Inside Trayton’s chat with Gen.G CEO Arnold Hur: What esports is getting wrong?

In the latest interview by Jean “Trayton” Medzadourian, the French streamer chatted with Gen.G CEO Arnold Hur about the League of Legends esports ecosystem, why the industry is struggling, and some additional insights about the team he’s managing.

Who is Arnold Hur, and why does he think like an operator first?

Gen.G’s CEO career didn’t start immediately in the esports space. He initially worked in investment banking at Goldman Sachs before moving to consulting at Boston Consulting Group, tried his own startup, and eventually joined Google.

It was during his time at the latter that he slowly moved to League. Hur explained that he used to play the game and started out what eventually came to be Gen.G. “We had like four people in a conference room,” he said, “we didn’t have a social media manager. So I was doing all the tweeting.”

Building at startup speed, but the ecosystem is too slow

Trayton’s interview put a lot of emphasis on the current esports ecosystem, which has been undergoing difficulties for quite some time. The Gen.G CEO was quite blunt on what he thinks is frustrating in the space, mentioning how you want to operate with fast decisions, but the environment doesn’t let him do that: “It feels like sometimes you’re working in like government job rather than a startup.”

The incentives are also not aligned, especially when it comes to the League of Legends scene:

The incentives I will make more profit creating a losing team in League of Legends than I would creating a winning team.

This is because the current prices of the players (salaries) have gone out of control, making it a much more rational business decision to underinvest. Hur, however, stresses that it’s not only Riot’s fault: “It’s all of us … to blame for it.”

During the discussion, Gen.G’s CEO also revealed that he had three different Asian teams, including the LCK, trying to sell their team, and they couldn’t find buyers. Over time, recognizable organizations have walked away, and this is a sign that the entire ecosystem is struggling financially. Even in the West, UK-based organization Fnatic has been looking to sell the team for $100 million, making it clear that it’s becoming an issue across all regions.

Co-streaming isn’t the root issue: monetization is

Trayton also brings up the recent trend of co-streaming and how it has affected the entire viewing experience and ecosystem around esports. For Arnold, co-streaming is great, but the issue lies in the lack of monetization from it: “We’re not even trying.”

The issue is not related to co-streaming itself but the fact that esports content has not been packaged well enough and monetized to a level that can match its costs.

Twitch owned a monopoly on esports [and] couldn’t be profitable. That’s the original sin of esports that we still haven’t fixed.

The lack of strong economic results has also affected Riot, which, according to Hur, has cut its esports costs by around 40% over the past two years. On the other hand, however, the average team salary costs have gone up in the LCK, further suffocating organizations and even developing new talents.

There are fewer and fewer opportunities for new up-and-coming players to actually get into the ecosystem. Nobody is even paying for challengers players and you know tier two is [all gone]. Even in Korea, all gone.

From a team’s perspective, he would like to invest more, but he can’t justify the numbers at the current time. This is also why the CEO is hoping to bring more transparency to the industry, such as having all public salaries of players. “I would be in favor of each region publishing their P&L (profit and loss)”. He believes that if everyone can see what teams earn and spend, the conversations about fairness and sustainability would be grounded and not rumored.

TheShy “was on the list”, Faker not

The interview then sees Hur talk about the org’s culture and how Gen.G is “honest” with players about what the organization can and can’t provide while making them feel important during their time with the team. He also explained how Gen.G tries to help players with their mental health, as they are often under pressure from fans and criticism. That said, he explained that you can’t shield players from toxicity, but it’s more about having practical coping frameworks to work around it.

The CEO also dropped the big bomb when he unveiled that TheShy was among the players Gen.G tried to pick up a few years ago. Unfortunately, the budgets were very different between the LPL and the LCK, and Gen.G “weren’t even close”. Among the questions, fans were curious whether Gen.G tried to get Faker. Hur denied, saying that it didn’t make sense for both the player and T1, considering Faker is the face of the team and “of esports in general”.

Towards the end of the interview, Trayton asks for one of Hur’s best memories during his time on the team. He then tells a story about a player who had left for another org and later returned, telling him that his time at Gen.G “was the most memorable, the best season I’ve ever had”. For Hur, this is the philosophy Gen.G breathes: build something special, regardless of the results.

The new LCK season will kick off in January with the LCK Cup. If you haven’t followed the offseason, here are our grades on all the LCK teams’ roster moves.