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Posted by AGORACOM-JC at 10:57 AM on Monday, October 7th, 2019

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Are eSports: the future of sport?

  • With permanent eSports team franchises being set up across the GCC; talk of eSports being included in the 2024 Olympic Games; and revenue expected to top US $1.5 billion per year by 2020,
  • Playing video games has the potential to change the sporting landscape as we know it.

By: Peter Iantorno

The year is 1972. David Bowie is blowing impressionable teenage minds the world over with his gender-bending alter ego Ziggy Stardust; U.S. swimmer Mark Spitz is smashing world records in the pool at the Munich Olympic Games; and, on the evening of October 19, in Stanford University’s Artificial Intelligence Laboratory, two dozen of the university’s geekiest students are gathered round the lab’s only PDP-10 computer to take part in the world’s first ever computer gaming tournament. The tournament pits players against each other in an arena-style game called Spacewar! where competitors play as ships with the aim of torpedoing their enemies. The night is long and booze-fuelled, but eventually the winners are decided, as Slim Tovar and Robert E. Maas win the team tournament, and Bruce Baumgart comes out on top in the free-for-all competition, bagging the coveted first prize of a year’s subscription to Rolling Stone magazine.

Fast-forward 45 years, and the gaming tournaments of today fill arenas with thousands of spectators and generate millions of dollars-worth of sponsorship revenue – a world away from the late night basement-dwelling events of the past. No longer are gamers sneered at and written off as immature man-children living in their parents’ basement, unable to get a girlfriend and with worse employment prospects than a criminal in a kindergarten. Nowadays, pro gamers are hot property, with professional teams (including real-world football clubs such as Paris Saint-Germain, Manchester City and Glasgow Celtic) signing-up some of the world’s top players on big-money contracts offering annual salaries, performance-based bonuses, travel expenses and even health insurance.

“Back in the day, you couldn’t depend on eSports as a way of making a living, but nowadays it has improved in the way that some clubs or sponsors offer you a fixed salary,” says pro gamer Sayed Hashem, better known by his gaming handle, Tekken Master. “It’s great to have a salary to fall back on when you don’t win enough money from tournaments. There are also other ways of making a living out of pro gaming, and once you have reached a certain level, you can get stream revenue and get hired to do public appearances. For now, it is enough to pay the bills.”

Hailing from Bahrain, 22-year-old Hashem joined local team Nasr eSports in early 2017, and already he has built up a reputation as one of the region’s – and the world’s – fiercest online competitors. He has a list of honours as long as your arm – (a two-time Mortal Kombat X Middle East Champion, twice runner up in the Mortal Kombat X International Cup, the first Arab to reach the EVO Championship Series Grand Finals, and currently one of the top eight Injustice 2 players in the world) – but success doesn’t come easily for him. “I train every day so I can perform well during tournaments,” he tells Esquire. “It’s hard for me to find high-level practice partners in the region, so I get my brothers to learn specific tactics and mimic my upcoming opponents, so I can develop new strategies.”

Fellow Nasr eSports team member Adel ‘Big Bird’ Annouche is also making a splash on the international scene. A two-time Middle East Street Fighter Champion, he is currently third on the European leaderboard in this year’s Capcom Pro Tour and ranks in the top 32 Street Fighter players in the world. This December he takes part in the Capcom Pro Tour Finals in California, which has a first prize of US $120,000 (AED440,000) and a total prize pool of  US $250,000 (AED918,000). “I’m going to train hard for this event,” Annouche says of his most important competition to date. “Hopefully, I end up doing well, because winning there could open up lots of opportunities not only for my eSports career, but for the club as well.”

The business of eSports 

With prizes topping AED360,000 for a single tournament, it’s easy to see how a career in eSports could be a lucrative one. But it’s not just the players getting rich off eSports: according to leading market researcher Newzoo, the industry generated a whopping AED1.8 billion in 2016 – a 51 per cent increase on 2015’s AED1.2 billion, which itself was a 67 per cent increase on the previous year. The research predicted that by the end of 2017 the industry will have an annual revenue just shy of AED2.5 billion, and by 2020 yearly revenues will jump to around AED5.5 billion, with eSports reaching a total audience of 589 million – almost double the population of the U.S.

But where is all the money coming from? Sponsorship and advertising certainly plays a major role. The biggest backers so far have been technology companies including Microsoft, Samsung and Intel, however increasingly consumer brands are investing in eSports, with the likes of McDonald’s, Coca-Cola and Nike all contributing to an estimated advertising and sponsorship revenue of AED1.5 billion in 2017 alone. The rest of the income is derived from investment from game publishers (AED426 million this year), media rights (AED350 million) and ticket and merchandise sales (AED235 million), respectively.

“We have worked with Coca-Cola, Red Bull, Nestle, Unilever and P&G brands, among many others that are clear examples of mass brands looking to connect with new audiences through relevant messaging,” says John Paul Lacey, managing director of Power League Gaming, which organises eSports leagues and tournaments throughout the Middle East with prizes often topping AED100,000. “It’s not just tech brands and manufacturers of accessories that support eSports… Those that understand gaming better and see the opportunities eSports audiences can offer quickly realise the demographics are not just teenagers, they are broader and diversifying more.”

