Gibson Holahan

The stadium is screaming at the top of their lungs when Americans band Imagine Dragons enter and precede to walk to the center of the stage.  Lights flashing and 40,000 people are singing along and dancing.  Another 27 million people are streaming the event across the world. After the performance is finished the broadcast is briefly interrupted by a coke-a-cola commercial and is resumed shortly later.  This was the opening to one of the biggest sporting events of the decade. After the band was done performing the broadcaster announces, “Ladies and Gentlemen let the 2014 League of Legends World Championship begin. 

 Esports is the fastest growing spectator sport in the world according to Teemu Paivinen in his recent article.  There is no denying that the industry is growing each year and breaking predictions.  In this research paper Im going to analyze the question what is the true potential of esports compared to the developing years of traditional sports?  I will also define esports and analyze the opportunities it provides for those who are not as skilled in traditional sports.  Esports can potentially change how people views sports and it might become a term that is an everyday commonality.

At the beginning of the year, 2017,  esports revenue was at 762 million, exceeding all predictions made in the previous year.  They are predicted to reach 1.1 billion by the end of 2017.  However,  they will exceed this if they continue the trend of exceeding all of the previous predictions made by the market report done by NewZoo.  The esports revenue will exceed its prediction if it keeps up the global sports audience growth rate averaging 34%.  The average annual revenue per fan is expected to grow as well to 7.6 dollars by the end of 2017.  Compared to traditional sports annual revenue of 54 dollars per fan this number is quite low.  However, esports revenue per enthusiast is growing unlike traditional sports revenue which has plateaued with only a 1.7% increase from last year.  Esports is still relatively new and to the average person its just a bunch of kids playing video games but to others its a sport. 

Esports is one of a kind and its not on a court or a field but it played on a computer in front of millions of viewers.  There are four different sub genres, first person shooter (FPS), Real time strategy (RTS), multiplayer online battle arena (MOBA), and Fighting.  Red Annihilation tournament in 1997 was considered the first real instance of esports drawing over 2000 participants.  From there the sport has expanded with the World Finals of League of Legends in 2016 broadcasting in 18 different languages to 43 million viewers across the world according to Tyler F Edwards based on the statistics produced by Newzoo.  Eventually leagues were created such as the European gaming league, Major League Gaming, and UMG gaming. Even in 2013 The League of Legends had more viewers than the Masters, NBA Finals, and the World Series. 

     Esports has seen the greatest amount of growth in the most recent years from 2010-2016.  Big corporations such as Coke-Cola and Red Bull joined the industry in 2015.  From 2014 to 2015 Esports saw a 67.4% increase in viewers from 194 million to 325 million and is expected to reach around 1.1 billion dollars by 2019 according to a new report by market researcher Newzoo. With more companies looking to join the industry and even the owner of the Dallas Cowboys possibly buying a team the growth is undeniable and is realized by big business.  The owner of the Philadelphia 76ers has invested in esports by buying the team, Dignitas.  It is crazy to see traditional sports and esports coming together, however they are completely different and require a whole new set of skills.  

Like any other sport, esports requires a lot of skill and communication within the team. However, with esports genetics isn't much of a factor because it comes down to how often you practice and your chemistry with your team. This gives one with a disability or lack of skill set in traditional sports to participate in esports.  Arguably, Esports is the most team-based sport because you are talking to your team throughout the game while traditional sports communicate in huddles or timeouts.  Even the captain/coach can talk to one of the players during the game.  Esports demands a lot from the player’s reflex skills and fast decision making skills. For example, some of the pros can press up to 300 keys per minute!  Another way esports differs from traditional sports is that players have to be flexible and be able to fill any position.  You will never see a QB step up and play on the line for football.  Esports also requires a lot of practice with players practicing up to 13 hours a day.  This has introduced harmful supplements such as aderal to the sport. Esports countered this with anti-doping regulations similar to the regulation in football. Countries like North and South Korea have taken their own stand and have made doping while competing as a pro in esports illegal.  This is just some of the challenges the industry faces.

     Just like traditional sports gambling is a huge part of the industry.  With Vegas casinos signing contracts with esports and the Dallas Maverick owner investing in the esports betting platform, Unikrn, gambling is growing.  Gambling does not contribute to the direct revenue of esports.  With gambling comes match fixing.  In 2014, 12 players and even coaches from Korea were arrested for match fixing and faced major fines.  Korea even made it illegal to tamper with video games.  Esports have created regulations for match fixing but have not provided education to the athletes what the definition of cheating regards.  This can slow down and possibly hurt the growth of the sport. 

