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Money lags but e-sport’s popularity soars
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IT is a paradox pitting popularity against relative pittances — e-sports have exploded into the global consciousness but the big money has not yet appeared pitchside, or screenside.
Participation has soared as virtual games gain traction, with a worldwide fan audience now estimated at 280 million, approaching that for the NFL.
Such a leap in growth has helped fuel talk that competitive electronic sports, or professional gaming, could even soon become an Olympic “discipline.”
But even if the League of Legends final drew a huge audience at the National Stadium in Beijing earlier this month, the sector has yet to mature economically and needs to secure more funding in order to secure a longer term foothold in the sporting world, analysts say.
And the question of how to open the revenue stream sluice gate is complex.
“This year, e-sports should earn a little over 850 million euros (US$990 million) and studies show that, come 2021, we’ll reach turnover of some 3 billion euros,” said Laurent Michaud, director of studies at Idate, a leading European think tank on the digital economy. “But that’s set against a global video games market worth more than 65 billion euros.”
How to ramp up low monetisation is exercising minds given that an e-sports fan brings only 3 euros to the table annually on average, according to a recent study by Nielsen Sports.
Soccer generates typically some 10 times more.
One reason for the disparity between the virtual and the non-virtual sporting universes is the difficulty of engaging with e-fans via traditional broadcasting outlets.
“Our football stadiums are still sold out but clubs shouldn’t feel too safe because the crowds are not so young. Traditional sports don’t have to be afraid of e-sports, TVs should,” said Tim Reichert, chief gaming officer at German top-flight football club Schalke 04.
“We’re still at the point we have to educate broadcasters and outside sponsors on how to interact with this complicated audience, because they don’t watch TV and they all have ad blockers,” Reichert said.
Many e-sports fans are used to receiving their visual fare for free via platforms such as YouTube, rather than switching on the TV set. Traditional media are still taking baby e-steps after coming late to the genre.
“We’ve had a partnership with BBC 3 which is a really good space to explore it, and with some success,” said Barbara Slater, who heads the BBC’s sports coverage.
“We’ve covered an e-gaming event live. I just think we’ll step forward cautiously but there is no question the interest and the amount time and engagement that e-sports is achieving with our audience.”
An additional obstacle is dubious image a substantial swathe of society has of video gaming and e-sports in particular. “People are afraid of what they don’t understand. There is still a generation that doesn’t know anything about video games. Twenty years ago that was a majority, now it’s 50-50 and in the future there will be less people that don’t understand it,” said Ralf Reichert, founder of Electronic Sports League, the oldest and largest-scale organizer of e-sports competitions.
“The simple changing of generation will remove the fear” of making the e-leap, says Reichert.
The generational shift is moving in e-sport’s favor, says Andy Dinh, a former star gamer now heading his own team.
In his view, “today’s fans take their children to watch an e-sports competition as some take theirs to watch the baseball. These are the upcoming generations of fans.”
That will increasingly bend the ear of sponsors and broadcasters when it comes to showing and investing in competitions which are increasingly set to become unmissable attractions on the e-circuit. “Our sponsoring costs are rising and will continue to do so, but so will our earnings,” insisted Bracken Darrell, president and chief executive officer of IT device developer Logitech.
IDate’s Michaud weighs in that “the future of e-sports is not on television, everything is on the web.”
He added: “Broadcasting rights will concern platforms, there will be (rights) for the organization of events, everything connected to sports betting could comprise important revenue.”
Facebook or YouTube, cited as potential broadcast rights buyers for sports events, could be tempted by e-sports instead of more traditional sports that they might judge a less profitable return in investment terms.
“Football is much bigger and it’s going to be there for a long time but it’s totally fine,” insisted RESL’s Ralf Reichert.
“If e-sports becomes the second largest sport in the future, everyone in the industry will be very happy with that!”
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