Chinese ecommerce outfit Alibaba have revealed that they lost "60 to 70 per cent" of their $20m investment in the World Electronic Sports Games (WESG).
This comes via an interview with the South China Morning Post, a newspaper that Ali Baba owns, and was picked up by the smart crowd over at Dot Esports. It paints a bleak picture for the WESG, but also reinforces something that the industry already knew: esports events cost a serious chunk of change.
"We lost about 60 to 70 per cent of that lump of money,” Wang Guan, the general manager of esports of Alibaba’s sports arm, Alisports, said to the paper. "But we reached about four million players.”
The event was huge, with tournaments for Counter-Strike: Global Offensive, Dota 2, HearthStone and StarCraft 2, and the finals took place in Changzhou’s Olympic Sports Center, where athletes competed for a $5.5m prize pool.
The event will be returning, and the $5.5m prize pool will remain intact, but Wang has mentioned that AliSports are hoping to reduce their costs by 73 per cent, and that this should ensure the company breaks even on the event.
How will they cut costs? Working closely with host cities, where the company will partner with cities and take a more hands-off role in organising the smaller events of the championship.
Esports is about 40 per cent of Alisports’ work currently, according to the image, with the company hoping to increase that to around 50 per cent in the future.