Dota 2’s annual championship, The International, has the biggest prize pool in all of esports – $21 million and counting. Unlike Overwatch League or the League Championship Series, The International doesn’t rely on big-name sponsors or media rights. Instead, it is almost entirely crowdfunded by fans, putting a democratic twist on professional gaming despite its massive scope. For fans, it’s the ultimate celebration of Dota 2, unsullied by corporate greed, even as it manages to pump more than $20 million into the game’s professional scene annually. But there’s another side to The International, one that makes Dota 2 a harsh place for tournaments, teams, and (most) players to scrape out a living. For all The International’s charms, there’s a lot of evidence that Dota 2’s premiere event is hurting, not helping, Dota 2 as a whole.

It’s about money. Esports ecosystems are complex, and the business interests of their participants (players, teams, tournament organizers, publishers, etc.) aren’t necessarily aligned. Tournaments make money one way; teams do another. Ideally, these business models wouldn’t work against each other, but in practice, they often do, and one way of understanding the history of esports is as a series of attempts to bring these interests into alignment. Franchising, as seen in League of Legends and Overwatch, is one strategy for doing so, though it comes with strengths and weaknesses. But Valve is up to something very different with Dota 2.

Based on the success of Steam, Valve takes a hands-off approach to Dota 2’s professional scene, imposing only the barest of regulations on its participants. Valve did not respond to Kotaku’s questions about the relationship of The International to other entities in Dota 2’s competitive ecosystem, but the company’s CEO Gabe Newell laid out the philosophy that drives his company in a 2013 lecture at the University of Texas: “Our job is to maximize productivity of users in creating digital goods and services. The markets will determine what the marginal value add of each of those activities are. The kinds of ways in which people create value and creativity and creating frameworks for that are going to vary.”

Valve doesn’t make products, in other words. It makes markets (of which Dota 2 is one), sits back, and extracts rents. By Newell’s logic, the machinations of the free market will eventually bring all of Dota 2’s participants’ interests into alignment. But it hasn’t always worked out that way, in part because of an International-sized intervention Valve makes each year.

Think of The International like a black hole. It warps the space around it, forcing everyone and everything in Dota 2 into orbit. It’s easiest to see the effects of this distortion when you look at third-party tournaments, which face the unenviable task of competing against an event that’s guaranteed to make all others look puny in comparison.

“It’s a challenging ecosystem that we struggle for relevance in, and, by we, I mean pretty much everyone – or everyone but Valve,” a senior official at a major third party tournament organizer told me last year. “When there’s $20 million on the line, you just can’t compete with that.”

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Though The International has always been the most important tournament in Dota 2, its relative importance has grown in recent years. From 2011 to 2016, as more third-party tournaments entered the scene, the percentage of the total annual Dota 2 prize pool concentrated in The International fell from 96 percent in 2011 to 55 percent in 2016. Over the last two years, however, that number has crept back up. In 2017, The International made up 65% of the winnings in Dota 2, and this year’s numbers look similar. This makes it increasingly hard for third-party tournaments to gain relevance in the eyes of fans and players alike.

Third-party tournament organizers like ESL and Beyond The Summit also no longer have the same options they once did for generating revenue due to changes in Valve’s policies. For years, such companies were able to use their own crowdfunding tools, like International-style compendiums and tournament-branded virtual goods, to boost their prize pools and allay the costs of putting on an offline event. But, in 2016, Valve stopped granting tournaments permission to do so.

“This matters for more than prize pools,” wrote prominent Dota 2 statistician Alan “Nahaz” Bester in a critique of the Dota Pro Circuit (DPC) late last year. “While Valve co-sponsors prize money for DPC LANs, third-party organizers can’t use crowdfunding to offset other costs of producing events as Valve does for TI … this often means there’s no room in the budget for amenities, such as upgraded travel and catered midnight snacks that players have come to expect.”

Tournament organizers and fans have different theories on why Valve implemented this rule, but the simplest answer is probably correct: year-round crowdfunding for third-party tournaments takes some of the allure away from the crowdfunding for The International, the event from which Valve profits most handsomely. When Dota 2 fans look at the consistent year-to-year rise in The International’s prize pool, many interpret the rising number as “growth” for Dota 2 in general. But, given the game’s declining player-base and income, there isn’t much evidence to suggest that the pie is growing. Rather, Valve is just taking a bigger percentage of the pie for itself. Out of context, that might look like growth, but it’s actually just capital accumulation.

As a result, third-party tournaments find themselves caught in a shrinking and increasingly ruthless landscape, forced to compete on unequal terms with one of the most profitable companies in the world. What results is a vicious cycle in which professional players depend more and more on The International, thereby devaluing the third-party tournaments that might free them from this dependency.

This dynamic also presents challenges for would-be team owners in Dota 2. Unlike franchised esports, Dota 2 has a very low burden of entry. Prospective team owners in League or Overwatch must raise millions for a franchise slot and agree to all kinds of rules about branding, staffing, and minimum compensation. But nothing is stopping anyone founding a Dota 2 organization right now, and paying the players whatever the hell they want.

