Silicon Valley's tech-savvy approach to focused and deliberate business fused with South Korea’s esports culture and history—what more could you ask for? KSV Esports is exactly that, and at the head of it all is Kevin Chou. Chou came to prominence with his leadership and prowess in the gaming industry. As the co-founder and CEO of mobile game giant Kabam, Chou now takes that same philosophy and approach and is applying it to the esports realm, more specifically the Overwatch League. KSV has recently and quickly become a leader in the space when they signed the core of the Lunatic-Hai Overwatch roster and signed the former Samsung Galaxy roster under the KSV banner. Chou took some time out to speak with Esports Heaven about the business side of competitive gaming and what exactly do CEOs look for when they are looking to invest in an esport?

What has been the most exciting thing for you watching the Seoul Dynasty win big in the Overwatch League? Does it feel surreal at all, seeing all the hard work finally put to the test and is succeeding?

“I’ve been super excited, I think all the owners [are]. I was at an industry dinner and a few of the other owners happen to be there and we were talking about the numbers in terms of viewership versus our expectations. I think all of us are literally over the moon, in terms of what the viewership numbers look like. I think if I were to take the collective pulse of the ownership group, we were hoping for 100k viewers for the opening night and around 50k for a regular season match and we are clearly exceeding that. Obviously, we are still early in Week 2, but certainly the opening day numbers and the numbers from last night of Day 1, Week 2,  we are very happy with.

Probably what we are more excited about is just how fantastic it’s been working with the league. I think the league and ourselves, in the ownership group, are very aligned in terms of growing the viewership and growing the engagement of the audience. Some of the things that the teams and I’m working on with Seoul, other owners are doing different activities in their markets, to what the league is doing; incorporating the game, the game updates, into working on how the viewing experience is going to work—unfortunately, I can’t talk about the details, but it’s all really cool stuff.

I think what is happening right now with Week 1 and Week 2 is just the very beginning. So, expect over the next 6 months as the season goes on that there will be some really interesting new ways we bring engagement to the audience, that the team owners, the league, and Blizzard are all working together to do.

Overall, we are very, very, excited.”

Ultimately, what guided your hand when it came to signing the former Lunatic-Hai roster for the Seoul Dynasty?

“Well, each team owner may have a different strategy going in. My strategy going in was to—in baseball terms—we’re trying to be a little more like the Yankees and less like the Oakland A's. Less Moneyball, less ‘shoestring budget’ and more ‘how do we put together a leader in the space?’ My mentality and my philosophy is more [that] being a leader in this space allow us to bring more innovation to the business side. Because if you're the 6th or the 12th team in the league, you’ll have fans, especially if you cultivate the stories around your players and so forth, you certainly get to do less.

You can’t push a new way of fan engagement, you can’t push new business models, you can’t push new types of events that you may want to do with the fans and have that be apart of the business model. Whereas, for us, we think ‘how do we put together a great team that is going to come out of the gates with this new Overwatch League? How do we put together a team that fans are going to love and love watching us play’, but we're always going to try and do a lot of innovations in the overall business model and the fan engagement, as a team owner.

So, I think those two things - trying to put together a great team as well as putting together some new and interesting fan engagement activities. For example, we had a ‘send off’ event for our fans which we sold 1,500 tickets with prices ranging from $20 to $100 - and that was really innovative for someone in the esports space to do that type of event. We could only do that if we have a great team that people want to rally behind and engage with.

The third thing though I would say, in terms of picking up Lunatic-Hai, was just the cultural aspect. I think for people who know me, I very much value a strong culture in teamwork and that partial means a drama free zone. And in esports and traditional sports, players can be incredibly good, they could be incredibly popular, but they may have trouble creating a good team dynamic together. We’re trying to be like the Barcelona, where we try to focus on beautiful team and gameplay. That’s kind of how we think about it.  And Lunatic-Hai was always famous for their teamwork. I just love having a core team be super strong, having worked together for over a year. competed at a very high level, and then [we] build around that. And if you look at the team now, we actually have six players that were not [from] Lunatic-Hai and then we have the five core Lunatic-Hai players.

So, I am very happy with how it’s all turning out right now.”

To help contextualize things for people, what does a CEO look for in a new or upcoming esport that would make them interested in investing their time and money? Are there any specific esports titles where you’d like to see KSV venture into next?

“So, we look at the popularity of the game itself, because today, esports is a slice of the playing population. So for example, looking at League of Legends, the viewership numbers are fantastic and the game has been out for a very, very long time. So, the viewership now actively includes people who certainly don’t play the game. My view is that there are a lot of people who may have actively played the game and are no longer playing the game, but are still watching the esport quite avidly.

Also,because the game has been around for so long, there are people who watch the game who have never played the game or some who have dabbled, but never really engaged with the gameplay itself. As esports and sports gain longer life cycles, it brings in an audience who is interested in the story and in the energy, or maybe they have friends or family that are really into it that kind of pull them into it. It’s really important for a new esports league to have a game that is incredibly popular so that there is an interesting and underlying infrastructure that we can build around, and my view as an esports team owner is that our job, right now, is to deepen engagement with an existing game.

It’s really hard for any esports team to say ‘Hey, I’m bringing a new audience into the game.’ Obviously, if we could do that, it would be a great ecosystem, but as a team owner, my job is to take anyone who is interested in Overwatch and deepen their engagement with the game and broaden that engagement from just playing the game to following the teams, the players, all of the stories, and all of the personalities from the Overwatch League.

