eSports: Behind the next billion-dollar industry

Competitive gaming is a big deal, generating millions upon millions of views and beginning to even outpace the rest of the games industry.

MCV chatted to professional teams, event organisers and other firms involved in the burgeoning sector

If you had asked someone five years ago whether they watch eSports, they would probably have looked at you quizzically or even laughed. Jump forwards to 2014 and eSports is no longer a novelty – it’s serious business.

SuperData estimates total eSports viewership to have surpassed 70 million in 2013; that’s more than the population of the UK.

Prize money has also rocketed, hitting $25 million in 2013. Dota 2 competition The International 3 alone offered a record-breaking $2.87m – an impressive number smashed this year by The International 4’s $10.9m prize pool.

And these statistics are only set to rise further, as investment in events and sponsorship of teams continue to professionalise the sector.

The last few years have seen tremendous growth globally with more and more major tournaments being held,” Michael ‘ODEE’ O’Dell, professional eSports manager for UK eSports team Team Dignitas, tells MCV.

Prize money has gone up and payment of prizes is almost on time now, which is a major step forward. Viewership also continues to rise, which is the best indication of the growth we are currently seeing.”

Matt Macdonald, senior eSports manager at games event organisation Multiplay, adds that the rise in free-to-play games has allowed more players to try a game for free, before getting hooked on the competitive aspects of titles.

The F2P model has made eSports much more accessible to the average user,” he explains. The large player bases of free games like League of Legends make for a much bigger audience. Mostly this audience has been at home, and the transition is now being made into more and more live physical events.”

He echoes O’Dell’s comments that event audience numbers will boom as bigger prize pools attract greater numbers of competitors.

Over the next five years we will see the Wimbledons and FA Cups of the digital world, featuring gatherings of spectators watching global stars battle on increasingly grand live stages,” he predicts. Prize pools are going to get bigger and better. Just take the growth of The International: in one year we saw a rise from nearly $3 million to over $10 million – an unprecedented increase never before seen in sporting prize pools. In short, eSports means business.”

"Over the next five years we will see the Wimbledons and FA Cups of the digital world."

Matt Macdonald, Multiplay

Given the increasing rewards on offer for those involved with eSports, it’s no surprise that more and more companies are jumping into the pool by hosting events, sponsoring teams or simply stocking related products.

But Andrew Holt-Kentwell, global associate eSports manager at Razer, warns against flash-in-the-pan attempts to temporarily ride the zeitgeist, for the sake of the industry’s long-term health.

We’d encourage other companies to invest for the long term in eSports and lend their expertise to shaping a more mature, consistent industry over time,” he explains. The only solution to changing the generally poor perception of the public towards gaming is to prove the value at all levels.”

Macdonald agrees that constancy is key: eSports viewers respect brands that support their hobby consistently and continually,” he argues. Don’t go for a big splash – build brand loyalty by creating strong support structures, partnering with proven organisations, sponsoring tournaments and professional gaming teams as a standard, and keep that support going annually.”

Mike Sepso, president and co-founder of professional gaming organisation MLG, also offers his advice: Brands should approach eSports as they would any other new, fast growing, youth oriented media segment,” he suggests. Align with key brands that share your values and have scale. Be authentic with the audience and support their passions.

O’Dell points out that the priority for firms looking to break into the market should be ‘homework’.

Companies looking to come into our industry must fully understand how it works and what it is,” he says. I would advise appointing a consultant from the scene to help match the company’s goals with the best match eSports has to offer.”

"Gaming events are capturing online views that rival cable show audiences."

Anthony Cornish, The Pokmon Company

It’s not hard to start learning your ‘jungling’ from your ‘ganking’ either – there are millions of live streams out there covering aspects of nearly every game.

Twitch has been the saviour of my dream of eSports being a globally-accepted industry,” O’Dell says. Since it appeared the numbers that watch us play has gone through the roof. It’s the coolest thing to happen to eSports in the last 15 years.”

Video of eSports is becoming worth big bucks too; IHS Technology predicts that the sector will be worth $300 million by 2018. Macdonald says that this rapid growth is partially due to how easy it is to start streaming or watching.

Live streaming services have had a critical effect on the growth of eSports,” he comments. Twitch especially has made it easy to tune in, with its multi-platform accessibility and low barriers to entry for users on both sides of the streaming spectrum.”

Anthony Cornish, marketing director at The Pokmon Company, says that the social aspects of streaming are also a key factor.

The fan communities surrounding all games have been galvanised by social media and online play,” he tells MCV. Live streaming has been around for years but the technology continues to improve – as do internet speeds, which has meant we can reach an ever-wider audience.”

He concludes that streaming is proving that eSports is no longer something for the few.

Larger competitive gaming events are drawing crowds that are filling arenas and capturing online views that rival cable show audiences,” he observes. Competitive gaming is already showing that it has mass appeal and isn’t as niche as many think.”

THE MONEY’S IN THE MOBA

With more and more players and companies taking an interest in competitive gaming, which titles are proving the biggest hits?

Easily the most popular area of eSports at the moment is League of Legends, which is free-to-play and has been available for over five years now, so has built a huge audience,” comments Macdonald.

Free-to-play games are coming to the forefront of eSports. Any game that still follows the older model of a single one-off transaction to gain entry will struggle to build as much of a following because the audience is going to be naturally much smaller. Call of Duty is a bit of an anomaly on this front: there aren’t many titles as incredibly widespread across multiple formats.”

O’Dell agrees: Without a doubt the MOBA scene has exploded with League of Legends and Dota 2 leading the way, but Call of Duty on