One of the biggest esports tournaments in the world is underway in Vancouver. Through Saturday, 18 teams from four different continents are competing at The International 2018, the annual competitive gaming tournament for popular multi-player online battle arena game "Dota 2," with over $24 million in prize money at stake.
Among those competing is Team Liquid, one of the biggest competitive gaming franchises in the world at a time when the popularity of esports is surging. Team Liquid won the same tournament last year, taking home a whopping $10.8 million for the first-place finish — the largest esports prize ever handed out, so far.
More than 400,000 people around the world watched Team Liquid win the final round last year to clinch The International 2017. Those fans tuned in on a free livestream on the Amazon-owned video game streaming site Twitch, while thousands more filled Seattle's KeyArena.
The team has high profile investors like NBA legend Magic Johnson and AOL co-founder Steve Case.
It's nothing Team Liquid founder and co-CEO Victor Goossens, 35, ever expected when, as a teenager, he created Team Liquid as a website dedicated to the fandom around 90s video game "StarCraft."
"There was just no intention for that ever to be a business those years," he tells CNBC Make It.
Goossens started Team Liquid as an online gaming community in 2000, at the age of just 17, simply to describe himself and a small group of his fellow "StarCraft" enthusiasts, he says. By the following year, he had launched TeamLiquid.net as a community website for "StarCraft" fans to connect with each other and discuss the game. The site also provided news from the burgeoning esports scene in South Korea, where early esports competitions were already gaining massive popularity by the early-2000s.
Goossens started playing the sci-fi strategy game soon after it was released in 1998 by Blizzard Entertainment, and he says he was "one of the better 'StarCraft' players outside of Korea in those years." He started playing under the gamer handle "Nazgul" at small competitions around Europe, but the real action was in South Korea at that time, Goossens says. However it was difficult for Goossens to get news about the early competitive gaming scene there where he lived in the Netherlands with his parents.
"There was a lot of really cool stuff happening [in South Korea] when it comes to professional 'StarCraft' matches, but it was impossible to follow" from outside of the country, because the matches were only televised locally, Goossens says. He relied on fans and contributors who lived in South Korea and watched tournaments on TV to write recaps for his website.
For the first several years of its existence, Team Liquid remained an online community dedicated to "StarCraft" and the fledgling video game tournaments that were cropping up at the time. "That community site, between 2002 and 2010, was actually the way the Team Liquid name built and grew," Goossens says. "And all of those years they were entirely voluntary, hobby, passion."
In fact, the Team Liquid site boasted a network of roughly 100 volunteers, who performed tasks like writing about "StarCraft" and moderating discussion forums. But the site only brought in revenue of about $400 a month, Goossens says, which is why he needed to recruit volunteers who were passionate about the game.
Meanwhile, Goossens was trying to further his own career as a professional gamer.
"When I was 19, I finished high school and I moved to Korea and I lived there for six months being a professional gamer, playing on Korean television," Goossens says. "And, after six months… financially, it's not a great career those years."
He wasn't making enough money to keep going as a professional "StarCraft" player in South Korea. Even with the game's growing popularity, many of the tournaments were still only paying $50 to $100 to winners in the early-2000s, Goossens says. Instead, he returned to the Netherlands and continued running the Team Liquid website while also making a living as a professional poker player.
"It's the same gaming and competitive drive that brought me to 'StarCraft' and my focus there, and it transitions very well to poker," Goossens says of his career playing online poker between 2004 and 2010. While he will not reveal how much money he was making as a poker player, Goossens says it was "pretty lucrative" and it was enough to support him at the time.
He only quit playing poker after six years when Blizzard Entertainment released "StarCraft II" in 2010, with the sequel game triggering a resurgence of interest in the franchise at a time when the esports industry had grown to the point where Goossens felt it was time to return to professional gaming.
Team Liquid began recruiting its first professional players, aside from Goossens, and entering tournaments where the prize money had "definitely jumped up" since the early-2000s, he says. The biggest tournaments at the time offered cash prizes in the range of tens of thousands of dollars, he says.
To be fair, Goossens says he was feeling burned out playing poker after six years anyway — and he'd always maintained his passion for gaming and the "StarCraft" franchise, so the decision to go all in on gaming wasn't necessarily motivated by money. "Just the fact that something was there and it was growing, that was enough motivation for me," he says.
"Even those first few years, 2010 to 2012, of 'StarCraft II,' there was not much money involved there. You're talking about the entire revenue of our company those years was less than what top players are getting paid per year today," Goossens says, adding that the revenue figure at the time was "way under" $1 million, and more in the ballpark five to six figures.
(Goossens won only €100 for finishing first in a 2010 Steelseries Benelux StarCraft II tournament, while Team Liquid teammate Jonathan "Jinro" Walsh took home $6,250 the same year for winning a Major League Gaming tournament in Dallas.)
