The future of esports

The big question for those us in eSports right now is, “how big can this get?” Video games is THE burgeoning form of entertainment at the moment. While the movie industry is struggling to find the next series of blockbuster movies to prop up their ailing fortunes, GTA V and Call of Duty: Ghosts are pulling in billions of dollars of revenue. Where the TV is in the midst of a recent renaissance, video games have been enjoying constant new heights as a business and as an art form for close to 15 years. Where as newspapers are desperately trying to find a source of revenue to replace the advertising rivers of gold that have fled to the internet, online gaming and distribution has reached critical mass, with eager consumers on every continent hungrily gobbling up gaming content.

Esports however, is a whole new ball game so to speak. While single and multiplayer gaming is a tried and true business, video games as a spectator sport is still at its very early stages and we are yet to see if eSports has a viable, long term future. I would contend it does and I think a look at the history of regular sports can help us chart what sort of future that eSports might have.

For the purpose of comparison, I will use the history of my preferred ball sport – Australian rules football. You could probably do the same overview for any sport (they all evolve similarly) but I know the history of Aussie rules better than any of the others.
Aussie rules is a derivative of rugby, the English sport. Some smart fellow decided that rugby was too slow or something so they came up with a set of rules that involved more kicking and a more free-flowing style than rugby. It probably started with a handful of people playing the variant for fun but eventually, it took hold and people started forming teams and playing each other. After a while, the competitive nature of humans being what it is, those teams start playing other teams in a league. The oldest league, the Victorian Football League, was formed about 150 years ago and given that it had lots of teams in a relatively populous State, it became the pre-eminent league in Australia probably pretty quickly.

As time goes on, the more successful teams survive and the others die out. The teams that survive attract a more stable following. Humans being what they are, parents pass down their team allegiances to their kids – fans breeding more fans. Eventually, those teams have enough fans that they have a sizable financial base so they can expand – they can pay to train or recruit staff, they can develop better facilities, etc. After a while, there are enough fans of the sport that media organizations will bother to cover what is going on – first in news reports but eventually with broadcasting the events. In the AFL’s case, it was radio and then TV that would show the games. By now, successful teams will have a very solid fanbase, sometimes multiple generations of fans from the same family barracking for their team. Sponsors will increasingly seek out the teams, giving teams even more financial clout to develop their squads. Teams might die out still but it will take a lot longer than when the league started.
After a time, the pressure to compete will drive players to increasingly focus on playing in order to keep up. Teams will be competing for the best talent so they start offering money to players to play. What started as a purely amateur competition will be driven to be semi-professional because of the demands of teams, players and fans. This process of growth and professionalization will continue on and on until teams are faced with the prospect of going fully professional – players get paid full time to devote their energies to playing, backed by full time support staff.
Australian rules football went fully professional, like many sports in Australia, during the 80s and by the early 90s, the VFL became the AFL – the Australian Football League, now a multi-billion dollar sports industry all on its own.
So what are the factors that enabled all this to happen? Devoted fans with money to spend, passing down their love to the following generations; fierce competition pushing teams to seek any edge they can over their rivals; and the capacity to broadcast the sport to a wider audience. By comparison, where does eSports stand? In a pretty good place to grow, in my view.

I won’t dwell on it much but it should go without saying that the worldwide competition between teams in League of Legends is fierce. That only a handful of teams from season 2 Worlds made it to Worlds in season 3 shows how cutthroat the competition is. This drive to succeed is what will push to teams to be increasingly professional, in turn spurring the growth of all the business and structural demands that surround eSports.

A major advantage eSports has had in its development over its regular sports rivals is that we don’t have to go through less efficient means to broadcast the sport to its fans. Traditional sports had to make use of the labour- and capital-intensive mediums of radio and TV to broadcast the sport in their own localities, both of which require a sizable population of fans to make it worthwhile and making it all but impossible to reach a worldwide audience easily.

By comparison, high speed internet is becoming a reality for a majority of people, giving people access to streaming content for very niche interests that previous generations could have never had access to. The vast array of League of Legends content is staggering when you just look at the pro scene. You have your major leagues of NA and EU LCS and OGN, both of which have so much content that a regular person could barely keep up with it all. Add to that the somewhat less available, but no less prolific, GPL and LPL. Then you have the smaller regions like Latin America, Turkey, Brazil, OCE and Russia that all have their own competitions. And if that wasn’t enough for you, there is multitudinous individual player streams, running from pro-players and full time streamers, all the way down to amateur players who do it for a lark. The Internet enables all of them to have a platform to broadcast, enabling eSports to grow and reach an audience in a way that traditional sports never could.

But in my mind, the biggest thing going for eSports is demographics. The age of the average gamer in places like the US, Europe and Australia is in their early 30s, meaning the first generation of kids in the Western world to live with the reality of home gaming are starting to enter a stage of life where not only is their earning capacity starting to really ramp up but they are also starting to have families. What we will be seeing in the not-too-distant future is parents passing down their love for Fnatic or TSM or Immunity down to their kids, who then growing up never knowing that the world has changed.

It might have be unimaginable for those 150 years ago that someone might get paid to play football full-time but it is now a reality for millions of young people in Australia, as well as being the dream of millions more in a whole slew of sports across the world. When I was growing up (I’m 30), to say your aspiration was to play video games was a laughable suggestion but now, we’re seeing the dawn of a new age where it won’t seem so stupid. Within a generation, the old mindset that playing games was only for lame nerds in basements will be swept away and the oldest players in our current generation of players will be the forefathers for pro-gamers to come.

On top of this, economic liberalization in Asia has created a middle class vast beyond imagining, a middle class that will undoubtedly want to play video games just like Western kids, and giving eSports literally billions of potential customers. One-third of the whole world’s population is in two countries, China and India, and they are undergoing massive economic transformation, eliminating poverty and creating a group of young people who will be as eager to play games as any other. Even if the smallest fraction of them get into League of Legends, we’re still potentially talking of tens or hundreds of millions of gamers. That is a large audience for teams to pitch their brand at and we have barely scratched the potential that lies there.

So what does this mean? Two things: firstly, eSports is here to stay. The road might be rocky for individual teams or formats but I think there will be a longevity to people getting paid to play, shoutcast or commentate on eSports. Whether League of Legends will still be around in 150 years, I have no idea – that will depend on Riot’s ability to meet the expectations of its fans and continue to deliver a great product at a price people are willing to pay. But can savvy people get paid to do video games in the long term? Absolutely.

Secondly, entrepreneurship will be what separates those who prosper and those who fail. Unlike the established sports, eSports is very much operating in a free market. There are no player monopolies or entrenched union interests or the like, who can rig the system to extort money from otherwise unwilling people. You succeed by finding what people want and giving it to them. Like all markets, some will have long term success; others, short term success; many, no success at all. For every Richard Branson or Steve Jobs, people who define what it means to be risk-taking entrepreneurs, you have dozens who have limited success and there are thousands who gave it their best and went nowhere. But while the specifics of entrepreneurial success might look different, the characteristics are very similar – drive to succeed, a willingness to learn from failure, hard work, risk taking, fresh thinking, flexibility and perseverance.

I am hopeful about a great and wonderful future for eSports – I think we are at the cusp of a world of opportunities for nerds that previous generations couldn’t even dream of. Esports is here to stay and if you think you have what it takes, I would encourage you to be bold and work hard because as Terrence said, fortune favours the bold.


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