#Footnotes is Rachelle Riddle's weekly explainer column about what's going on beneath the surface of the world of gaming.
Yahoo Esports is shutting down. For over a year they covered esports news with consistent articles and unique video content but announced their closure recently with a heartfelt letter to readers and viewers. Travis Gafford, the head of Yahoo Esports Media, thanked the community for giving them the chance. Uncoincidentally, the news of their closure came the very day Yahoo merged with Verizon. Yahoo has been incorporated into Verizon's new section, Oath, and will focus on the traditional sports brand.
For a company like Yahoo, a little out of touch and dated, launching an esports site was a surprising move. Even more surprising was they did well, acquiring talent from across the esports sphere and partnering with ESL and Riot Games for content and events. Unfortunately, the rest of Yahoo was hemorrhaging money and they suffered through two email data breaches. Verizon started talks last year to acquire Yahoo, which just concluded for $4.5 billion. Alongside the esports closure, Yahoo is laying off 2100 employees, approximately 15%.
Gaming journalism in general is volatile. If it were just Yahoo shutting down their esports section in a vacuum or on their own, I wouldn't give it a second thought. Even shutting down due to budget cuts from Verizon makes sense. What doesn't make sense is closing down an esports section when Polygon just launched three new esports sites. This isn't just a simple case of cutting the low-performers. Esports and gaming is a growing industry, enough that Polygon can see the value in devoting resources for three new teams.
Short-Sighted In The Long Run
Shutting down an esports section may make sense financially when dealing with telecoms and communication services but it shows a lack of forethought. Esports is a steadily growing industry and the lines are blurring between esports and regular sports. Superdata valued esports revenue at $892.8 million in 2016 and expects it to reach $1.1 billion by 2018. Big brands like Coca-Cola and T-Mobile are getting involved with esports and even ESPN has dedicated coverage. Let me re-iterate that: ESPN, the quintessential sports network, sees value in covering esports. If that doesn't tell you where it's headed, I don't know what will.
Refusal To Change
Unfortunately, large conglomerate media companies still view the internet and games as inferior. Just look at their views on Net Neutrality. Esports is easy to ignore from a high enough corporate standpoint, but even if it's doing well it can still be gutted simply because those at the top don't understand or care.
The internet age has been steadily growing and there is a need to adapt to new models. We've seen what happens to those that refuse. Blockbuster went down in flames while Netflix is flourishing. Hollywood is rooted in physical DVD sales and trying to fight a losing battle when people resort to piracy if the content is unnecessarily restricted. Newspapers have tried resorting to paywalls to counter the loss of physical subscriptions.
It's Happened Before With Another Verizon Purchase
Back in the day, you may have heard of a little site called WoW Insider. At its heyday, they were getting 10 million views and were instrumental in the game blogging sphere. Polygon even cites WoW Insider as the inspiration for starting up. Yet AOL, who owned them, had no idea what they were or what they did. No, that's not an exaggeration. AOL executives remained largely ignorant of the site or its impact, constantly interfering to promote failed AOL ventures; like giving the site the insanely valuable three-letter domain Wow.com only to yank it for a Groupon-type site shortly after. With the right curating, WoW Insider could have gotten even larger.
But they were fettered by AOL's machinations, who routinely gutted their funding with metrics that only AOL understood (or may not have even understood themselves). In the end, WoW Insider became a shell of its former glory before being cast unceremoniously aside along with Joystiq and Massively in order for AOL to look good for its soon-to-be acquisition by Verizon.
Now Yahoo is in that same position, trimming away the fat in order to do things executives care about: selling ads. WoW Insider was reborn, unencumbered, with its staff as Blizzard Watch, but it's unlikely that Yahoo's esports crew can crowdfund themselves into a new esports site. With their experience, however, they'll likely get picked up by other esports outlets. It's just a shame that Verizon didn't recognize the talent they had or the way the winds are moving.
What do you think about Yahoo Esports closing in the face of a growing industry?