A couple of weeks ago, I tuned into ESL One Cologne to watch the best of the best in Counter-Strike: Global Offensive. I challenged someone who had never watched an esports match to join me, since I was curious to see what their reaction would be. A couple of rounds into it, my friend exclaimed, “This is a lot like sports, except that it’s actually fun to watch!”
Her astonishment does make sense on an intuitive level, even for a gamer; why in the world would you want to watch someone else play games if you can play yourself? Although we’re talking about an exploding segment of an absolutely huge industry in its own right, the perception that video games are just for kids goes back decades, when companies like Nintendo had to stress how family-friendly their products were in the wake of the 1983 market crash.
Well, the times, they are a-changing, and while it’s still fun and games, it’s also a lot more than that. The most recent forecast from Goldman Sachs projects annual revenues in esports to grow from $655M in 2017 to $2.96B by 2022.
Early Years of Competitive Gaming
Those of us growing up in the 80s and 90s might still remember the excitement of the Nintendo World Championships and televised video game shows. With initiatives like AMD’s now-defunct Professional Gamers League and id Software’s still-ongoing QuakeCon, by the end of the last century, signs that something big was budding were all but obvious. In 1997, a Quake competition called Red Annihilation made history when winner Dennis “Thresh” Fong was awarded with id Software CEO John Carmack’s Ferrari 328 GTS.
On the other side of the globe in South Korea, the then-recent financial crisis and resulting unemployment coupled with a proliferation of internet cafés created a perfect environment for esports to grow. Already in 2000, the Korea e-Sports Association was founded as a branch of the Ministry of Culture, Sports and Tourism to help promote the fledgling industry. Together with the Russian eSports Federation founded in the same year, this was one of the first official governing bodies to be formed, followed closely by the Romanian Liga Gamerilor Profesionisti in 2002. By 2008, esports organizations from nine countries around the world had joined forces to found the International Esports Federation.
From Geeky Niche to Mainstream Dish
Fast-forward another ten years to today. The industry has by now seen massive development, both in terms of popularity (with players as well as viewers) and standardization. The IESF has grown substantially from the founding nine member nations, as they’re now active in over 46 nations. Esports has grown out of the “is it sports though?” argument long ago, as competitions in several popular titles are poised to feature in this year’s upcoming Asian Games. While esports will be a “demonstration sport” only in the 2018 program, it has been confirmed as a full-medal event for the 2022 games in Hangzhou, China. And while esports won’t be part of the upcoming Olympic Games in Tokyo, the International Olympics Committee is reportedly in talks to include esports disciplines in 2024.
Media coverage has also grown — with dedicated prime time slots on commercial TV stations and even specialized, esports-only channels already well established, it’s no surprise that a battle for media rights is now heating up. In January 2018, ESL announced that Facebook would be the streaming platform covering future ESL One and CS:GO Pro League, triggering some fan outcry.
Not everyone’s hopped on board of the esports train, however. Concerns about the effects of violence in video games and of the increasingly sedentary modern lifestyle on the mental and physical health of youngsters remain a big part of public opinion. In fact, just this year, the World Health Organization added “gaming addiction” to its International Classification of Diseases.
Another often overlooked difference between most conventional sports and esports is the complicated matter of ownership and intellectual property; as The Esports Observer put it, “imagine Spalding owned basketball.” To do this fascinating topic justice, we’ll cover it in more detail in an upcoming article.
And while great strides have already been made in the area of standardization and self-regulation, legislative and other systemic barriers remain. Like in many young and fast-growing industries of old (and new), most of the massive revenues in esports come from sponsorships and media rights (77%, to be exact). Most of the attention and big bucks stay with the elite, with little trickling down to the most vulnerable — the players themselves. Competitors in esports are on average several years younger than in conventional sports, and they are often stuck in a legal conundrum that doesn’t afford them a status fitting their needs.
Combine all of the above with the fact that it’s not uncommon for lawmakers to conflate esports with gambling and sports betting, and you’ve got yourself a cocktail of unfavorable business conditions. Spurred by the upcoming Olympics, the Japanese government has recently started issuing licences for esports professionals that exempt them from gambling laws, similar to Japan’s approach to professional golf, baseball and tennis players. With each country regulating gambling and esports in a different way (or not at all) and stakeholders’ attitudes towards esports varying from supportive to dismissive, it’s not surprising that the industry is at a pro level in some countries and completely grass-roots in others.
So can playing video games be a real sport? Well, besides everything listed above, there is clear evidence that the esports industry operates very much like traditional sports; you have athletes, clubs, managers, sponsors, and fans. Like athletic sports, esports also combats issues like doping and cheating, even if the latter is done with different methods. Esports as an industry can benefit greatly by joining forces with sports institutions (economies of scope and scale) and within a favorable regulative environment.