rid of that contract if they want to One

of the things he did do, however, is he brought

Mixer as a platform into the public consciousness

by brand association. So maybe they're getting

some of their money's worth through that interpretive

data. We won't really know until... For at least

a year. Well, if they're going to utilize them

properly, he better be used at the X event this

weekend. Yes, absolutely. If he's not and he's

not a huge part of their E3 platform, Then they've

lost faith in him Yeah, actually I i'd be I would

wonder if he'll do another stream At new year's

eve because he did that last year. He played

fortnight At the new year's eve ball dropping.

I forget on what network but he did it was sponsored

by twitch So if mixer has the money towards it,

I guess we'll wait and see but um Another person

jumped to mixer. I think shroud jumped and he's

another FPS guy like these are the outliers We're

like even though if they're if their success

fails if they were smart with their money They'll

never have to work a day in their life I do get

the feeling though that they're not because when

you see the setups and where they live and stuff

They're living like the money is gonna last forever

And that's that's a big mistake Well, and the

thing with them is they don't they they yeah,

they live it up and and that's part of the appeal

of them is because people are like, oh I could

be like so and so but it's not You got to realize

that it's it's still like first and foremost

a hobby that they're happening to get paid for

and it's and especially with how quickly the

internet turns on each other it can disappear

like that Well, yeah, because you have one or

two controversies and you could be canceled real

freaking quick. Well, you can say just the wrong

thing and offend one person and it sends the

whole domino going down. Well, one really good

public thing that happened in the last year is

Pro Jared and think of him what you will. I think

it's a scumbag and you could put me on record

with that. He had all these major associations

now and as far as I know, none of the major companies

have talked about him since. and he had dnd behind

him which is wizards of the coast which is hasbro

um and all those streams down in los angeles

he was part of a thing on twitch i think he's

coming back to twitch or has come back in the

last couple of months so cancel culture is a

real thing and it doesn't take much to get a

a thing behind i know ninja had a controversy

a couple years ago where he wouldn't play with

female streamers because he didn't want people

talking about it because it might offend his

wife or something it was some really weird freaking

reason and a lot of us were like Huh? It was

really dumb. I feel like he did it for another

reason, then made up an excuse, and then that

excuse was clearly not right, and then he got

in trouble. Yeah. But again, Ninja's a kid who

has only done this. Yeah, I don't know if he's

done anything else. I know he's like 28, so I

know he hasn't done a lot. If you look at anybody

that has made it for themselves and has become

super rich, You know what they do if you're if

you're super rich like a movie star You keep

the houses and all that but people that have

a good business plan live in a modest home Yeah,

and they they they drive like the rich some of

the richest people on the planet. Don't try to

use car Yeah, because that doesn't matter to

them. They want to hold on do whatever they want

with the money, but like What they're not realizing

is when this money is gone when their fame is

gone The way the fallback plan the way they they're

taxed for the next several years is based on

what your last few years income has been so if

you go from making three or four million dollars

a year from twitch or from mixer and then it's

gone guess what next year is next year even if

you have zero income you're now paying seven

hundred thousand a million dollars in taxes and

if you don't want to pay that and you can't pay

that you're doing time Like Wesley Snipes It

happens to movie stars even your your based your

taxes for many many times, especially It's a

good thing that a lot of these streamers have

no wives or husbands Because if they were to

get divorced they would be paying them based

on the lifestyle they became accustomed to So,

you know what? The secret is if you're married

and you're on and you want to get into streaming

live in a modest home Live poor. Live poor. Live

like it's your last dollar. Yeah, a lot of the

students that I know that are successful, they

live within their means. They're very smart with

their money. The only guy I know that I would

consider spend extravagant bought two nice cars,

but they're known to last for a while. One guy

bought a Tesla and because he's been big into

the environment, the other guy bought a Chevy

Tahoe, I think it is. But if things go Bottoms

up. He's got a background. They're not they're

not muscle cars and they're not you know, stupid

Ferraris, you know, yeah, like there's $3 million

signing bonus. I'm gonna buy myself a Ferrari.

Are you fucked? You could buy a couple homes

Like there's one guy or there's one girl I follow

on Instagram and she just randomly bought a Dodge

Charger which like this some kind of really expensive

Ford muscle car. And I'm thinking, and you only

do Patreon. How are you affording this credit?

Because they think the money is going to last

forever. And that's what we're getting to is

like, this is why if you're going to be a streamer,

or you're going to be a content creator, you're

going to be an independent contractor work on

your own, you need to do It doesn't have to be

years in college. You need to take two or three

very basic continuing education courses. One

on accounting, basic personal finance and accounting.

One on how to run your own business, basically

general business course. And then take one on

marketing. If you take those three courses, you'll

get enough that you will know when you're in

over your head and actually hire somebody to

help you. And that person will tell you, do not

buy a stupid car when you have no collateral.

That's why when you get to be like much older

you're like able to pay cash for a used car Yeah,

it's like you're not dumb about it Yeah, because

we bought a used car recently and we paid in

cash and got a good deal on it. So I mean, that's

what we've been doing for the last three cars

We buy them used and we we pay cash and that's

Cash is king Having a nice car having nice things

is you know, aesthetically nice But I've always

been more for like, is it functional and is it

comfortable? Yep. And if those two are there

and it happens to be something that's visually

appealing, then cool bonus. And if not, drive

that hunk of shit until it doesn't work anymore,

because at least it's getting you from point

A to point B and you didn't waste money recklessly

on it. Well, it's like it's like our minivan

we bought after we moved. It's got a couple of

dimples in it. It's got like one little. Slight

gouge in like the front bumper clip, but other

than that like the paints all there the vehicles

functional Everything's nice on the inside Doesn't

really matter. It's the outside. It's gonna get

peppered with hail anyway at some point and yeah

And then when that happens because Colorado gets

hit with hail a lot Because the elevation they

come down like golf balls or baseballs So yeah

insurance pays for all that so if that happens

and then get new body work anyway, but But yeah,

I mean it's it yeah people just don't think ahead

when it comes to any of that And the internet

is fickle and you need to yep But hey, it's better

than a ham sandwich Yes And it's that is that

the ending point for this episode? Yes, I think

so Better than don't spend your money like a

moron Yep. So how can the good people get a hold

of you online? Well, if you're looking for me,

you can find me. You can find the show at This

Week in Geek, but if you want to follow my personal

account, I am at birdman .on Instagram and Twitter.

I do respond to everybody if you're not a douchebag.

And yeah, I'm always around on the interwebs

in some capacity. Basically, you can contact

me through the show the same way, or alex .thisweekingeek

.net. That's the email. Deathface twig. Contrary

to Michael, if you're an idiot in a douchebag,

I will destroy you online. I will go nuclear.

I'm the nuclear option. I will extract your spark.

Exactly. And destroy you. I don't do it just

for fun, but if you're going to be a moron, I

will call you out. And he will too. So I can

be found on the Twitters and pretty much that's

where I hang out at SCP 21. So until next time,

get altered, get geeky with the Altered Geeks!