eSports on track to set earnings records

Helen Le, Editor-in-Chief

Video games have long been a part of the leisure time of children, teenagers and adults alike. When these gamers start taking the phrase “do what you love” literally, the results may be surprising for traditional sports enthusiasts. On the digital horizon is the advent of a new industry that is already starting to boom: eSports.

The roots of eSports spring from the unofficially organized competitions in video game arcades in the 1970s. One of the first breakthroughs for eSports in which competition was widely recognized was Atari’s competition for a champion of its game Space Invader in 1980. Over 10,000 gamers spanning multiple cities participated in an attempt to be crowned. In the early 2000s, these competitions began attracting spectators, most notably in South Korea, where cable networks broadcast Starcraft tournaments; in 2004, these Korean events had 100,000 people filling the stadium to watch.

With the launch of Twitch in 2011, the eSports industry rapidly expanded. Twitch allows for anyone to stream themselves playing a game, so more popular players could interact with their fans while casual players could broadcast their plays for their friends. Tournaments also finally had a stable network to broadcast their games. According to the website itself, Twitch attracts 2 million unique streamers per month and 9.7 million active daily viewers.

Due to the ease of accessing streams of competitions, more and more people find themselves watching eSports than before. Mathematics teacher Eric Vallecillo also got his start in watching eSports because of Twitch last summer, initially finding interest in the game Dota 2 and then getting into games like Heroes of the Storm and Starcraft.

“Before there used to be Halo tournaments and Halo leagues, but you could only watch it on XBox,” Vallecillo said. “With Twitch, it’s probably easier for people to see it and it’s easy to post, like I see tons of my friends on XBox Live streaming on Twitch. ”

Twitch is not the only platform that broadcasts eSports, either. Vallecillo, for example, now watches Starcraft biweekly on YouTube. According to Newzoo, a market research firm for things such as eSports and games, there is a worldwide audience of 191 million enthusiasts as well as 194 million occasional viewers.

The global eSports economy includes sponsorships and advertising, which makes up the biggest portion of its revenue, as well as ticket sales, prize pools and merchandise. In 2017, the industry made a total of $660 million, according to a CBS news article by Mireya Villarreal, and Statista estimates that revenue will reach almost $1.5 billion in 2020.

Bigger companies like Tencent — owner of League of Legends and its producer, Riot Games — and Activision Blizzard Inc. have the ability to capitalize on their population of gamers by providing tournaments and live streams. Tencent in particular controls events, licensing and marketing, and payrolls of professional players, which allows them to have more say in ways to make a profit.

Because of the growing industry, sponsors of traditional sports teams have found their way into the eSports scene. The North American League of Legends Champion Series (NA LCS), which features teams of professional players facing off in two splits to qualify for the World Championship stage later in the year, has reworked their league to revolve around franchising. For example, the NBA team Houston Rockets founded the new team Clutch City Gaming; the Cleveland Cavaliers have partnered with a Call of Duty pro player to establish 100 Thieves; and the Golden State Warriors have created the Golden Guardians.

This new system will be similar to how traditional sports leagues like the NBA and MLB operate, having buy-ins at $10 million, permanently establishing teams in the league, and forming a player’s association for the pro players. Riot has also increased the minimum salary requirement of these players to $75,000 in hopes of making the career viable to young players.

The premiere of the 2018 season of Overwatch League (OWL) on January 10th also marked a milestone for the eSports industry. With a grand opening in the sold-out Blizzard Arena in Burbank, a stadium built just for the viewing of eSports, the new OWL presents twelve teams from cities from Shanghai to London, now all living in Los Angeles. OWL also has a deal with Twitch to have their games broadcasted on the platform, which is at least a $90 million deal, according to Sports Business Journal.

Because players can be recruited from any part of the world to join an eSports team, they may face difficulties when attempting to immigrate to another country to play a video game. Fortunately for them, the U. S. now recognizes these players as athletes, granting the first P-1 visa to League of Legends player Danny “Shiphtur” Le in 2013. The Korean Sport and Olympic Committee, which regulates amateur and professional athletic statuses, also officially recognizes the Korea eSports Association.

The label of “sports” and its implications for video games remain a hotly debated issue. With so many colleges beginning to embrace eSports fans, the NCAA has been forced to join the discussion. Over 475 colleges and universities have eSports clubs and around 50 of these colleges offer scholarships for varsity talents, according to sports technology press SportTechie. As a result, President Mark Emmert of the NCAA has contracted Intersport to discuss with collegiate eSports stakeholders and looking deeper into the entire industry at the university level with a final report due in the spring.

If the NCAA integrates eSports into its organization, more students would be able to officially compete in eSports in college as well as find funding for their endeavors with an emphasis on Title IX, which determines athletic scholarships.

Although still a niche industry, eSports is growing with its targeted demographic of millennials and Gen Z, looking to be significant in the world.