E-Sports: The billion-dollar industry, and how it came to be.

27

September

2016

5/5 (2)

You’ve read articles about this topic before. Facebook posts and VICE documentaries hailing e-commerce as the ‘next big thing’. That one friend who dressed up as Legolas for your high-school Halloween party shared a Buzzfeed article about it once. It made grandiose statements about computer games in the Olympics, and the death of traditional athleticism.
‘Fat chance’ you thought. Modern sports have been enjoyed for centuries, why should anything change now?
In 2016, conviction on the longevity of e-sports is no longer optional – the phenomenon is here to stay.

Estimated at a market value of almost a billion US dollars (Grubb 2016), e-sports is by far the fastest growing facet of the entertainment industry, and most analysts agree that it is only going to get bigger.

The Legolas cosplayers have been replaced by billionaire investors, and the streamed events have ousted long-standing entertainment giants like the World Series and the NBA finals in viewership.

But how did this happen?

The first step to understanding the monumental shift occurring in sports entertainment today, is acknowledging that the average viewer has changed. The gamer stereotype of yore is dead.
The pale, socially awkward boy living in his mom’s basement has been replaced by a working adult in his mid-20’s, earning $30,000 a year (Casselman).
Unlike the pale boy, the modern gamer has a significant disposable income, and corporate advertisers take notice. Omnicom, a marketing agency, named employed 25-year-olds the most profitable target demographic in terms of advertising returns (Marketing Interactive 2016) and video games are quickly breaking into the top-4 facets of personal entertainment in terms of generated value (Kresse 2016). E-sports associations have leveraged this fact to attract large sponsors with deep pockets. Even the gender stereotype is under siege. With estimates that 40% of e-sports viewers are female, potential sponsors are no longer limited to a demographic niche (Casselman).

Furthermore, the inflow of money has changed the look of the sports themselves. The LAN-party tournaments of 2012 are gone, and in their stead have come sold-out arenas as large as Madison Square Garden, or the Staples Centre – venues usually reserved for the highest tier professional sports, or the largest musical and theatrical events (Grubb 2016, Kresse 2016) Events today attract hundreds of thousands, and the infrastructure has kept up.
Professional gamers today have adopted much of the support structure that traditional sports have utilized for decades. Teams participating in e-sports tournaments hire coaches, physical therapists, strategic analysts and entire marketing departments aimed at feeding the ever-growing fan base. Top gamers today make immense incomes from various sources, and many have even started to adopt the lavish and sensational lifestyle often associated with traditional athletes.

Much like in traditional sports, viewers today tune in, not only for the suspense of the game, but for the behind-the-scenes action of the professional gamers themselves. But why? Unlike most sports, watching e-sports means viewing the screen of the player, not the player himself. So why do viewers forge personal relationships with the people behind the clicks?
Consider for a moment that all sports began as participant entertainment. You had to play to have fun. The concept of enjoying watching a computer game being played by others more than playing it yourself is curiously unintuitive for many non-gamers. And yet, statistics indicate that the total hours spent world-wide watching football vastly outweigh the hours spent playing it.

How can this be?

The answer has to do with ‘sports identification’: Sports fans experience the success of their team vicariously as if it were their own. Viewers are personally invested. The same concept has taken hold in e-sports, and viewers are no longer watching anonymous participants as pixels on the screen, but know and follow the players they support outside of the game as well (Balint 2016). This personal relationship, while artificial, is immensely powerful. It breeds deep loyalties to teams and players, and encourages fans to tune in whenever ‘their’ team is playing. For context, the largest European e-sports team, Fnatic, commands a daunting fan club of over 2 million members. Former gamer Ocelote has even managed to turn his own, personal brand into an immense revenue stream of almost $1 mil annually after his retirement (Dailydot 2016).

I started this post out by saying that e-sports are here to stay. Yet, despite my undeniably solid arguments, the gnawing feeling of skepticism remains with you: “It is not a sport, and it never will be.”

Are gamers athletes? With millions of dollars on the line – does it matter?

Cited:

Balint, Ed. “The Psychology of Sports: Why Do Fans Care so Much?” The Repository. -, 14 June 2010. Web. 27 Sept. 2016.

