An eSports Introduction – time to get up to speed (before you get left behind!)

This is a quick (and hopefully interesting!) article designed to explain some of phenomena of eSports. If you are not sure if you are not sure if you need read this, ask yourself whether you know everything about or fully understand the following sentence?

'Drake and Ninja took over the World when they collaborated on Twitch. 'Ninja' saw more than 635,000 people concurrently watch his stream live with Drake and Travis Scott.'

No? Read on! This article will cover a number of areas that you can use to get involved with this incredible phenomenon and impress your friends / kids / business acquaintances with your knowledge!

Consider this: if I told you there was a competitive leisure activity with 54 million active participants, which analysts like Newzoo expect to be a $1.5bn industry by 2020, with arenas and stadiums filled, live streams going to millions, team shirts, teams sponsored by Premier League football teams and gamers with awesome handles like iceice, KuroKy and Monet was going on right around you, you’d think that sounded a little worthy of consideration, right?

eSport is also known as competitive gaming, professional video gaming or electronic sports, and it is growing exponentially but is still genuinely a mystery to many, but as its rise continues with it hurtling towards the traditions of mainstream viewership (and potentially the Olympics!), it is important to understand it as it is happening now, not in the future.

Despite an ever-growing list of great articles outlining the incredible rise of eSports, it is still not firmly in the public eye or recognised as a mainstream sport, yet. You probably won’t find many people in the pub or your office talking about it yet, but that is going to change.

Let’s start with some stats that explains why. In 2017, more than 111 million people watched the Super Bowl – a lot of people for sure, but according to the technology consulting firm Activate, more than 250 million people follow eSports competitions and, crucially, most of those viewers also play the games themselves; this is a highly inclusive world. Activate estimates that, by 2020, 70+ million people will watch an eSports final, far exceeding the likely viewership for American professional baseball, soccer, and hockey finals, and consumers will have watched 3 billion hours of eSports – totalling 10% of all sports viewing. eSports generated $493m in revenue with a global audience of about 320m people in 2016, the market research firm Newzoo reported last year.

The global eSports audience has two very interesting facets - reaching 385 million in 2017, the viewing audience is made up of 191 million eSports enthusiasts (expected to grow by another 50% toward 2020, totalling 286 million and a further 194 million occasional viewers). There is clearly some ground to make up in terms of the traditional sports metric of ‘total revenue per fan’ (encompassing all revenue streams such as direct consumer spending, sponsorship and media rights). The Newzoo report predicts that the average revenue per fan in 2017 will amount to $3.64, growing to $5.20 by 2020 – significantly lower than other global sports such as NFL and NBA basketball. Other industries are, of course, turning their attention to where the money is and the Newzoo report is at pains to disclude betting on eSports, however recognising it is a huge “blue ocean” of opportunity and something that already been around for many years.

Although I am sure a few people might be cynically minded saying ‘of course it’s not in the Olympics because it’s not a sport’, but there is a legitimately growing clamour for eSports growth to be recognised and included in the ultimate sporting competition, the Olympic Games. This has recently gained even more momentum with eSports becoming an official medal sport at the Asian Games in Hangzhou, China Games in 2022, with The Olympic Council of Asia (OCA) announcing a partnership with Alisports, the sports arm of Chinese retail giant Alibaba, which will initially see eSports join as a demonstration sport at the 2019 games in Indonesia.

The Asian Games are recognised by the IOC, and are reportedly the world’s second largest multi-sport event after the Olympics. Alibaba Sports Group announced a $150m investment in 2017, including investing more than $14.5m to help organise the World Electronic Sports Games in China’s Changzhou province, where approximately 60,000 players from 120 countries and regions competed for a $5.5m prize fund in January.

Physical attendances are large throughout the world; more than 40,000 people attended the 2014 League of Legends (there are estimated to be over 100m League of Legends players worldwide), World Championship finals in Seoul, and competitive gaming now draws millions of spectators to online platforms and real-world venues such as the legendary New York’s Madison Square Garden, the Staples Center in Los Angeles and the MGM Grand Garden Arena on the Las Vegas Strip. Over in sunny Nevada, the physical experience is being taken to another level entirely with the Luxor Hotel recently announcing that it will home the first eSports arena on the Las Vegas Strip. A joint venture between Allied eSports, eSports Arena, and Luxor-owner MGM Resorts International, it will transform an existing 30,000-square-foot nightclub into a multi-level e-sports venue, decked out like any standard sports arena and include an LED video wall, streaming and production studios, and gaming stations, all designed to attract more of these young people to its premises and get a share of its growing revenues. For example, the official account for the UK's biggest & best video game events EGX 2017, which takes place at the NEC, Birmingham each September recently revealed some eye-opening stats: as well as generating millions of impressions across its various platforms during the event (including, of course, mobile as a mainstay) of its 80K visitors, over 24K took part in a competition, giving us an indication of the ‘why’ of eSports. The number of people who enter and compete is over a quarter, which is true engagement. I am sure many people reading his this will struggle, as I did before I began to track this emerging trend some years ago, about ‘why’ exactly are thousands of people getting together in person to watch other people play computer games (let along the millions more watching online) but really, for the fans, it is no different than traditional sports attendance. It is exactly the same mentality as attending a rainy Tuesday night game in the football league - hard to understand perhaps, but not to diehard fans.

