The Great Reallocation of Global Esports: From The International to the Esports World Cup

When Falcons, the champions of The International 2026, announced their withdrawal from Dota 2 just months after lifting the Aegis, many fans asked: how can a team that just reached the pinnacle leave the game that brought them glory? The answer, as I have observed over 10 years in this field, lies in a fundamental shift of the global esports economic structure – a great reallocation of power that not everyone has recognized.

The Collapse of The International Prize Pool Back in 2026, The International (TI) peaked with a $40 million prize pool, fueled by community crowdfunding via the Battle Pass. Only two years later, that number crashed to $18.9 million (2026) and around $3.4 million (2026). Most recently, TI has had only a few million dollars. This over-90% decline is not due to waning player interest in Dota 2, but stems from a product decision by Valve: changing the Battle Pass model, severing the link between in-game revenue and prize money. Valve transformed TI from a community event, where fans directly contributed to team purses, into a tournament with a publisher-determined reward.

The Rise of the Gulf While TI has shrunk, a massive flow of capital has poured in from the Middle East. The Esports World Cup 2026 – held in Saudi Arabia with a total prize pool of $75 million across dozens of titles – has become the new epicenter. Not only EWC, but also the Saudi eLeague 2026, featuring 37 clubs and over 4 million SAR in prizes. ‘Every big contract begins with a whisper’ – and here the whisper is Saudi Arabia’s national strategy to dominate esports as a tool for diplomacy and economics. Result: funds are being redirected from scattered prize pools to centralized mega-events, backed by state treasury rather than gamers' wallets.

Two Contrasting Pictures: Dplus KIA and Falcons Two typical stories illustrate the nature of this reallocation. Dplus KIA – the League of Legends champion at EWC 2026 – still faces financial crisis. Their LoL roster costs about 3 billion KRW (~$2 million) annually, but the cash flow is insufficient. They delayed salaries and sought a new owner. Victory could not save the balance sheet. Conversely, Falcons – despite winning TI 2026 – proactively withdrew from Dota 2 as a strategic decision. They entered 18 titles at EWC 2026, but found maintaining a Dota 2 roster no longer aligned with their ‘long-term sustainable operation’ goal. This is not a retreat from failure, but a reallocation of resources toward titles with higher commercial value, especially those favored by Saudi Arabia within the EWC ecosystem.

The Salary Craze and the Salary Cap Lifeline One core cause of the crisis is that player salaries have risen faster than revenue. During the boom years of 2026-2026, organizations bid up salaries to retain talent, but revenue from sponsorship, media rights, and tournaments could not keep pace. The LCK, South Korea's premier LoL league, had to impose a salary cap with a luxury tax – a redistribution mechanism where teams that exceed the threshold pay a tax to subsidize the rest of the league. This is a deliberate intervention to balance competition and ensure sustainability, rather than letting the free market adjust chaotically. ‘Valuation is interpretation, not calculation,’ and the LCK correctly read the moment to tighten controls.

Not an Esports Winter Many have hastily labeled this an ‘esports winter,’ but the reality is more complex. Money has not disappeared – it has just flowed into other channels. When the TI prize pool shrank, EWC grew. When Dplus KIA struggled, Falcons remained profitable through a multi-title strategy. The withdrawal of Falcons and the search for a new owner by Dplus KIA do not signal a collapse, but rather a transition of an industry adjusting itself to become healthier. Multi-title organizations with strong capital backing will survive; teams relying solely on tournament prize money and inflated salaries will be weeded out. As I once wrote: ‘Crisis reveals the true value of every deal.’

Looking Ahead This reallocation will continue. State-backed tournaments like EWC will increasingly dominate the calendar, forcing game titles to adapt. Salary caps are likely to spread if other regions want to retain talent. And the biggest question remains: will Valve learn from its mistake? Breaking the crowdfunding model has killed the community engagement driving TI, and without change, Dota 2 risks becoming a ‘second-tier’ title in the global tournament system. I don't predict – I verify; and the coming months will provide clearer answers.