Japan is a hard nut to crack when it comes to competitive gaming and Esports. On one hand you have a country with a deep appreciation for gaming and the opportunity to make a huge cultural impact with your brand. On the other hand you have a lot of old laws and regulations that make almost anything tied to a cash prize very complex to execute.
Both hands of the situation came into play with the EVO Japan event. The public loved it with over 7,000 attendees but regulations against prize distribution put a much larger need on sponsorships that EVO couldn’t make up. The regulation in question was one that states player payouts can only be 20 times the entry fee paid. That makes prizes very small compared to every other region. To get around this requirement EVO made entry free thus recovering nothing from their 7,000 attendees. If you consider an average spending of $75.00 per attendee ($55 for competitor passes and $10 per additional game enrollment as a typical bar for that average) EVO lost a theoretical $525,000 USD in attendance alone.
Hopefully Japan will re-visit some of it’s laws to make competitive gaming a reality for their nation as it is for most of Europe, the US and South Korea in the future.
Staple FGC website Mad Man’s Cafe translated and broke things down even further.
“According to financial reports by Hearts United Group which runs the EVO Japan tournament, the event made a loss of 124 million yen (approx. $1.13 million USD), contributing to the group’s decline in operation profit for their fourth quarter. The company in its statement noted that while EVO Japan was a huge hit with over 7,000 entrants, sponsorship income came below expectations while running costs surmounted beyond their planned budget.”