The online viewership is phenomenal. With 36m unique viewers tuned in for 2015’s League of Legends final between Koo Tigers and SK Telecom, this exceeded the 31m people who tuned in to watch the Cleveland Cavaliers, inspired by LeBron James defeating the Golden State Warriors in the NBA finals decider. Interestingly, that figure is also higher than the average of 27.5m American viewers for the Rio Games.

Although cable and network channels such as TBS, NBC and ESPN are regularly showing games, earlier I mentioned Twitch. Maybe you did not know that this app is “the world’s leading social video platform and community for gamers” with 10 million daily users watching other gamers play. The case here was one of the most major recent cross-over events, where the music star Drake and Twitch streamer Tyler "Ninja" Blevins smashed the world record for concurrent viewers on the platform, crossing the 635,000 mark, playing the popular game. Ninja is a megastar of his own right on the platform - the most popular streamer on the platform with over 3 million followers, and over 160,000 paid subscribers (creating an estimated monthly income of hundreds of thousands of dollars).

It’s not surprising that companies want a slice of the eSports pie. The 2016 championships of the role-playing game League of Legends attracted 43 million unique viewers, who watched a total of 370 million hours of players competing for $6.7 million in prizes via 23 broadcasts in 18 languages. At its peak, 14.7 million people were watching, and according to the eSports Marketing Blog, men aged 18-25 watch more eSports than traditional sports (I will post more on the some of the fascinating trends in terms of overall audience profile soon).

However, traditional sports leagues are also paying attention. eSports teams and leagues are now regularly receiving significant levels of sponsorship from major brands such as Gillette and Mercedes. With big brands embracing the scene, and betting companies already embracing eSports betting on a global scale, it’s possible that eSports betting alone is larger than the eSports economy itself (however, with such scale, comes corruption – reference this excellent article by Simon Hattenstone again at the Guardian on the subject). An interesting sign of its growing stature in a perverse kind of way!

Fascinatingly, ‘traditional’ sports teams create eSports franchises – and are duplicating their behaviours in those sports as well. For example, Manchester City recently signed the reigning world champion Kai ‘Deto’ Wollin to its eSports team (think Kevin DeBruyne basically!) after recently also acquiring Marcus ‘ExpectSporting’ Jorgensen, both of whom will represent the MCFC in PlayStation 4 (PS4) FIFA tournaments around the world. The players play in the familiar light blue Manchester City colours in tournaments and fan events around the world. Again, connecting to a younger audience is key; Nuria Tarre, Chief Marketing Officer for City Football Group, says of the team, “The growth in eSports over the past two years has been substantial and our growing presence in this industry has provided another way for us to connect with our global fan base, particularly our younger audience, and bring them closer to the club they love”.

This year, the NBA also announced it would be the first professional sports league to form an eSports partnership with Take-Two Interactive Software and the publisher of the NBA 2K video game, creating the “NBA 2K eLeague”, starting with 8 to 12 teams in 2018 (using actual NBA team names) that they hope to expand to all 30 NBA teams eventually. NBA Commissioner Adam Silver said of this, “Maybe I couldn’t play for the Knicks, because I didn’t have the physical prowess to compete at that level. But I do have the mental and physical prowess to compete as an egamer for the eKnicks”.

eSports immersion into the mainstream is also increasingly evident in the USA, with high schools forming teams and universities clamouring to be part of the action. Recently, the University of Utah announced it will begin to award formal scholarships to players who make their varsity eSports team - considered to be one of the first scholarship programmes for competitive gaming for a university in one of the National Collegiate Athletic Association (NCAA).

So how exactly is eGaming achieving this growth? One of the positioning comments from the report from Peter Warman, CEO at Newzoo is revealing: “eSports is not only growing exponentially as a new independent business and industry, it is also accelerating the convergence of various established industries. For brands, media, and entertainment companies, eSports provides a chance to capitalize on the favourite pastime of digital natives and Millennials: playing games and watching game content. With the arrival of live streams and events, gaming has entered the realm of broadcasters and media that can now apply their advertising business model to a market previously out of reach for them.”

With the report predicting consumer spending on tickets and merchandise will amount to $64 million in 2017 and it is clear that the audience is also participating, I hope this article has made things a little clearer for you. I’m confident you’ll continue to see eSports grow and grow, and potentially exceed traditional sports much more quickly than you might think.

Have a think about how you, or your company can get involved in franchises, as part of spectator sports, and how you are going to answer the challenge of providing compelling content and experiences to this audience.

Please note, this blog is entirely based on my personal views and opinion, and does not represent the views of any other company I do work for in the past, present, or in the future!

Thanks for reading - you can find me on Social Media @drgoevans