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Yet despite the ease of entry to entry, few investors see Dota 2 as an attractive proposition. And The International is a major part of that. Because its prize pool is so large compared to what’s available the rest of the year, players are incentivized to pursue winning in Seattle (or, this year, Vancouver) at the expense of everything else, including the organizations that sponsor them.

This mismatch in incentives has predictable results. Speaking with Kotaku, Muriel Huisman, a Dota 2 coach who most recently worked for the Moscow-based organization Vega Squadron, described the conundrum teams face:

“The prize pool of this one tournament makes up about half of the prize money of a typical Dota 2 season, which means that a ticket to The International is worth more than performing reasonably well during the rest of the season … [as a result], players regularly break contracts and/or verbal agreements to play in groups that they think have a higher chance of qualifying, because even last place prize money is worth between three and six months of salary.”

That’s obviously not a good situation for teams. Besides the administrative hassle and expense of drawing up new contracts, creating new assets for players, or renegotiating sponsorships, this atmosphere leaves teams in a constant state of reactivity, making long-term strategic planning much more difficult. When your team can fall apart at any moment, there’s not much sense in making a five-year plan.

Players’ tendency to jump ship is a year-round threat, despite the piecemeal rules Valve has instituted over the years to dissuade them from doing so. The problem is most visible in May during regional qualifiers for The International. Teams that do not earn a direct invitation tend to implode, trading around players in a mad scramble to assemble a lineup for regional qualifiers. No other premier esport suffers this degree of instability, which is not a coincidence. It’s the natural consequence of the Dota 2 scene’s (lack of) structure.

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“Player salaries in Dota 2 are low because rosters are unstable, which limits sponsors in their ability to connect with an audience,” explains Huisman. “So the salaries stay low in proportion to the prize pools, and players keep (justifiably) prioritizing short-term gains over loyalty and long-term stability.”

What’s worse, players’ incentive to eschew everything but practice in hopes of doing well at The International hurts the bottom line of the teams that sponsor them, whose business model doesn’t only rely on earning prize money. “[Winning TI] is going to return more than any amount of livestreaming, content creation, or fan engagement really could,” said Immortals CEO Noah Whinston in an interview last year. “That’s not inherently bad, but it does mean that, for the things we care about as an organization, it’s hard to find players who care about the same things.”

It’s easy to blame the players for what might look like short-sightedness, but it’s more complicated than that. Dota 2 players have found themselves caught in what is effectively a version of the Stanford marshmallow experiment, in which kids got offered one marshmallow right away, or two if they could manage to be patient. Modern recreations of the study have shown that it is not willpower but socioeconomic status that shapes a subject’s choice. This plays out in the Dota 2 scene, too. Players caught in precarious positions will almost always prioritize short-term gain (prize winnings, especially The International) over long-term stability.

And why not? Professional players are never just playing Dota 2-the-game. They’re also playing Dota 2-the-esport, and signing with a team isn’t necessarily an optimal strategy. Players have good (if risky) reasons to eschew the teams that might otherwise lend stability in the form of salaries. But because of the constant threat of abandonment and Dota 2 players’ general reticence to do anything but practice, teams have no way of producing enough value to make an enticing salary feasible. It’s another vicious cycle.

Photo: Jakob Wells/Flickr

Defenses of the status quo in Dota 2 often point out that 49 of the 50 highest-earning professional gamers in history made their millions in Dota 2, almost entirely because of The International. When it comes to total compensation – winnings plus salary – Dota 2 players have the most money available to them in esports. But Dota 2’s monied upper crust shouldn’t present us from looking into the financial health of players outside of the top.

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Esportsearnings.com has been tracking prize winnings in Dota 2 since 2011, and while it’s an imperfect tool, it does a decent job of tracking the lifetime earnings of Dota 2 players. Among the top 500 players (a passable approximation of anyone who has ever played Dota 2 professionally), the average lifetime prize winnings is $288,196, or about $41,167 per year. That’s not luxurious, but it could be worse. The median earnings, however, tell a different story: the median earner, Julius “Julz” Deleon, has earned $39,041 since 2013, when he joined his first professional team, or $6,506 annually. Now, Julz might not be the best hard support in the world, but he is better than 99.95 percent of players. And yet, in terms of prize money, he is making what amounts to poverty wages in much of the developing world.

What’s more, of the $144 million in prize money awarded since Dota 2’s release, a full fifth ($29 million) has gone to a mere 10 players, and the long-term trend in Dota 2 is more money ending up in a dwindling number of hands. The concentration of wealth in the Dota 2 economy, in other words, looks a lot like the concentration of wealth in general at our present moment of historic inequality.

