Nexon CEO Owen Mahoney Has Little Faith in eSports

In a lengthy response to an analyst question about eSports, Nexon CEO Owen Mahoney shared his thoughts on eSports in general. He obviously isn't very optimistic on the market and suspects that others are getting a bit ahead of themselves when hyping it up. See his full statement below:

That’s a long topic, so let me try to simplify a little bit. First I’ll make a blanket statement that may seem a little silly, but I think our industry sometimes gets hung up on individual topics that over the long term don’t actually have a major impact fundamentally on the totality the whole industry.

Certainly people used to talk about Facebook games a few years ago, and we got asked a lot of questions about our Facebook strategy. Some of you remember those questions from the time of the IPO, and we said respectfully we have no Facebook strategy because we think Facebook is a terrible platform. That’s what we thought at the time, and it turned out to be true.

Now I’m not saying the same thing about ESports. I think ESports is very interesting, I watch ESports games sometimes myself. But I think the point that people miss is its primarily a PC environment, not a console or not a mobile environment, at least as of today, and for the foreseeable future and there’s a lot of reasons for that. So there seems to be a lot of discussion about ESports in Japan, but Japan is not particularly a PC oriented market. So I’m not quite sure why that is.

The second I’d say is that if you take one or two of the big games out of ESports, people would be a whole lot less enthusiastic and those games are League Of Legends, would probably be the biggest one and maybe Overwatch as well. But if you took one or two of those games out, I think it’d be a lot harder for a lot of the companies, for example, in California that are raising venture capital around these they’ll have a much harder time to do it.

And I also think at least internationally less so in Japan, but certainly in North America one of the things that’s driving all the discussion about ESports is, frankly there’s a lot of traditional sports franchise owners and other infrastructure that are very interested in this topic because frankly those sports are going away or are on the decline.

If you look at the statistics for Baseball as it’s been happening for some time. It’s more recently been happening in the NFL. The viewers’ numbers for the NFL has gone down from what I understand quite significantly. So if you’re a team owner or if you’re somehow, if you’re an agent or you’re somehow involved in that, you’ll look at the future and you say, well I can see the future, this is going away, I need to think about something new. What’s new? Well some of the big game executives are really pushing ESports, oh gosh; I better start buying ESports because I have got no future otherwise. That literally is happening.

So I think there’s a whole lot of reason why people are interest in ESports. Some of them are real, some of them are not. But let’s really backup to what is going on underneath and it’s a much broader discussion. The broader discussion is about viewing games, and viewing games is actually a pretty fun activity. I do it a lot myself. I have two boys they are 12 and 14, they both love to watch people who are good at playing games, view it. And sometimes that’s ESports, but often times it’s not ESports. It’s sometimes two guys on a couch making jokes while they play some game and they are broadcasting that over Twitch.

It can make for some very good viewing. And so I think people who play a lot of games, people who watch a lot of games, I’ve had several discussions around the industry and I think we’re all watching this pattern emerge that viewing games, other people who are good at playing games and commenting on them in the interaction between their viewers and themselves is actually really fun. It makes for a compelling viewing, and that I’m very, very excited about.

And in some cases that will come from ESports. I certainly watched a lot of great sports game particularly watching StarCraft in Korea 10 years ago. But a lot of things have to be in place for that to be a real business not just a lot of investment. So I don’t have a huge prediction about how that will be, but I am somewhat cautious about this.

Now as far as NEXON is concerned, NEXON has NEXON Arena in Korea, it seats about 550 people. We have roughly 300 events a year, and I would encourage anybody in this room to come, Seoul it’s in the middle of Gangnam is, part of the night life in Gangnam. It’s very, very fun to watch, great players, live play games.

But what we find in ESports is that players determine what will become an ESports game, the gamers themselves determine that, the company doesn’t determine that. And there have been a lot of examples where a company has designed what they thought was an ESports game and it just hasn’t worked out. So when you look at a game you have to watch what players are doing and are they playing and broadcasting that online. So those are a mismatch of different comments about the future of ESports. I’m not sure if that’s helpful but it’s certainly worth watching, it’s certainly a topic that’s worth watching. -Owen Mahoney, Nexon CEO

What do you guys think? Is eSports all hype? Is the industry getting ahead of itself?

Source: Nexon Investor Q&A Video. Transcript

Been playing MMOs since I first got my hands on Ultima Online when I was 12 years old. Played so many games from Star Wars Galaxies to MapleStory to DAoC to World of Warcraft. Long time League of Legends player too! I'm also Known as "ReMo" and "Remotay"

  • Ultimex

    Lol esports has only been getting bigger and bigger if it was hype it would've ended a few years ago. Even less popular titles like smite and paladins have a successful esports scene. Devs and publishers just don't know how to push their titles into esports. Alot of games die because there is no competitive pvp which is what alot of people look for. And some games that do have great PvP dont try to make it an esport. the way some see it is why should they compete in a PvP game, and try hard at it if there are no oppertunities? Even the shitty mobile mobas have success as esports.

  • lulSock

    If anything, this shows that he is a blind dev that has no future sight, and is the reason why nexon is failing outside of its mobile market. No faith in esports? PUBG and Fortnight hit the scene running. League of Legends, as he mentioned, is only getting bigger. Smite still breaks over 20k views during tournaments. Dota still matches the world wide audience of League during their major tournaments, and their qualifiers still result in a solid 50k+. Dungeon Fighter Online still throws huge global tournaments that are streamed yearly and has a large following, this is also the same game that they decided to ditch in the western market(and are now thanking for their Q4 earnings). Overwatch took off since it's conception. Fighters are now gaining traction with the inclusion of DBZ Fighter which is averaging 15k viewers, and the tournament just a couple nights ago had over 25k viewers. CS:GO still has a huge following for it's tournaments as well(a bit of an understatement).

    The reason a lot of games fail in the esports scene is because it's over-saturated. Nobody wants to watch a thousand different versions of LoL/Dota, nobody wants to watch a million different version of CS:GO. The game has to be unique in it's own right. It also needs to have various tools that make it appealing to watch, and good commentators that actually know what they are talking about. The game needs to have dedicated constant support, balance changes, content, etc to keep people interested and evolve the meta. None of this is ever provided by Nexon. Nexon just publishes a bunch of games and profits off them. They don't really support anything which is why they are full of lackluster games that are fading. They can brag all they want about their fourth quarter, but they are kept alive by the mobile market gambling practices, which will eventually bite them in the ass. Notice how small their online portal is becoming.

    This is very short sighted.

  • Jokester

    "But what we find in ESports is that players determine what will become
    an ESports game, the gamers themselves determine that, the company
    doesn’t determine that. And there have been a lot of examples where a
    company has designed what they thought was an ESports game and it just
    hasn’t worked out." Someone is still salty about Lawbreakers