Jimmy Kimmell learnt the hard way what happens when you criticise the world of eSports gaming – a new market where people watch other people playing video games via live streaming online. The famous American late night talk show host said his criticism resulted in a “hell storm of anger” where he received at least 10,000 comments on Twitter inviting him to “get cancer”.
The high emotions on Twitter in the wake of the Kimmell-eSports gaming storm gives an insight into how this industry has exploded in recent years and yet many people still have no clue that it exists. Pietro Fringuelli, a partner at CMS Germany, explains: “This is not a niche industry. The digital age has not only changed end user devices but also brings us new content and a new kind of entertainment.”
When talking about eSports it is important to differentiate between eSports and competitive gaming. There are some computer games that people may like to play, such as FIFA’s football games, but which other people are not willing to watch their peers play. When it comes to eSports only a few computer games are capable of attracting high volume audiences and these are League of Legends, Counter-Strike, Starcraft and DOTA 2. These are such highly strategic games that the Amazon founder Jeff Bezos likened playing League of Legends to “fifth dimensional chess”.
The scale of eSports should not be underestimated – three million people watched the Champions League final in 2015, about 23 million people view the NBA Finals, but a staggering 38 million people watched the League of Legends final. “The numbers of e sports enthusiasts is already similar to the number of enthusiasts watching American football which is shocking,” says Mr Fringuelli.
Critics may question if eSports is really a “sport” but given its popularity and demand that is the wrong question – the only question really is whether someone should enter this market or not. The world of eSports is already home to small companies organising league tournaments and increasingly welcoming large football clubs and global sponsors all trying to tap into the market’s large audience, particularly its high proportion of “millenials”.
Even mainstream broadcasters are now trying to access this new market and recently ProSieben, a German broadcaster, carried a live broadcast of a Counter-Strike final. Michiel Bakker, chief executive of Ginx eSports TV, a linear TV channel available in 55 million households that is broadcasting everything to do with this industry, said the eSports market is fast becoming mainstream: “Sky and ITV recently took a part ownership in our channel which is an indication that they are dipping their toes into this industry, which has already attracted 400 million millennials and this will continue to grow at a clip of 20 per cent a year and will very quickly reach a billion.”
The reason mainstream companies want access to this market is not only because of the size of the audience but the quality of it too. About 80 per cent of eSports viewers are between 18 and 34 years old, most (83 per cent) of the audience is male and the average income per household of an eSports participant is 50 per cent higher than the average income. This is because eSports games are highly complicated and attract smart people who typically earn more money.
Seong Sin Han, head of marketing legal services at UEFA, said no sports organisation can ignore the volume of cash-rich millennials accessing eSports or the potential opportunity it provides to enter a new market and extend brand awareness. However, the ability to fully access eSports may depend on the nature of the organisation: “UEFA is football. For UEFA to promote something that is not football is not something that we are mandated to. What we are doing [in the world of eSports] is trying to reach out to millenials to push out awareness of our actual football tournaments. We are not promoting eSports we are using it as a marketing tool.
The business model around eSports is evolving all the time and currently involves some publishers who create games and dictate the rules, such as Riot Games’ League of Legends, and others that allow the rules of games to be developed by the users, such as Valve’s Counter-Strike. There are also league operators, such as ESL, providing the stadiums, ticketing, marketing, production, commentary and distribution for the competitions. At the moment not every business model in the eSports industry is making money and who will end up the most successful has yet to be seen.