It soon became clear that the best way to capitalize on esports' growing popularity was to diversify Team Liquid's focus beyond "StarCraft." In 2012, Team Liquid signed its first players for Valve Corporation's "Dota 2," in which teams of players battle each other in the form of fantasy characters wielding axes, swords and magical spells. (The current five-man roster joined Team Liquid three years later.)
And in 2015 Team Liquid merged with the esports franchise Team Curse. That move added teams focused on the games "League of Legends," "Street Fighter" and "Super Smash Bros" to the Team Liquid banner, while Team Curse founder Steve "LiQuiD112" Arhancet is now co-CEO along with Goossens.
In 2016, a group of high-profile investors bought control of Team Liquid through the parent company aXiomatic, led by Golden State Warriors co-owner Peter Guber, Washington Wizards owner Ted Leonsis and Tampa Bay Lightning owner Jeff Vinik. In May, aXiomatic raised another $25 million in funding, bringing its investment total to roughly $41.5 million over the past year.
Esports brought in an estimated $1.5 billion in 2017, according to gaming industry researcher SuperData, and Team Liquid has emerged as one of the biggest gaming franchises in the world. Today, Team Liquid has more than 70 players who compete in tournaments for more than a dozen different video games, from "Dota 2" to "Counter-Strike: Global Offensive" and even EA Sports' "FIFA" franchise. Goossens himself has retired from competition to focus on running Team Liquid with Arhancet.
Team Liquid has taken home more prize money than any other team — more than $21 million, according to an esports tracking site. In June, Team Liquid announced its addition of five new players to compete in tournaments for the massively popular multi-player online survival game "Fortnite." The game's rapid spike in popularity since debuting in 2017 has been "really cool to see," says Goossens.
The fact that "Fortnite" developer Epic Games announced a whopping $100 million prize pool in May for its first professional tournament, an esports record, made it almost imperative that the leading esports franchises start fielding their own competitive "Fortnite" teams. In fact, Team Liquid player Jake "Poach" Brumleve already won a weekly "Fortnite" event on August 10 to share a $75,000 prize.
While Goossens would not share Team Liquid's overall revenue figures, he did say that the most important part of the franchise's business is currently its partnerships with sponsors, including Amazon's Twitch, beverage company Monster Energy and gaming hardware companies like AlienWare and HyperX.
In fact, AlienWare partnered with aXiomatic to build Team Liquid's 8,000-square-foot, $1.5 million training facility in Los Angeles, which opened in March. The team's AlienWare Training Facility features state-of-the-art gaming PCs and other hardware from AlienWare in players' training rooms, as well as an on-site chef and cafeteria for the players and a production studio for Team Liquid's content production company, 1UP Studios.
Goossens calls Team Liquid's training facility "the most beautiful location that any team has" and he notes that the franchise is already planning a second location in the Netherlands. "The players used to just play and live in the same place," Goossens says. The impressive facility is an "amazing" reminder of how far Team Liquid, and esports generally, has come since just a few years ago, when even professional gamers often lived and trained in shared houses and apartments rented by the team to save money.
Another sign of esports' growth and future potential is Team Liquid's partnership with global software giant SAP to develop an analytical software that can collect data in real-time while gamers play. The partnership only began four months ago, so the software is not fully developed, but Goossens says SAP already provided some insights to Team Liquid's "Dota 2" players ahead of this week's The International tournament.
SAP Technology & Innovation Lead Milan Cerny led a team that analyzed Team Liquid players' gameplay during preparation for the tournament, with Cerny telling CNBC Make It that SAP's software can already ingest game data to analyze the abilities of certain game characters, and the ways that players use their characters' abilities in conjunction with one another, in the hopes of giving Team Liquid more insight as they plan out a tournament strategy.
As esports' profile continues to grow, and the stakes and prizes get larger, more and more teams will look to advanced data and analysis for a competitive edge, and Goossens wants Team Liquid to stay ahead of the curve.
"I think that when it comes to analyzing strategy in sport, it's part of being in a competitive environment," he says. "You always have to take the next step to be ahead of your competition."
After Team Liquid and SAP announced their partnership in April, Goossens attended a meeting of SAP's sports partners, a group that includes the likes of the NBA and NHL along with the New York Yankees, the San Francisco 49ers and other teams looking to use advanced data to gain an edge over their competition. The partnership with SAP is an important part of Team Liquid's future, Goossens says, but it also shows just how far the franchise has come over the past 18 years — from a fan website run by volunteers to standing beside the Yankees.
"[It's] overwhelmingly positive for us to be associated with a group of teams like that," Goossens says. "I couldn't be more proud."
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