That said, prize winnings are only one part of a player’s total compensation, and monthly salaries are supposed to provide stability to players. But if salary data could be included along with prize winnings, the difference in total compensation between elite and average pros would likely be more unequal. Team Liquid, for example, told The Verge that player salaries range from $100-$200,000 per year, and that’s on top of their share of the winnings from The International, which they won last year. The only teams that can afford salaries like that are the ones that are already winning, since no one wants to sponsor or invest in a losing team.

For tier two Dota 2 teams, salaries drop precipitously and, in tier three, they drop to basically nothing. Disgraced ex-pro Freddy “SmasH” Sina once noted that his salary on the Peruvian team Infamous – then one of the best in South America – was a $90 a month. SmasH was later permanently banned from professional Dota 2 for match fixing, which he said he and his teammates were driven to by destitution: “There’s a point when you are close to shutting down due to desperation that you start to make bad decisions. Some people in the team had no money for food or to live on and what little we had to share was not enough to help them.”

Teams without dependable salaries are at a massive structural disadvantage, hurting their ability to practice effectively. Among poor teams, it’s not unheard of for multiple players to share a room, on couches, or air mattresses. Besides the obvious problems posed by a poor night’s sleep, this stressful situation can create team-destroying interpersonal conflicts. Food security, too, remains an issue in Dota 2’s tier two scene. In his (ignored) appeal to Valve for mercy, SmasH noted that his team ate cereal for most meals. Elsewhere, the Filipino team Rave once announced on its Facebook page that the team had at one point subsisted on eggs: “no win means no allowance for [the players], there was a time wherein they literally have to eat egg for a week just to save money.” In context, this story was intended to be read sign of how much adversity Rave overcame. But it’s also symptomatic of a system that is failing the people who make it possible.

How can such poverty exist in a scene with a $20 million tournament? Because unregulated markets in esports tend to do what unregulated markets do everywhere: push wealth to a smaller and smaller number of people, not necessarily as a result of merit, but due to structural advantage. Stories like SmasH’s and Rave’s poke holes in the idea that Dota 2 is a perfect meritocracy, and even call into question the scene’s competitive integrity. As Huisman rightly wonders: “How much does it really mean to be a good team if all your opponents need a day job to survive?”

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Photo: Jakob Wells/Flickr

The International didn’t produce this entire tangle of problems, nor can they be reduced to a single cause. They are systemic, and emerge from the interaction of different parts of the Dota 2 ecosystem over time. The International is not helping, though. It appears to be making the situation worse. The incentives of players, teams, tournaments, and Valve are not aligned, and The International consistently pushes them further out of alignment. Until that changes, there’s little reason to think that Dota 2 will stop being unstable.

The good news is that Dota 2 is not going anywhere. It remains one of the most popular games on Steam, and has respectable viewership on Twitch. The question isn’t whether Dota 2 will still be around in five years, but who will it serve? And what role will The International play in whatever future comes to pass?

On its current trajectory, the only real winners in Dota 2 are a handful of elite teams and Valve. Everyone else—tournaments, teams, and all but a few players—has to fight for scraps, or leave. But another Dota 2 is possible, and it is largely up to Valve, which could regulate this ecosystem if it chose to. This is the bitter irony of Valve, a company that makes a big deal about its “hands off” approach to esports compared to Blizzard and Riot, yet is nevertheless the center of the Dota 2 scene thanks to The International.

Fixing Dota 2’s problems wouldn’t have to mean doing away with The International. In fact, the most effective tool Valve has to better regulate Dota 2 is the The International, which could break the cycles it currently perpetuates. Valve could consider earmarking crowdfunding from The International for future use, funneling it to smaller tournaments, like Peter “PPD” Dager’s newly-announced North American Dota Challenger League. (Blizzard used a similar strategy to revive StarCraft II’s flagging esports scene. Crowdfunded “War Chests” not only increase the prize pool of premier tournaments, but set money aside for smaller ones as well).

Valve could also redesign the prize spread of The International to support teams that get eliminated early, or even those that came close to qualifying but did not. A million or so dollars taken from the top of the prize pool means a lot less to the winners (who, in all likelihood, can fall back on a handsome salary anyway). But for smaller organizations, that chunk of cash could put a roof over players’ heads, food on their plates, and fund practice hours for most of the year. It might even reinvigorate a game that is starting to flag. Earlier this year, Huisman suggested a better cycle for the scene: “more players who can afford to take a year off and focus on Dota 2 -> new talent -> a professional environment for them to develop and train -> higher quality of play and competition -> higher engagement of Dota players w/ pro scene.”

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Altering The International in these ways would, in all likelihood, take some of the luster off of the tournament and ask sacrifices of Valve, whether in the form of tempered (short-term) profits or an expense of labor. But it would set the game up for long-term success. In its current form, The International is an antagonist to the best version of Dota 2’s future, the one that supports the most players possible, building the quality of competition for years to come. If Valve focused on the long-term health of Dota 2’s esports scene, then maybe pro players would be able to focus on that, too.

Will Partin is a researcher at Power Play, a consultancy that educates non-endemic clients about esports.