2018

Twitch 2017 Year in Review Reveals 22% Growth in Watch Time

2017

Nielsen launches Esports valuation

E-sports leagues nearing 8-figure deals that will give clarity to the nascent industry

2015

ESports: A New Frontier for the Sports Business

By Roger R. Quiles, Esq.

On April 26, 2015, ESPN2 aired the finals of a national, intercollegiate video game competition called “Heroes of the Dorm” in which current college students competed in the Heroes of the Storm[1] video game for scholarship money. Broadcasting video game tournaments is not new for either ESPN or global media outlets. The competitive video gaming industry, otherwise known as eSports, has exploded both domestically and abroad in the past few years. In fact, ESPN has included eSports in the last two X Games events. Also, college scholarship money is not the only type of prize awarded in these tournaments. Teenagers and young adults are earning up to six or seven figures annually from tournament competition, streaming their gameplay on platforms such as Twitch.tv, and garnering corporate sponsorship income. Of major significance are the millions of people from around the globe viewing and participating in eSports competitions. Although many sports journalists have discounted eSports as not being worthy of coverage, they may have to eat their words as this new sports phenomenon grows.

What is eSports?

Stated plainly, eSports are competitive video games played by gamers for financial gain. Enthusiasts also have the opportunity to profit from eSports by utilizing the many gambling and fantasy eSports websites. Although eSports is the term for the industry as a whole, there are multiple video games that are played competitively for profit. Some of these titles include the Call of Duty[2] series, Counter Strike: Global Offensive[3], Dota 2[4], the Super Smash Brothers[5] series, and the most popular, League of Legends[6]. Most of these games involve team-based competition. Players organize into teams as they would in any professional sport, with the team being a business entity that hires the players. The players practice together, often up to eight or ten hours per days. Teams also play games in seasons, as organized by league entities, just like any professional sport. However, due to the digital nature of eSports, leagues do not need extensive physical infrastructure in which to hold matches. The two teams playing don’t even have to be in the same room. Leagues can be organized, and matches can be played, through the Internet.

ESports teams leverage competition victories and substantial online followings (through social media and streaming services) to secure sponsorships. Several well established brands have entered the eSports sponsorship space, whether on the league or team side, including Coca Cola, Redbull, Monster, HTC and Samsung. Players are also free to secure their own sponsorships similar to traditional individual professional sport athletes.

Why should we care about eSports?

Viewership of eSports events is extremely high, and is still growing. In 2013, online viewers watched a total of 2.4 billion hours of eSports footage. Some eSports events have drawn greater viewership than traditional professional sporting events. Most recently, at the IEM Katowice tournament, over one million concurrent viewers tuned in to watch the tournament’s finals. ESports also does not exist solely in the virtual realm. Live events have sold extremely well, with events selling out Madison Square Garden, the Staples Center, and the Seoul World Cup stadium in Korea. Particularly significant to the business world is the fact that eSports’ largest demographic is 18 to 24 year old males; widely regarded as one of the most difficult demographics for brands to reach. This young male demographic, like the games themselves, are extremely connected to the digital space, which has been a particularly troublesome area for brands to successfully engage viewers and participants alike for profit.

Legal issues in eSports

As a “sport” in its infancy, there are a surprising number of parallels to the past history and struggles of athletes in other professional sports. In the industry at large, there is very little knowledge and realization of players’ rights. As such, many players are taken advantage of. Despite grounds for legitimate contract or employment disputes, many players simply accept the abuse. An especially prevalent problem is players failing to be paid by their teams. The unfortunate reality is that many players (especially in the amateur or semi-pro circuits) play for teams without a contract and are further unaware of their rights. Predatory team owners are nothing new to the sports business, but such a problem highlights the need for legal protection and representation necessary to protect eSport players from being taken advantage of.

______________________________________

[1] Developed by Blizzard Entertainment, 2015.

[2] Multiple developers.

[3] Developed by Valve Corporation, 2012.

[4] Developed by Valve Corporation, 2013.

[5] Multiple developers.

[6] Developed by Riot Games, Inc., 2009.