Eight Reasons Why Esports Matter
Esports once represented a mere subset of sports culture. In a short space of time, it has grown into a complete industry in its own right, set to surpass USD1.5billion by 2023. These digitally-orientated sports have grown in popularity and clout to the extent that even the International Olympic Committee is taking note. We explore the rise and rise of esports in eight key areas of the industry.
1. The Games
At the heart of the industry are the all-important games. Esports comprise various games, both popular and under the radar, in numerous genres catering to differing player interests from strategy through to sports. In the esports world, there’s a video game, and related scene, for everyone. This industry includes not only traditional sports-related games like NBA2K and FIFA, but also, and more notably, major titles that have themselves become establishments in the business of gaming. While there is understandably debate about which games are the best, top names include Counter-Strike: Global Offensive, Fortnite, League of Legends, Dota 2 and Splatoon 2 to name a few.
Aligning with more mainstream sports, the International Olympic Committee organised the Olympic Virtual Series hosted from 13 May until 23 June 2021. The 10.5 hour stream to a global audience featured motor sport, baseball, cycling, rowing and sailing competitions ahead of the Tokyo games. In an official IOC statement, President Thomas Bach says, ‘The Olympic Virtual Series is a new, unique Olympic digital experience that aims to grow direct engagement with new audiences in the field of virtual sports. Its conception is in line with Olympic Agenda 2020+5 and the IOC’s Digital Strategy. It encourages sports participation and promotes the Olympic values, with a special focus on youth.’
2. Prize Money
Too much screen time is a concern for all parents, but teenage esports aficionados have proven their parents wrong by demonstrating just how much they can earn through online gaming. Professional esports athletes have been recorded as raking in six-figure salaries not to mention the ever-increasing prize money offered at esports events and challenges. Esports media outlet, The Esports Observer, in January listed the top ten esports games of 2020 by total winnings featuring Counter-Strike: Global Offensive as number one with USD14.75 million on offer. Number two was Dota 2 with USD8.87 million in prize money, and third was League of Legends with USD8 million. And these figures remained impressive despite pandemic conditions.
3. Players
Forbes reports that esport pro athletes have been growing more than 40 per cent annually every year since 1998, while the LA Times says eight million people log on every day to take part in gaming online. Teenage gamers are earning millions in the industry. US high school junior, Kyle Giersdorf, for example, qualified for the Fortnite World Cup Finals 2019 from a field of 40 million players and went on to beat 99 qualifying players at the Queens’ Arthur Ashe Stadium in New York to become Fornite’s first solo champion earning USD3 million in prize money – at the time, he was only 16. Danish, Johan Sundstein, now 27, is noted as one of the top esports players around with an estimated net worth in excess of USD 6million given his 2018 and 2019 Dota 2 tournament wins and related opportunities. He has been touted as one of the top five richest gamers globally.
Like Kyle and Johan, players typically specialise in a specific game and plough their time into developing their skills through reported hours of training each day. Notably, practically anyone can do it. Esports players are not bound by the usual sports considerations of height, strength, speed, etc. While good health helps, the normal parameters do not apply.
4. Audience Numbers
COVID-19 has brought disruption to every industry in the world. For the esports industry, the pandemic spelled positive gains given the influx in viewership on streaming platforms while the physical sporting world remained comparatively quiet with stadiums and arenas empty. Even before the pandemic, in 2016, more people watched the world finals of renowned esports game, League of Legends than the US National Basketball Association (NBA) finals game. The esports event boasted with a total of 43million viewers while the NBA game had but 31million viewers.
While stats vary from time-to-time, League of Legends remains the most watched eSport in the world. And the pandemic has not slowed things down. The 2020 League of Legends World Championships, held in Shanghai, became the second most economically impacting ‘sporting’ event in the city in 2020, according to a recent report by the Shanghai Sports Bureau. Despite restrictions on travel and tourism in the country, the event reportedly contributed USD4.6M in ‘direct economic effect’ and USD483,000 in tax effect. Predictions suggest that the global live-streaming audience will hit 728.8 million by the end of 2021, marking a 10 per cent increase over the 662.6 million who watched in 2020.
