Scout's insights reveal how some esports tournament organizers in India operate and generate revenue
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According to Tanmay “Scout” Singh, a well-known content creator and BGMI player in India, some third-party tournament organizers were asked by Krafton to stop hosting unofficial tournaments due to the dishonest practices of some tournament organizers. Scout shed light on how Indian esports tournament organizers generate revenue by partnering with popular Indian teams and brands. He explained that organizers host tournaments and rely on borrowed funds to offer the prize pool to participants. The tournament’s success is then used to attract popular teams such as Team SouL and TeamXSpark to participate, which in turn brings in lucrative brand deals and sponsorships, resulting in higher profits than the actual prize pool. Scout’s insights reveal how some esports tournament organizers in India operate and generate revenue, shedding light on the complexities of the industry and the different ways in which organizers leverage partnerships and sponsorships to monetize their events.
During a recent livestream, Tanmay “Scout” Singh shared his thoughts on the recent warning issued by Krafton’s Esports team to third-party tournament organizers to cease hosting unofficial BGMI events in the wake of the game’s unavailability. Scout suggested that Krafton may have taken this step due to the unscrupulous practices of some tournament organizers, noting that only a select few could be trusted. To illustrate his point, he described a hypothetical scenario where an organizer named XYZ promises to host a tournament with a prize pool of INR 10 lakh, despite not having the funds to back it up.
Scout went on to explain that the organizer would then invite popular teams to participate and make promises to pay the prize pool. However, when it comes time to distribute the prize money, the organizer approaches each team owner and asks for a loan, promising to repay the funds later. The organizer would then use the borrowed money to distribute the prize pool.
Despite this seemingly unsustainable approach, Scout suggested that this approach can still generate income for the organizer. He explained that the organizer would also pay the participating teams for their participation, which in turn can attract brand deals and endorsements, resulting in higher profits than the actual prize pool.
Scout’s insights shed light on the complex and often murky world of the esports tournament organization, highlighting the challenges of conducting fair and transparent events while generating revenue. It is clear that there is a need for greater transparency and accountability within the industry to ensure that players and organizers alike are treated fairly and equitably.
According to Scout, the use of borrowed funds to pay out prize money while also earning additional income from brand deals is a common practice among some esports tournament organizers. He explained that these organizers will use the participation of popular teams to attract brand sponsorships and generate more revenue than what is paid out in prize money.
However, with Krafton’s recent warning to third-party organizers to cease hosting unofficial tournaments, the future of esports tournament organization remains uncertain. It is unclear how long organizers will have to wait before resuming their activities. The situation highlights the need for greater transparency and accountability within the industry to ensure that both organizers and players are treated fairly and equitably. Despite the challenges faced by the industry, it is clear that esports has become a major force in the world of gaming and entertainment, and its growth and evolution will continue to be an exciting development to watch.
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