And while this level of financial growth is impressive by anyone’s standards, it’s only the start for a sport that, according to Newzoo CEO Peter Warman, could potentially become “one of the top five sports in the world” within the next five years. “In terms of revenue it is still dwarfed by other sports,” Warman told the BBC earlier this year. “But considering an audience of around 160 million is watching eSports frequently, and another 160 million watch big championship games, it already compares to medium-tier sports.”

In a move that is likely to speed up that growth significantly, one of the industry’s biggest players, Riot Games – owner of the incredibly popular League of Legends game and leagues – announced in June this year that, starting in 2018, it will operate a new franchise model for its North American League Championship Series, which will see a permanent lineup of teams who each pay an annual AED36 million fee for guaranteed entrance to the league.

It’s a move that has the potential to revolutionise the way eSports is run, and opens the door for sponsors to make much more lucrative long-term investments, safe in the knowledge that the team they back won’t be relegated from the league after a season of performing badly. “It’s harder to make long-term investments as a brand if you don’t know if the team is going to exist,” said Jarred Kennedy, who co-heads Riot eSports, at the time of the announcement. “The changes are going to make it much more palatable and approachable for brands to come in and invest.” As part of the franchise system, Riot also announced a minimum annual salary of AED275,000 for individual players in the league.

Game over? 

While it may seem to be a step forward for eSports, Riot’s franchise model hasn’t been met with universal praise. Power League Gaming’s John Paul Lacey is not convinced. “I don’t like the franchising model,” he tells Esquire. “If the leagues are setting buyin requirements at prohibitive rates then perhaps in future only the super elite teams will be able to afford those rates anywhere… This will reduce the level of competition between upcoming teams and you run the risk of turning eSports into a further extension of the publishers marketing inventory, instead of a genuine sport from the grassroots upwards. Teams would no longer gain entry to competitions based on player ability, but based on their Instagram following and the number of videos they can put out per day.”

And Lacey isn’t alone in his doubts. Following Riot’s franchise announcement and subsequent minimum salary requirement for players, Paris Saint-Germain eSports pulled its team out of the popular League of Legends tournaments, stating that they had “numerous uncertainties” about the future economic model, “partly because of the strong inflation of pro-gamers salaries”.

While nobody can argue with the impressive growth eSports has achieved over the past few years, that fact that there is suddenly so much money at stake means insider squabbles are inevitable – and for an industry still in its infancy and still struggling against the long-held negative public opinion of gamers, this could be extremely damaging.

“Unfortunately some gaming communities are more toxic than others,” says Anas AlHaki, cofounder and brand manager of UAE-based team Yalla eSports. “The way to grow eSports is to work together. Teams should only be enemies on the battlefield or in the arena during an official match. We have to support each other to help build the scene together. The scene only grows if we all grow,” he adds. Along with cofounder Klaus Kajetski, AlHaki built Yalla to be one of the most inclusive eSports teams in the Middle East, with more than 20 players representing 12 different nationalities playing for them.

And it’s not just financial infighting that threatens to bring eSports to its knees. Just as allegations of doping are rife in traditional sports from athletics to football, eSports has its own struggles with players taking performance-enhancing drugs such as Adderall – a prescription medicine containing amphetamine and dextroamphetamine. Used to treat attention deficit hyperactivity disorder (ADHD), Adderall helps shorten reaction times and enhance focus – two rather useful traits in the world of eSports. “There will always be people willing to cheat to try and gain advantage,” says Rory MacFadyen, who previously worked at EA and Nintendo in the UK and is now sports planning director for Middle East Gaming, which ran a FIFA and Overwatch tournament in Dubai earlier this year with AED35,000-worth of prizes. “It’s something tournament organisers, game developers and other teams need to be aware of and govern.” Yalla eSports’ AlHaki adds: “This is still very new. Luckily it has already been recognised and methods to fight this [such as drug testing, which has now been implemented at many major events] have been found.”

Going for gold

In all likelihood, financial wrangling and a tiny minority of cheats will prove irrelevant to the long-term success of eSports. The real deciding factor could end up being the level of recognition from outside of the industry. Will eSports ever be considered as a ‘proper’ sport, rather than a lucrative pastime for teenage boys? To that end, this year the industry received its biggest boost yet, as it was announced that eSports will be an official medal sport at the 2022 Asian Games in China, which is the world’s second largest multi-sport event after the Olympics, with more than 10,000 athletes from 45 national delegations taking part in the most recent games three years ago in South Korea.

And breakthrough could be a sign of things to come. In August, co-president of the Paris Olympic bid committee Tony Estanguet confirmed that talks between the International Olympics Committee and eSports representatives are ongoing with a view to including eSports as an official medal sport when the Olympics comes to France in 2024. Soon eSports could be valued just as highly as any other sport, and with Olympic medals on offer, the prospect of governmentfunded eSports players becomes all the more real.


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