5. Investments
According to Newzoo’s Global Esports and Live Streaming Market Report, esports revenues are expected to continue their upward trajectory in 2021. The company offers in-demand market intelligence for games, esports and mobile. According to its report, the industry is expected to reach the USD1.084 billion mark in 2021, which translates to a more than 14 per cent growth from 2020. Furthermore, Newzoo anticipates that media rights and sponsorships will bring in USD833.6 million due to an increase in livestreaming audiences. Growth has been so immense and lucrative that big names from celebrities, sports stars, teams, news outlets and, indeed, investors have clambered to get involved.
EVOS Esports, formerly Zero Latitude, is an Indonesian-based professional esports organisation that has risen to high acclaim in the industry with a number of teams in different countries across various popular esports such as Counter-Strike: Global Offensive, Dota 2, FIFA and League of Legends, among others. Teng Jen Ang, EVOS esports’ chief strategy officer explains, ‘We’re fortunate that we’re in a fast-growing industry and currently the market leader in Southeast Asia. So, there was a lot of investor demand during our previous fundraise.’ Attention Holdings (ATTN), EVOS parent company, reported that it raised USD12 million last year in a series B round led by Korea Investment Partners.
The Esports Bureau has further reported more major investments recently. London-based esports organisation, Fnatic, announced last month that it raised USD17 million in a new investment round led by the Japanese conglomerate, Marubeni Corporation. Before that, in April, North American esports organisation, Beastcoast, closed its USD2.5 million pre-seed funding round. And before that, Indonesian EVOS esports, previously known as Zero Latitude, who currently has teams in Counter-Strike: Global Offensive, Dota 2, FIFA and League of Legends, among others, secured a USD12M investment.
6. Careers
The esports industry can offer lucrative career options from pro gamers and streamers to team managers and coaches – all with a seeming religious following. There are those that play competitively, and then there are those who livestream themselves playing, also known as ‘streamers’, who typically play more casually. Pewdiepie, for example, is a Youtube channel by 31-year-old Swedish Felix Arvid Ulf Kjellberg. The famous streamer has made a tidy six-figure sum and amassed more than 100 million subscribers to the channel.
Even education institutions are paying attention. In somewhat of a pioneering move, Saint Joseph’s University (SJU) in Philadelphia in the US has introduced an esports programme featuring a brand-new esports lab, academic programming for students interested in careers in the gaming industry, and the establishment of esports as a club sport within the athletics department. ‘Esports is a cornerstone of the future of sports globally and presents an opportunity for our students both academically and recreationally,’ explains Jill Bodensteiner, SJU’s director of athletics in Games Press magazine in 2020.
In Saint Joseph’s University Magazine, Jill says, ‘esports offers many opportunities for Saint Joseph’s. It will assist our students with preparation for careers in esports, especially in light of the fact that Philadelphia is emerging as an esports epicenter; meet the needs and interests of our current students, both academically and in terms of extracurricular activities; provide an additional reason for interested prospective students to consider SJU; and demonstrate the University’s commitment to the core principles set forth in our strategic plan: Thinking Anew, Acting Anew.’
7. The New Normal
The esports evolution has an all-important access at its core. High-speed internet penetration has catapulted a number of potential viewers and players online and connected them with other like-minded gamers across the globe. Video game contests can take place online at any time, feature both professional and amateur players, competing as individuals or on teams, in isolation or in front of audiences both online and in-person. The barriers to entry and participation are seemingly non-existent.
‘Gaming has been around for decades. What is new, however, is the improvement in technology. There is greater and easier access to the internet, which caused an increase in viewership,’ says Stephanie A. Tryce, assistant professor of Sports Marketing at SJU, in Saint Joseph’s University Magazine. The market’s success has led to the creation of many technology platforms, services, events, analytics platforms, and news outlets dedicated to the sport. Substantial investor capital surrounds this ecosystem as it continues to grow.
8. Future Focus
Long gone are the days when video games were relegated to a subversive, underground status. Having started as lesser-known online gaming on platforms like Twitch and YouTube in the early 2000s, the esports industry has seen astronomical growth. Acting anew has definitely been the prevailing trend that has spurned the industry. Esports have not only skyrocketed into the mainstream, but have done so with enough disruption to ensure major numbers in the audience and support and investment they are able to attract. The comparatively rocket-worthy rise of the industry has been noteworthy, but what’s more noteworthy is that the rise seems far from over.
Register to join WYN’s thinkTALK virtual session, Game On: Tapping into Gaming and Esports Businesses, on 27 July 2021.
Main photo by Sean Do on Unsplash.
