Choosing the Right Esports Business Model

David  Collis; Alexander  MacKay

Case | HBS Case Collection | March 2019

Choosing the Right Esports Business Model

Abstract

Two esports entrepreneurs must choose on which business model to focus their time and money. After successfully launching an online esports coaching platform, a number of new opportunities emerge in the rapidly growing esports space which now has close to 1 billion gamers and an online audience that is greater than the Superbowl. Should they focus on a B2C business, a B2B business? Develop an analytics capability to support "sabremetrics" for esports or a content creation capability? How can they best exploit ownership of the world's top team in the "Hearthstone" league. The choice will depend on the future industry structure and how the two can most effectively "follow the money".

Keywords: entrepreneurial ecosystems; business development; Business Ventures; Entrepreneurship; Business Model; Management; Strategy; Sports; Entertainment and Recreation Industry; Information Technology Industry; Media and Broadcasting Industry; Sports Industry; Video Game Industry; North and Central America; Europe; Asia;

Language: English

Format: Print

23 pages

Educators

Citation:

Collis, David, and Alexander MacKay. "Choosing the Right Esports Business Model." Harvard Business School Case 719-459, March 2019.

The concept of dynamic capabilities draws its theoretical basis from two classic traditions within the strategy field – the resource based view of the firm (RBV) (Wernerfelt, 1984) and market positioning (Porter, 1996)1. A dynamic capability qualifies as a source of sustained heterogeneous firm performance within the RBV framework because it arises from embedded organizational routines that accumulate in a path dependent process - the “stock” explanation of durable advantage (Barney, 1991). Because such a dynamic capability allows a firm to continually reposition itself in product market space, it satisfies the “flow” explanation of current competitive advantage by ensuring that the firm always maintains a wider gap between willingness to pay and cost than competitors (Brandenburger and Stuart, 1996). Indeed, dynamic capabilities seem to give rise to the enviable ability to “always have a competitive advantage in an attractive industry” and so continually deliver superior financial performance regardless of external circumstances.

“Tell me David, is it better to have a great strategy poorly executed, or a so-so strategy really well executed?” The age-old question suggests there is a fundamental tradeoff between strategy and execution. The tone in which it is asked typically flags that the questioner already knows the answer - the superiority of execution over strategy. But is this really true? Does, to borrow a phrase, execution eat strategy for lunch?

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Choosing the Right Esports Business Model

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