Immortals GM lurppis: "No one in esports has found a way to monetize the fans"
The dust has settled after the highly-anticipated MIBR unveiling in São Paulo last night. Several hundreds of fans attended the event, at the Transamérica Expo Center, and thousands more watched the live streams and the TV broadcast.
After the partying and fun comes the hard work of building a sustainable esports brand on the back of one of the most celebrated rosters in recent esports history.
That work, in part, falls on the shoulders of Immortals GM lurppis, who was brought in in February to focus on "business operations, content, and event formatting".
The former 1.6 professional has remained involved in esports as an analyst and writer since his retirement while working with J.P. Morgan as an Investment Banking Analyst.
We sat down with the Finnish veteran to discuss his role in MIBR and how the organisation plans to re-invent the financial side of running a Counter-Strike team:
What exactly is your job going to consist of in the new organisation?
The General Manager title isn't necessarily like a sports GM-type, so my job isn't to make trades every week or get a new player in for less than the outgoing parts are worth. Basically, it's a General Manager title in the sense of traditional businesses. I'm in charge of all the business operations that relate to Counter-Strike across Immortals.
So what might that entail? You've talked before about also being responsible for content. What might that be?
I'm obviously not ready to reveal plans that we're not ready to talk about at this point, but whatever we do that relates to Counter-Strike falls on my lap. Whether it's the announcement event in São Paulo or potential future plans. It's also making sure that the team is doing fine in all regards. That they have everything they need from us to perform well and figuring out, well, anything related to running a Counter-Strike team.
I want to touch on that because there was some stuff going on with the players and their relationship with SK. Will you be there to avoid those kinds of things?
I think I'm mostly there for the business side of things. The Venn diagram of people who have real business experience and also understand esports is very, very tiny. Even smaller if you only look at Counter-Strike. So I think that's the actual value. I will say, though, that, based on the rumours, which I obviously cannot confirm nor deny, it does sound like the players had some sort of problems with the organisation, and I can say that I certainly would not want to run it that way myself.
With you and [Immortals CEO] Noah Whinston, it seems like the business side of things plays a big part in this new venture. What do you think you're going to be doing differently from the way other organistions have run things?
Well, it's a huge investment to bring in one of the best teams in the world. And from what Noah has said before, regarding what we're trying to do in Brazil, I think you can start to get an idea of what we plan on doing just based on the fact that we already hosted a ticketed event just for the announcement of the team. We're going to see what's possible within the realm of fielding a CS team and what can be done with it. We definitely don't want to be one of the teams who just pay players to compete at tournaments. We don't think that's a sustainable business model, and our plan is to see how we can stretch that and how we can actually make the numbers work. Which is something that I don't think actually works for any team.
That's my next question: There must be some sort of need in the market that you have identified. What is that?
The numbers just need to work. Currently, I think every Counter-Strike team is just burning loads of money. The higher the salary, the more they're burning. It's very hard to recoup the kind of money that these top players are getting paid. You hear the rumors about, say, Virtus.pro getting paid $25,000 a month. You do the math. That's a lot of money over a year - $300,000 a player and you have a coach as well - that's almost 2 million dollars right there. You'd need a lot of sponsors to make 2 million, so I'm not sure if that's currently reasonable. I think, realistically, you probably need to have other avenues of monetizing your fans. And frankly, I think it's a really interesting challenge because no-one really in esports has found a way to monetize fans. That's why, if you look at the graphs that show the difference between revenue generated per esports fan and revenue generated per NBA fan, the difference is huge. And bridging that gap, that's the interesting part about this job, how to make that work. Because no one has made it work yet.
Does that mean you're going to be paying the players less than other organisations?
If we were to offer them less money than others, then they might not have wanted to join our organisation. You have to operate within the realities of the market. The players have to be paid what they're worth. You pay for the results, the marketability, and all the other things, so I don't think it would be realistic to expect to field this team for cheap. So then the question becomes: "How do you generate more revenue?"
There are other organisations trying to solve that riddle. RFRSH, with Astralis under them, are also looking into this. Not saying that they're necessarily making money, but they seem to have some ideas as to how to generate revenue outside the regular ways. Are you looking at what they're doing in all this?
Our idea is to go beyond just sponsorships. It's more about what other revenue streams there can be. The risk to me, the only risk for the growth of Counter-Strike is that if there is a turn down in the economy and companies slash their marketing budgets, then that affects the scene right away or whenever contracts run out. So you have to find a way to expand the revenue streams beyond sponsors.
In all of this, in your quest for making money outside the old ways, why Brazil? Why is it that you think Brazil is the market to do this in, at least as a starting point?
We didn't start this top-down. We didn't compare all the different potential markets. If we had, we'd want to be in the US, I think. That's the best market for basically everything - the biggest economy, the highest purchasing power and things like that. So for us, it all starts with the team. And the team happens to be Brazilian, which means most of their fans are in Brazil, and that's why we think that there is a lot of untapped potential in there. We think that the things we do in the United States, we should be able to apply to Brazil. There are some gains to be had from that, we believe.
Plus, the fans are crazy.
Yeah, they're very passionate. I went to an esports conference in Rio two months ago and was very impressed with the number of people that were there from non-endemic companies. Just the interest in esports is crazy, we saw the speed at which the ESL One Belo Horizonte tickets sold out, for example, and the fact that coldzera and FalleN were invited to the show where they named the biggest athletes of the year in Brazil. These guys are actual celebrities in Brazil, and the interest that the fans have in this team is beyond anything I've ever seen in any other country for any other Counter-Strike team.