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eSports: A hidden gem?

Peter Ly believes that as internet usage continues to increase, online games are rising to challenge our traditional perception of sports.

Every sport has a star: Cristiano Ronaldo for football, LeBron James for basketball, Andy Murray for tennis, and the list goes on. These household names play an integral part to their respective  sports, socially and economically. Yet in the depths of the internet there has developed a new brand of sports: eSports, short for electronic sports. It consists of popular games such as: League of Legends (LoL), Counter-Strike GO, DOTA 2 etc. Within the landscape of eSports exists its own stars such as Lee “Faker” Sang-Hyeok for League of Legends, and Jarowslaw “Pasha” Jarząbkowski to name but a few. Yet despite the numerous supporters of e-sports, the demographic still remains as a niche in the west; is it about time we discover and mine the gem that is eSports?

A Rising Star
The internet has allowed gaming to become a competitive platform. This gave an astronomical rise in the popularity of eSports.  Since the early 2000s, there has been a host of incredible eSports events. The Staples Centrein Los Angeles has hosted World Championships for League of Legends in 2016, which drew crowds of 20,000. Such large following means equally large prize pools, which have reached $24 million for a single tournament in DOTA2 this year. Comparing this to the  2016 Super Bowl, where each winning New England Patriots player took home $110,000, the prize pool is dwarfed by the $9 million awarded to Team Liquid, split amongst 5 players. A defining moment in eSports history was when it was aired on broadcasters ESPN and TBS in 2015, in an attempt to broaden viewership. Said viewership peaked at 14 million viewers reported by ESPN for the LoL world tournament. Even professional sporting entities such as European football giants, Paris Saint-Germain and Manchester City, are entering the eSports sphere with their own players and teams. Yet, as the west continues its endeavour to introduce eSports, a working model already exists in the east.

Consider South Korea,where professional eSports gaming is integrated in the culture, and is regularly televised on national TV. The country’s eSports stars are treated like celebrities and there is even a government body, the Korean eSports Association (KeSPAs), managing the sport. KeSPA’s affiliation with the Korean Olympic committee and its parent organisation, the Ministry of Culture, Sport and Tourism, proves its importance in South Korea. The global market for eSports is constantly growing with an expected value of $1 billion by 2019.  South Korea and China alone generated $106 million in 2016.Revenue is generated through merchandising, ticketed events, sponsorships, online advertising and media rights. In 2015, ticket sales from 112 major eSports events generated $20 million. South Korea and China are prime examples of how to make the most out of professional gaming. South Korea has nurtured the gaming culture with the explosion of government support and the world’s fastest internet.

High Stakes
Yet the largest winners behind eSports are the gaming companies who reinvest every year into eSports. Riot Games, the creators of LoL, was bought by Chinese investment holding company Tencent. In 2013, it was estimated that LoL made over $600 million in revenues and continue to impress; last year they reported $1.7billion in revenues. Activision, known for its Call of Duty series, merged with Blizzard, known for World of Warcraft, in 2008. The merger has proven profitable for both, because Blizzard dominated the online gaming landscape and Activision was the powerhouse in the single player scene. The rise in eSports’ popularity has contributed to the growth of Activision Blizzard shares, going from $10 in 2008 to $60 today. Meanwhile, Electronic Arts have entered the field of eSports with 3 games: the FIFA franchise, Madden, and Battlefield. Some argue that these games do not have the competitive edge of LoL or DOTA 2 because the prize pools aren’t large enough to attract competitive play. Despite this, it is estimated that FIFA’s Ultimate mode has still made $800 million in net revenue last year, a value that has grown year on year and still has potential going forward.

Online video gaming has long been a staple of consumer entertainment. With the inclusion of a social aspect, competitive edge, and the expansion of the internet, eSports have gone from strength to strength each year. The eSports culture has been embraced in parts of the east and is making a slow, but sure, introduction into the west. Many companies have benefited massively from the eSports boom, and others are beginning to partake in the opportunity. With such large organisations largely profiting from eSports and a proven integration of eSports in the east, does this spell a bright future for eSports?

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