So, I think as we talk to other game publishers, I am looking for another league and a game publisher that understands what their role is and I understand what my role is; that way, I think it becomes a great partnership. I think when we look at a game that might not have a great player base already or has a less player base, it’s not a great way for my team to get involved.

The last thing I think a lot about is that our specific strategy in the marketplace is to be a global company, and even double-clicking on that a little bit, is to bring Asia esports - global. So, if you're a game publisher and you're trying to work with a Korean team or a Chinese team and you're a Western publisher, it’s difficult. I used to run a gaming publishing company and it’s very difficult to run operations in Asia and we can be an interface.

For example, when Blizzard is trying to work together on a new initiative in Korea, they can call me up and say ‘Hey, we’re trying to do X, Y, and Z in Korea. What do you think about working together on this?’ That way we can break it down and figure out how to get it done together and that is very difficult if you're trying to communicate with an Asian management team.

So, a big value proposition I bring as a team owner is that we’ve hired a great leadership team in Korea, we can be an interface between Western publishers and Korea as well as Shanghai, so we’ll be investing in China quite a bit - more news on that soon. Specificity we're running a global esports team that is creating marketing and content for fans globally. That’s our specific strategy in the market.”

That being said, we have also seen many traditional sports franchises and tech companies make their way into esports. Do you think that trend will continue through 2018 and into the future?

“Oh, definitely. I can tell you that in terms of the interest in becoming an Overwatch League team owner, the team owners are involved in that somewhat, so there is a lot of interest. So, it’s amazing to see. And like you said it's coming from traditional sports and it’s coming from family offices and families in general from all around the world. So, it’s just really fantastic to see the ownership group be pretty diverse among sports teams, traditional esports teams, I’m pretty unique in that I come to the gaming industry.

But what I’m seeing on the horizon is different types of business owners much like you see a Steve Ballmer (current owner of the Los Angeles Clippers) or Paul Allen (owner of two professional sports teams: the Seattle Seahawks of the NFL and the Portland Trail Blazers of the NBA) going from being in business to running sports teams. Or Mark Cuban for example, and bring a lot of different perspectives into the ownership group for esports. I think it’s going to be fantastic and really grow the whole industry quite a bit.”

One thing I’ve noticed that varies between esports organizations are their approach to supplementary content around their teams and players. From a purely business perspective, how important is “shoulder” content to an organization and how important is that content to building a successful brand?

“It is probably the single most important thing.

I think this is where esports have such a natural advantage over traditional sports in that there is a lot of another type of content, and don’t get me wrong, there is some really cool shoulder content that traditional sports is starting to develop coming especially from the NBA, and I think in esports there is a lot more content and ways to engage with the teams you love and I see that passion and that engagement just be one of the keys to why esports has grown as much as it has, but also will continue to keep fueling that growth in the future is that a fan has so many different ways to pull a fan into caring about what we're doing. Whether it’s the competition itself or it’s showing the practice or some of the solo queuing that the players are doing.

One of the most popular things that we did recently was when we took our team to the beach because they’ve never been to the beach. So, a lot of the players have never seen the ocean. So, we took them to the beach and the players loved it and the fans loved seeing the players in that environment and just being along for that journey especially a lot of our fans in Korea because they’ve just never been to the beach!

So, it’s really fun to do this type of shoulder content and help different types of fans engage with what our team is doing. It’s a ton of fun to produce and it seems to be working in terms of engagement the fan base.”

Lastly, coming from a big business background and as a CEO, what is one major thing that needs to be addressed in esports globally, from the business side of things, to see another major growth happen?

“The short answer is that there needs to be some sort of direct consumer model.

So esports teams need to figure out how they deliver value to fans in a way that fans pay for something special. For traditional sports, it just kind of evolved, that if I am a Giant’s fan or if I am a Warrior’s fan, I just go over to Oracle and buy a ticket and I go watch the game and I buy the merchandise. I pay for parking, consentions -  that kind of stuff. There is that way I can engage with a traditional sports team and that's how sports grew up.

In esports we have this very unique challenge where most esports teams have prize money, they have sponsorship, and they have streaming deals. And most don’t even have all three of those. The thing that is missing the most in terms of creating a really sustainable ecosystem is creating value for fans.

As most people know, there are a lot of teams that are not profitable and that's understandable in the early days of the industry. However, I think the promise of esports and its sustainability is going to be a Business to Consumer business model where a team delivers value to fans all over the world which drives a reasonable revenue stream. Esports is uniquely digital unlike the physical nature of traditional sports, and no one is taking advantage of this yet. When the right Business to Consumer model comes to fruition, the esports industry will explode and overtake traditional sports as an industry. The question is, how do we create the unique experiences that deliver this type of value to fans? Because if we can do that, then we can invest and create fans all over the world and we can create a unique experience for these fans.

That can’t be ‘Hey come to the stadium’, because if you're in the Philippines your not going to fly to Los Angeles - well you might fly to Seoul, but regardless it’s not one of those things that you can just drive out to a game every Saturday. So we have to find a way to create a digital experience that is unique and delivers value to the fans in a way that there is some sort of direct consumer model that augments the overall revenue base. From that we can continue to do great things and invest in the players, invest in the infrastructure, investing in our training facilities. I think that is the number one thing that is missing in esports right now.”

Joseph “Volamel” Franco has followed esports since the MLG’s of 2006. He started out primarily following Starcraft 2, Halo 3, and Super Smash Bros. Melee. He has transitioned from viewer to journalist and writes freelance primarily about Overwatch and League of Legends. If you would like to know more or follow his thoughts on esports you can follow him at @Volamel.

Images courtesy of Blizzard Entertainment, Kabam, and KSV eSports.