Interview: The Business of Flash E-Sports
This Singaporean competitive gaming team has come a long way since its humble beginnings. Though it is now known as one of the best – if not already the best – local e-sports team, its origins and continuous survival are still not common knowledge.
In a region where many would considered gaming a vice rather than a hobby (much less a sport or a job), how has Flash E-Sports stayed afloat? We went behind the scenes with Terence Ting, owner and founder of Flash E-Sports.
How did Flash start (in terms of its finances)? How much seed money was needed to give it its kickstart?
Flash started in 2009. At that point in time we started more as a community organisation, not so much of a business. We were just testing the waters, trying things out. But as time went on I think we realised that this could be a viable business. So we put together our resources and came up with a capital fund to start things off. It wasn’t a lot, because to be honest it doesn’t take a lot of money to run something of this scale.
Then we started going into events, and that was when we realised – hey, we need more cash coming in. I can’t give you a ballpark figure but by then it was a five-figure sum.
I understand that Flash E-Sports is actually funded by your dad’s company, Flash Designs. What made your father decide to fund Flash E-Sports? There isn’t any co-relation between these two businesses.
At that time, I was making a personal transition from being a teenager to being a full-fledged entrepreneur. I was looking for ways to expand on existing ventures, and I thought of the e-sports team I was leading.
I don’t necessarily agree that design is a very different industry from gaming. What I feel is that if you look at gaming, and if you look at putting together an event, you’ll see a lot of design elements everywhere. Everything around in the Flash Dota 2 League has something to do with design – graphic design – and that is what my dad is good at. That is his core business module. And I knew at that point of time that he was looking at other ventures as well. He wanted to explore other opportunities.
So how closely has Flash Graphics supported Flash E-Sports?
It has supported us in terms of design work and collaterals. For events you need people who have actual experience in the design industry to put together banners – for our branding especially. Branding is very important for anything you want to do, be it gaming or any sort of business.
Besides the support in terms of expertise, quite a big portion of our capital came from Flash Graphics as well.
What about the Flash Dota 2 League? How much did you put into Season 1?
Not a lot. We actually had sponsors coming in to cover most of the cost. Our main partner this season is Alienware, and Alienware helped us a lot in terms of the venue and putting the event together overall. We had sponsors to offset costs so in the end our overheads weren’t very high.
Did you start the Flash Dota 2 League with any intentions to generate a profit?
No, but if you say that you start an event without any intentions of making a profit, it also isn’t right. I think this event was really geared towards growing the community, rather than towards profit-making.
Eventually, I think that if you want to do long term events management with a long term events plan, you will need to be able to see rewards coming in at the end of the day. It doesn’t need to be immediate, and I think that the best way to actually make money is to first give value to your customers. In turn they will naturally see value in what you’re providing and they will be more than willing to part with that dollar for what you’re providing.
But for the Flash Dota 2 League – will Season 1 make you enough profit to continue into Seasons 2 and 3 or do you already have money set aside for that?
We have money set aside for that, but I think the results from Season 1 have been very encouraging. Not just the response [from the teams] but also the cost needed to run this league. The costs are quite encouraging because this shows us that this is actually quite sustainable. It shows us that we might even be able to look at improving the prize pool in Season 2. I think that’s encouraging for both the gamers and for us.
What about your team, how much would you say it costs to run it on a monthly basis?
Some of our players are paid a monthly allowance. We have our own internal player structure in Flash, which we don’t discuss outside the organisation, but I can tell you that on the e-sports side of things, it doesn’t cost a lot of capital to run a team. Most of our capital is actually poured into events, especially for this year since we’re going heavily into them. That doesn’t mean we neglect our gamers, though. We also invest a lot of time and effort into them.
So what other incentives are offered to players who are not paid?
I think a potential player’s desire to join a team like ours stems from the prestige one can get from being a part of Singapore’s top professional gaming team. That is the kind of branding, the kind of feeling that we want to create when we invite a player to join our ranks. We have a very strict recruitment process so players only come into Flash on an invitational basis.
The first thing we want is for the player to want to join us. This is created mostly by our branding – our brand value and marketing. The second thing is our own internal player structure. A player coming into Flash will find that there’s a structure that you can actually work towards. This structure rewards people based on meritocracy, which is a very fair system throughout the world, be it in any organisation.
For us, the structure that we’re using right now is constantly looked at and reevaluated. The most important thing that we look for [during the reevaluation] is that the structure motivates our players to continue striving for long term rewards. At the top level of this structure, I would say the rewards are akin to that of a professional gamer’s. The conditions that we lay out are very similar.
These conditions that you speak of – do you find that what works overseas also works in Singapore, or have you had to tweak the formula to suit local needs?
There are definitely parallels. When you look at overseas models, I think there are similarities and differences. There are definitely some things you can put into the current local model that we have, but at the same time there are some things you have to discard.
Some of these decisions come down to cultural differences. There are certain things you need to tweak based on the culture and conditioning of the players here. A couple of factors that really play into this are National Service and the general sentiment towards gaming here. These are things you need to take into account when coming up with something like this.
Do you get your players to sign contracts?
Yes, but not all of them. Like I said, with the structure that we have, as you work towards the top, you’ll find that once you’ve scaled the top level you’ll actually be offered the opportunity to sign with us.
Let me just reveal a little bit about our player structure. So a player coming into Flash, unless he’s already very established with a proven track record, he’ll be coming into the team uncontracted, and will play for a period of six months to one year before he’s being evaluated for contract suitability. During this timed assessment, we want to make sure he’s committed to the team. We want to make sure he’s growing. And when we feel that he has reached a suitable level to be offered a contract, we will do so.
So this is pretty much your first event of the year – is it going to set the tone of the rest of the year? Are you guys going to go down the production and events route?
Like I said earlier, we’re really going to refocus our efforts into event management this year. Aside from our team of course.
When I first started Flash, it was with the vision of having events management and the e-sports team side by side. I believe that both complement each other very well, and that they’re both part of a very active ecosystem that the e-sports scene wants to promote. Without either, neither can exist. Without events, there wouldn’t be gamers, but without gamers there wouldn’t be events.
Going forward this year, I would say that the Flash Dota 2 League Season 1 really sets the tone for the rest of the year. It’s the first event of the year but at the same time we’re really using it to test the waters for the rest of our upcoming events. And I mentioned to you that we have a plan to brand it all under a unified e-sports league branding here in Singapore.
There have been attempts to do this in the past, but I feel that the scale and consistency of which we’re doing it will prove to be the difference.
Where do you see Flash going in five years?
We’ve projected it. We’ve looked at one year, two years, five years, even ten years. I can’t give you a definite answer. The ultimate aim, no matter how long it takes, is to be the face of Southeast Asian e-sports and to be on the level of teams like Fnatic or Evil Geniuses. Not just on a competitive level but also in terms of stature around the world.
There’s no doubt we want to strive towards that sort of global recognition.