Dailydot. “This Pro League of Legends Player Is Making Close to $1 Million a Year.” The Daily Dot. N.p., 21 Oct. 2013. Web. 27 Sept. 2016.

Grubb, Jeff. “Esports Is Already worth $748M, but It’ll Reach $1.9B By 2018.” VentureBeat. N.p., 1 Oct. 2015. Web. 27 Sept. 2016.

Kresse, Christian. “ESports in 2015 by the Numbers: Attendance Figures, Investments and Prize Money – ESports Marketing Blog.” ESports Marketing Blog. N.p., 09 Jan. 2016. Web. 27 Sept. 2016.

Casselman, Ben. “Resistance Is Futile: ESports Is the Future.”ESPN.com. ESPN, 13 May 2015. Web. 27 Sept. 2016.

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4 thoughts on “E-Sports: The billion-dollar industry, and how it came to be.”

  1. To me the problem lies in the definition of “Sport” which is the “physical exertion and skill in which an individual or team competes against another or others for entertainment”. By looking at the definition e-“sports” full fills quite a few of the requirements: “competing”, “Team”, “Skill” and “Entertainment”. However I think where the public debate lies is the element of “Physical Exertion”, I find it relatively problematic that young adults are foregoing physical sports and therefor deciding to be involved in “e”sports, with obesity on the rise in almost every country in the world I do not think this should be classified as a sport. Currently the average U.S. gamer age 13 or older spends 6.3 hours a week playing video games during 2013. That’s up from 5.6 hours in 2012, which was up from 5.1 hours in 2011. These are concerning figures and I don’t think teenagers should be making an argument that this it is a sport because this could have serious repercussion to public health. I do know that professional e-sporters exercise a lot in order to stay focussed however I don’t think that will transgress to their viewership. It is almost like McDonalds trying to market itself as a healthy company by sponsoring the football world cup.

    Derek Loots
    379103

    Sources:
    http://time.com/120476/nielsen-video-games/

    https://en.oxforddictionaries.com/definition/sport

    1. Hi Derek, thank you for your comment!

      I wonder if the relationship between athlete and fan behaviour is as clear as you suggest. Obesity is on the rise, particularly in the west, however I question whether sports-enthusiasts are not victims of this phenomenon to the same degree as e-sports enthusiasts.

      To address the example of McDonalds advertising in the world cup – I would argue that sports are first and foremost sources of entertainment. Making sports associations responsible for the health of their viewers is, to me, as misplaced as making musicians responsible for acts of violence.

      E-sports is emerging as a key entertainment channel. This is, to me, the fascinating aspect of the movement; not the semantic details of what is, or isn’t, a ‘sport’.

  2. Nice blog Christian! Although I do not see these professional gamers as true sportsman, I can really find myself in the point regarding the fact that sport fans experience the he success of their team vicariously as if it were their own. Because do feel the same, whether i watch my local football team or watch my favorite E-sports team via twitch or YouTube. Despite this, more or less, same feeling doesn’t it feel like I watch a sport if I watch streams of online games. In my opinion is the “Name” E-sports just not appropriate for these competitive tournaments. I do not share the opinion that gaming causes obesity. Correct me if I am wrong but most office jobs are even less active than playing video games.

    Selm van Doormalen
    374159

  3. Very nice article and thanks for shedding some light on the eSports phenomenon.

    Recently I’ve had the pleasure to see a professional eSports organization from up close (TSM). While a lot of people (especially physical sports athletes) argue about the terminology. ESports have been officially labeled as a sport already, the eSports athletes travel around the world with sports visas and most professional teams work with coaches and analysts. While there is no real phyisical element in it, you have to be physically fit to be able to perform. Concentration and reflexes are very important, hence all top teams are required to go to the gym a few days a week. You could argue that chess is even less physically intense while it is still labeled as a sport.

    Anyhow the industry has been estimated at 1.3 billion in the upcoming year so there’s definitely enough potential in this industry to make revenue. Especially with VR and AR coming up I’m very curious to see where eSports will end up and how big it can be.

    Thanks for the article!

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