Alibaba Sports Group Pledges $1.5 Million to DOTA

Alibaba Group’s sports promotion company, Ali Sports, launches an eSports division and pledges significant dollar amounts to CS:GO and DOTA 2.

Alibaba, not to be confused with the 1001 Nights character,  is a megalithic Chinese company primarily involved with internet based services, though they’ve diversified in recent years to have their fingers in several different pies, so to speak. They have divisions dedicated to media production, health care, navigation – yeah, these guys are a big deal.

Their most recent move on July 26 partners them with the International eSports Federation (IeSF) in an attempt to strengthen the eSports community and make competitive gaming “a way of life.” To this end, they have pledged $5.5 million to the prize pools of various gaming leagues (DOTA 2, CS:GO, StarCraft 2, Hearthstone) and over $149 million in investments. They even want to build eSports dedicated stadiums across China. Pretty rad, right?

Stunning track record, for the few steps you’ve taken

I’ve seen several posts about this particular influx of dollar bills into the competitive gaming scene. Everyone seems to take this is a good sign – and it is! At least is kind of is. But those other sources have only covered the fact that this partnership has been made, not any of its implications. So let’s take a look at those, shall we?

As major commercial companies like Alibaba start taking the eSports scene seriously, other companies will mobilize, too. No one wants to be left behind, and everyone wants a piece of the action while the getting’s good. Even those who don’t believe in the eSports scene will still be attracted to it, if only to get some trickle down from Alibaba’s investments. This is great news for eSports, especially if markets outside of China start becoming concerned they may be missing out on something.

One of the greatest hurdles in eSports has been investment. Investors are notoriously risk averse. They’d much prefer to put their millions and billions to work steadily accruing profit on a sure thing rather than take a risk on a volatile market. And “volatile” is the perfect word for eSports today.

There’s almost no central regulation (looking at you, Valve), teams are born, die, and reborn with a different name faster than you can say GG, players swap between teams or, in some cases, leave DOTA entirely for a new competitive gaming pursuit only to return at a later date. Sure, eSports in general and DOTA in particular is growing every year, but it’s still in its infancy. Do you really think a major investor is going to contribute to a DOTA tournament that might turn into an embarrassment (coughShanghaiMajorcough) over the 96-year-old, $12 billion earning NFL?

But since I’ve mentioned Shanghai, I might as well shift gears to the bad news. You had to have known this was coming. With the good always comes…

Next: Bad News, but Not Too Bad