 Right now esports is establishing regulations and making great changes to the global community and are working on educating athletes on the definition of cheating.  Esports to the typical person though might not even be a word in their diction, however to others it provides them with amazing opportunities. 

Heroes of the dorm is an esport’s tournament that is open solely to college students for a chance to win 3 years of free tuition and a custom pc. Doug Mancuso a college student at FSU as well as a professional Hearthstone player is competing in a similar tournament for a chance to win free tuition.   Doug states “esports has given him the chance to go to college”.  Doug used his tournament earnings to pay for his first year of college.  Doug also enjoys watching esports saying “That he watches esports both for the enjoyment and tips to improve his own game.”  Doug is doing fairly well in the tournament right now he is 4-1 and is representing FSU.  Many colleges have their own teams and some started giving scholarships for esports like the University Of California, Irvine. The Big 10 even started a League of Legends season with Michigan state and Ohio state making it to the finals.  Esports has also given people who may not be the traditional athletic superstar a chance to thrive in a competitive spectator sport.  Last year the total prize money of all esports events has reached 61 million, up 70% from the pervious year.  So the saying you will get no where by playing video games is now outdated.  Video games are becoming more and more apart of our everyday life as well as becoming very accessible to people across the world.  With 80% of families owning a gaming device in the United States  its clear that video games are becoming more accepted. Esports have even branched off of console and pc games and the extremely successful with the phone app Clash Royale that just hosted their first tournament for $73,000.  Even with the rise of mobile devices there are still many people that cannot part take in esports. 

 The Digital Divide is preventing esports from reaching most of the world.   Not everyone has access to a computer or internet.  Even though esports reaches 27 countries right now and is predicted to reach 43 there are still some countries that cannot participate due to the digital divide. All of the 27 countries are developed countries. Traditional sports can be played by anyone, anywhere.  However, they cannot be played at the competitive level compared to esports which allows anyone to participate.  Organizations such as  Close the Gap are trying to connect everyone by donating pre owned computers.  There are many other organizations fighting the cause to bridge the digital divide.  Thus, esports will continue to grow in the future because more of the population can readily participate.  Esports provides a unique experience to the player and audience, that cant be compared to any other sort in the world.

    Another set back that esports faces is the money spent by a fan on merchandise. Examining basketball we can see that the average fan spends 15 dollars while esports is at a low 3.53 dollars.  Basketball has one of the lower average dollars spent by fans as well. Online advertising is the fastest growing revenue segment, up 99.6% on a global scale compared to 2014.  Even though the League of Legends finals pulled in more views than the NBA finals, the NBA has a much higher revenue close to $5.2 billion.  Esports is predicted to hit a billion in 2019 but has a much higher growth rate than the NBA revenue. Time spent on tv has decreased by 30 minutes starting in 2013 while time spent streaming has increased by one hour.  This is significant because esports is mainly streamed online.  Esports just signed a contract with ESPN mid 2015 and since then has only had broadcasting between 1-5am.  This is subjected to change with the rise of esports, ESPN has decided to start rerunning some matches throughout the day so its more accessible to watch for the average person.  With TV on the decline though this causes traditional sports ad revenue to slow down.  

With video games being fairly new, the sport’s demographic is more towards millennials.  60% of esports fans are from 24-31.  Surprisingly the  demographic is skewed towards those with full time jobs and higher incomes.  This counters the negative stereotypes that comes to mind when thinking about someone who plays video games.  Based on these statistics it only makes since that Los Angles 2024 the olympic committee in charge of overseeing the event is trying to bring esports to the olympics.  The organization recently got a bid and is waiting for approval.   This was inspired by the sold out League of Legends finals was hosted at the staple center in Los Angles.  This isn't the first time video games have been included in the Olympics.  In 2008 two professional gamers, Moon and Sky, were selected to participate in the Olympic torch relay.   The Olympics have been losing viewership of 19-49 year olds over the past couple of years.  They plan on bringing esports to the Olympics to promote a healthy lifestyle through the use of virtual and augmented reality and get more views from millenniums. There has also been talk of creating an Olympics solely for esports.  Esports has only been around for 10 years and is already making its way to the olympics.  For other traditional sports it took decades. 

There is no doubt the esports is growing.  Its seen with major companies investing or partnering with the sport,  the growing revenue, and how traditional sorts are slowing down while esports is rapidly growing.  There are some major threats to esports success for example the digital divide and cheating but these threats are being faced and changes are being made to counter theses set backs..  Esports will provide a lot more opportunities than traditional sports  and will also change entertainment and what the major population thinks towards sports.