With Viewership and Revenue Booming, Esports Set to Compete with Traditional Sports
In 2017, more than 111 million people watched the Super Bowl, traditionally one of the most popular sporting events on television. But that figure is eclipsed by the number of people who follow a different type of sports event live or online.
Esports, also known as electronic sports or professional video gaming, has been booming. More than 250 million people follow the competitions, according to the technology consulting firm Activate, and most of those viewers also play.
The company estimates that by 2020, 70 million people will watch an esports final, which is more than the viewership for the American professional baseball, soccer, and hockey finals. By that time, consumers will watch 3 billion hours of esports, or 10 percent of all sports viewing.
Already, more men age 18 to 25 watch esports than traditional sports, according to Esports Marketing Blog. Esports teams and leagues are collecting high-dollar sponsors, like Mercedes. They are selling professional franchises to the owners of “traditional” American sports teams. High schools are forming teams, and universities are offering scholarships.
With new teams and leagues, along with apparel and rivalries, esports viewership is rising more rapidly than in other sports. Associations like WESA and the Esports Integrity Coalition have formed to “professionalize” esports by representing players, standardizing regulations and schedules, and establishing rules to combat doping and cheating.
While the popularity and pay of esport’s “worldwide superstars” don’t approach that of those in sports like the NBA or NFL, “everyone has to take note of how fast it’s growing,” said Eunkyu Lee, professor of marketing at the Martin J. Whitman School of Management at Syracuse University.
Unlike football or cricket, esports are not rooted in any region or culture, so they have a more global appeal, Lee said. “In today’s world, being able to reach ... billions of eyeballs is very important.”
Watching other people play video games was responsible for the rise of Twitch, which calls itself “the world’s leading social video platform and community for gamers” with 10 million daily users. Amazon bought Twitch, which claims 2 million streamers, for nearly $1 billion in 2014. But fans can now watch competitions live at sold-out events held across the world. Cable channels are devoted to round-the-clock esports, and games are shown on major networks like TBS and NBC. ESPN, Lee said, “is really paying attention to this.
News outlets have their own esports reporters and sections, and Nielsen announced the formation this year of Nielsen Esports to track the sector. Esports teams have long had corporate sponsors in South Korea, where competitive gaming is “enormously popular,” Lee said, but teams are gaining sponsorship worldwide and companies are beginning to go beyond sponsorships to buy teams outright.
An Economic Boom
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.
This year’s finals of Dota 2, a multiplayer online battle arena game, had just 5 million concurrent viewers but a $24 million purse, according to gamesindustry.biz. And the events are as lucrative for the companies that back them. Although revenue from more traditional sports are still multiple times larger than those from esports, the consulting firm Activate estimates that esports revenue will grow from about $300 million in 2016 to $1.5 billion by 2020. Gambling, both on esports games and within those games, is likely to grow, according to Activate, to represent 5 percent to 10 percent of all sports betting by 2020.
Traditional sports leagues are also paying attention. This year, the NBA announced it would be the first professional sports league to form an esports partnership—the “NBA 2K eLeague” with Take-Two Interactive Software, publisher of the NBA 2K video game.
NBA Commissioner Adam Silver told the Associated Press the league is starting with 8 to 12 teams in 2018, using actual NBA team names, and that he hopes that all 30 NBA teams will eventually be represented.
Silver said he hopes gamers will be able to say, “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.”
While much of the esports focus has been on PC games, mobile gaming is also on the upswing.
Skillz, which calls itself the leading mobile esports platform, says that it facilitates the competitions of 12 million gamers in thousands of games. The company said it awarded over 46 percent of all esports prizes in 2016, for players competing in games like bowling, bubble breaking, and mini-golf.
At first glance, it seems odd to the uninitiated: hundreds or thousands getting together to watch other people playing video games, with millions more watching online. Fans flying from all over the world to watch a dayslong tournament sounded “ridiculous” just a few years ago, Lee said, “but it’s becoming a regular event … for the fans, this is no different” than traditional sports.
Citation for this content: MBA@Syracuse, Syracuse University’s online MBA program