By Billy Studholme

Times are hard in the esports industry, particularly for teams. Through such a barren spell, the biggest teams are leaving behind the publishers that chose not to share their spoils when times were good.

Apex Legends has faced such an exodus of teams after EA, which together with the game’s developer, Respawn, halted plans to introduce a revenue-sharing initiative for in-game item sales with 20 esports organizations, according to six sources who spoke exclusively with Digiday.

Esports organizations have been unwilling to say too much; game publishers are the power players in esports, given that they own the underlying IP of the sports themselves. They make the final call on just about everything. As such, orgs want to avoid their bad side. What follows is a signpost for teams: esports titles with engaged publishers, pitching fair economic models, are far more inclined to attract and retain esports teams.

EA shut down talks of esports revenue-sharing from in-game item sales on Sept. 16, 2022, according to email correspondence to executives at two of the esports orgs that were involved with talks with EA. Specific details of the failed rev-share project have not been revealed or verified until now as the esports organizations were cautious to avoid ruining relationships with EA.

In esports, publishers rule the roost, given that they own the underlying IP of the sports themselves. EA, which owns Respawn, declined to comment on this story.

Since then, at least five tier-one orgs — Team Liquid, G2 Esports, Cloud9, NAVI and Spacestation Gaming, all of which were involved in these revenue-sharing talks for Apex Legends’ ALGS — have let go of their rosters and left the the esports title for good. While the first of these teams began to leave in September last year, executives involved have been reluctant to talk about it until now.

For months, EA and Respawn explored several revenue-sharing models of different scales for ALGS — or Apex Legends Global Series — according to several team executives. And while these talks were promising, a deal was never inked.

“It was more of a ‘trust me bro’ situation,” one executive said; “Rev-share for digital goods was always the context for all discussions there,” said another.

Re-negotiating efforts

EA and Respawn eventually decided against this. Instead they offered teams $60,000 each as a flat licensing fee — far below what teams felt was fair. For context, tier-one orgs, particularly in North America, can make $1 million or more per sponsorship deal per year. “I make that [$60,000] in one quarter in [game name redacted], times two,” said one senior executive at an org involved in the discussions with EA, in reference to a revenue-sharing arrangement at another title.

In response to EA’s offer, the teams collectively drafted a letter — led by TSM and Team Liquid — rejecting it.

“We are not comfortable with the proposed licensing offer, nor do we believe that the decisions made around it have been done so in good faith,” the letter reads, which was shared with Digiday. The letter was …read more

Source:: Digiday

Author: Aaron