The Business of eSports

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It’s not uncommon for successful business people to invest in, or even buy, a sports team. On the surface, this might look like the fulfilment of a dream. However, as demonstrated by the salaries of most well known footballers, there’s a lot of money in sports. If the team does well, then investors are rewarded. But this isn’t just confined to traditional sports – an entirely new breed of tournament has been gaining popularity in the last 10 years. Instead of pitting teams against each other on the field, these games are played in mass online eSports tournaments hosted at various international locations. The eSports market is shaping up to be as popular and as profitable as traditional sports, but what’s in it for businesses?

Not just for gamers
Why should a business with no connection or interest in gaming care about eSports? Well, by 2020, eSports revenue is predicted to reach $1.5 billion, with an audience of 385 million. That’s a big incentive right there – and it’s a global one, too. Tournaments are held across the world, in iconic venues from London’s Royal Opera House to Seoul’s World Cup Stadium. Riot Games Inc. – the creators of popular eSports game League of Legends, that literally has its own exclusive league. This month, the company set a new price of $10 million for a team slot in the competition, representing a fivefold increase in just two years. Simply put, eSport is really upping its game.

In terms of business, there are marketing as well as investment opportunities. eSports tournaments might be played by professional gamers and watched by gaming enthusiasts, but the audience is also overwhelmingly millennial. Reaching the millennial generation has been a continual thorn in the side of marketers, so eSports broadcasts could be incredibly helpful. In fact, TV networks are so interested in eSports that they have even set up their own tournaments. NBC, for example, will host a ‘Rocket League’ starting next month. If that doesn’t show an impressive level of confidence, nothing does.

Is the eSports market disruptive?
eSports is a celebration of the gaming industry, and is actually changing the way games are developed. Franchises like Call of Duty, Dota and League of Legends are designed to support professional competitions, which could gradually affect how other games are made. It’s clear that there’s money to be made from eSports, especially considering the growing interest and viewership across the globe. The popularity of gaming tournaments is unlikely to pose a serious challenge to investment in traditional sports teams, but it could disrupt investment patterns by poaching interest. This isn’t just about teams doing well for the benefit of investors, either. As the market expands, so do marketing and advertising opportunities. eSports spectators are almost exclusively millennial, which could provide a way for companies and campaigns to connect with the notoriously difficult demographic. This may also explain why TV networks are so enthusiastic about broadcasting (and even holding) tournaments. The popularity of eSports also represents another step towards a digital world. Businesses need to be acutely aware of societal preferences, and gaming is undeniably a huge part of postmodern culture. As networks and investors flock to take advantage of eSports’ growth, more people will be exposed to it. Theoretically, this will encourage its expansion and disruptive potential.

eSports is a blossoming market with opportunities in finance, marketing, advertising, and entertainment. A rapid increase in viewership has drawn investors, and captured the interest of businesses that don’t necessarily have a background in the gaming industry. Now that mainstream television networks have realised the potential of eSports, the sector can only expand. Intel already sponsors the Extreme Masters tournament, and maybe other tech giants will look to do the same. Either way, eSports tournaments have come a long way – they’re now a lucrative business in their own right.

Will eSports become as popular and profitable as traditional sports? Are technological businesses and investors more likely to finance eSports teams over traditional teams? Which other industries could the eSports scene disrupt? Comment below with your opinions.