Wednesday 24 April 2019

Why is everyone talking about Esports? What is it all about? Is this a passing fad?

Almudena Berzosa Peñaranda
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Almudena Berzosa Peñaranda

Performance & eSports Psychology / Market &Competitive Intelligence. Business I... See more

To keep it short and simple, Esports (electronic sports) is competitive video gaming at a professional level with organized competitions.

Video-game competitions have been around for quite some time, to find the first official video-game competition on record we need to go back to 1972 (take that Millennials!); it happened at Stanford University, where players were invited to compete in a space combat game called Spacewar, to win a prize of a one year’s subscription of Rolling Stone magazine.

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In 1980, video game competitions became known to a wide audience when Atari organized the Space Invaders Championship and Walter Day created Twin Galaxies.
Competitive gaming had worked its way into popular culture in the 1980’s, but it’s growth really accelerated in the 1990’s when the internet opened up a whole new world of possibilities.
Nintendo Entertainment System (NES) took the controls, graphics, gameplay and accessibility of video games to a new level and also boosted the growth of competitive gaming. They ran the Nintendo World Championships in 1990 and in 1994.

Some of the first esports leagues were founded in the late 1990’s including the Quakecon , the Cyberathlete Professional League and the Professional Gamers League. Games like Counter-Strike, and Warcraft were already featured in those days.

But we could say that the flourishing of this industry happened in the 2000s when we saw the launch of the World Cyber Games and the Electronic Sports World Cup. These major international tournaments helped to set the tone for the kind of big competitions that would later come to define the esports world.

Many things happened in those years, but I want to underline the importance of the release of xBox live in 2002, bringing online play to consoles. Halo 2 was the first game to be broadcasted on a national TV and sponsors made competitive gaming a lucrative career choice. This was a game changer. From then, esports really took off.

The majority of the esports revenue comes from brand investments, which can be categorized as sponsorships, advertising and media rights.

The esports industry has grown at a tremendous pace, I feel it’s safe to say that over the last decade it has become one of the fastest growing industries worldwide, benefiting from traction from new video game social media content, products and gaming events around the world.

No alt text provided for this imageTaking a look at the past few years, it is clear that esports has become a multi-billion dollar industry spanning every corner of the globe.

Recently Newzoo estimated esports revenue will eclipse $1 billion in 2019. There is a growth rate of 22.3% year over year; the prediction is that revenue will reach $1.79 billion by 2022.

Can we consider this a passing trend? Absolutely not. The esports industry has passed the status of a fad and has become a serious industry with investors betting their money on this business, given the potential it holds. Hedge fund managers point to the rising popularity of esports events as an indicator of the market opportunity.

You may ask yourself “but why?”, “why is this activity moving so much money?” 

The answer is simple: because of the number of people watching. 

This multi-billion dollar industry attracts not only passionate spectators (we are talking about millions of fans) but also major media outlets and even celebrities. Esports are here to stay.

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Esports audiences can watch events by either visiting the arena live or online through gaming broadcasters. According to the World Economic Forum, the global esports audience reached 380 million last year, made up of 165 million dedicated esports fans and 215 million occasional viewers.

Millennials and Generation Z are the force driving this industry unlike any other.

To better illustrate this, just take a look at the top of the following table: 46 million people watched the IEM Katowice in 2017. Yes, this is not a typo: 46 million people.

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There are many type of games and a variety of eSports franchises, but certain titles dominate this market (below are just some examples, please do not bombard my private inbox with complaints that your favourite game is not on the list)

League of Legends

LoL remains one of the most popular eSports games today in which teams battle to destroy the enemy’s nexus. It is a multiplayer online battle arena video game developed and published by Riot Games for Microsoft Windows and macOS.  The Prize Pool of LoL in 2018 was $14.12M (Source: esports observer)

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With more than 200m players worldwide, the chances are either you, your friends or your children or your children’s friends are already playing or watching it. This online video game was developed by Epic Games and released in 2017. The Prize Pool of Fortnite in 2018 was $19.96M(Source: esports observer).

The Fortnite World Cup in 2019 will have a prize pool of $100 million. 

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Defense of the Ancients 2 (DOTA 2)

This is a multiplayer online battle arena video game developed and published by Valve Corporation in 2013. 

Valve hosts an annual tournament called The International where the world's best DOTA players compete for prizes. The Prize Pool of Dota 2 in 2018 was $41.26M (Source: esports observer).

The International 2017 broke the record for the largest prize pool in eSports history at $24,787,916.

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Counter-Strike: Global Offensive

CS:GOis a tactical multiplayer first-person shooter video game (part of the Counter-Strike series) developed by Hidden Path Entertainment and Valve Corporation released in 2012 for Playstation 3, Xbox 360, Microsoft Windows, and OS X and later Linux as a downloadable title.

The Prize Pool of CS:GO in 2018 was $22.47M (Source: esports observer)

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Other top esports games are Call of Duty, Overwatch, Hearthstone, Starcraft or Rainbow Six. 

I do not want to forget Mobile eSports games like: Clash Royale, Honor of Kings, Arena of Valor, VainGlory, Summoners War, Mobile Legends or the new comer: Brawl Stars. 

If you are not already a fan, you are probably starting to be curious and wondering: where can I watch esports?

They can be seen online via Twitch, Mixer, Youtube or even Facebook (all for free) and as we just said, you can also attend live competitions in dedicated esports venues. No alt text provided for this image

Esports has yet to achieve popularity in the conventional entertainment industry but the phenomenon is fast approaching an inflection point where it will certainly happen. Esports tournaments continue to grow in audience and economic impact, and each year brings these competitions closer to the level of popularity and acceptance enjoyed by traditional sports. 

Observing the trends as described above, I am inclined to assume that esports is definetly not a passing fad. 


Almudena Berzosa is a member of the Executive Team at the Swiss eSports Federation.

For more content like this, follow her on LinkedIn, Twitter @A_berzosa and on Facebook at Facebook/BuildingYourBackbone

This article was also published in the Website of the Swiss Esports Federation

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