The eSports they are the growing multi-billion dollar industry you don’t know about. I’ll tell you a little about his story.
From the 10 cents it cost to play the Galaxy Game – the first commercial “video game” machine on record – to the more than 40 million dollars in prizes distributed in 2021 by the winners of The International, the championship of videogame dota 250 years have passed and a whole new social, economic and cultural era that has made what on-line the new paradigm.
Electronic sports (eSports) are not for geeks. It is an entire economic sector around online gaming that is being talked about as the billion-dollar opportunity and that attracts millionaire audiences around the world, an unbeatable candy for sponsors increasingly prone to high-flying advertising investments.
What have you made of the eSports such a relevant actor in the leisure sector? Where does sports end and where does betting begin? How are they revolutionizing consumer habits?
Let’s get past the first screen.
The first eSports
Electronic sports are defined, according to the Cambridge dictionary, as the “activity of playing video games against other people over the Internet, often for money, often in special organized competitions, followed by viewers through this same medium.”
It is not, therefore, just about spending time playing video games: we are talking about multiplayer tournaments in which professionals compete and that combine a hybrid public, both online and in person. Therefore, their social characteristic clearly distinguishes them from traditional video games, which had been an eminently individual pastime.
The antecedent is found in the games Arcadian, those machines from the arcades of the eighties and nineties. There the player no longer competed against himself, in a kind of solitaire, but against other players: it was about leading the ranking.
The first video game truly considered eSports appeared in 1962 at the Massachusetts Institute of Technology. It was called Spacewar! and it had been developed by a group of university students, the best known of which is Steve Russell.
Ten years later, the Artificial Intelligence Lab at Stanford University held a competition for Spacewar! which was called the Intergalactic Olympics. 24 contestants participated. It was the first tournament with the characteristics of current electronic sports competitions, in which players competed for a prize, in this case an annual subscription to the magazine rolling stones.
Then came the Space Invaders Tournament held in New York by Atari (1980) and the first Nintendo World Championship (1990), also in the United States. “Pokémon fever” prompted Nintendo’s macro-events: after the launch of Pokemon Stadium in the year 2000 competitions were held all over the world.
Professionalization of competitions
However, Pokémon tournaments were losing steam while in South Korea eSports competitions were professionalized: players began to consider themselves athletes and games began to be televised, while clubs, sponsors and even player unions emerged.
At the same time, at the end of the 1990s, PC Bangs were born, businesses where you could go and play video games online for a fixed fee. Something like the cybercafé of gamers.
This meant that, with the arrival of the 21st century, a community of players had already formed who competed with each other online. Attracted by the trend, television companies created exclusive channels to broadcast the games. The next step was clear: advertising and sponsorships, with teams like Samsung, SK Telecom or CJ Games.
By the 2010s, eSports had taken off: centers like Ahyeon Polytechnic School in Seoul created their own eSports department and even became something of a performance center for future professional gamers.
This is when history changes and eSports go from being a game to a segment of the sports world with great social, advertising and, therefore, economic appeal.
The three pillars of eSport
What is it that makes an online video game be considered an electronic sport? There are three fundamental factors:
- The video game has to guarantee the principle of competitive equality, allowing the confrontation between competitors on equal terms.
- It must develop a professional sports structure, with competitions, clubs, teams and professional players.
- The development of said sports structure will be carried out in parallel with the development of a media structure that brings together the fan community, media coverage, broadcasts and sponsors.
millionaire audiences
And, as in the case of mass sports, eSports draw crowds. According to data from Newzoo (2022), the eSports audience exceeded 490 million viewers in 2021 and is expected to exceed 530 this year, with year-on-year growth of 8.7%.
The IAB White Paper (2021) estimates that there are more than 2 billion people around the world who know about or have heard of eSports, referred to as eSports awareness.
Regarding the regions with a more developed audience, this report indicates that the Asian market continues to be the one that contributes the most to this number of fans, with more than 530 million people in China alone.
For its part, Spain is considered one of the European countries with the highest percentage of audience and penetration in the region. The eSports reach numbers are increasing significantly in the emerging markets of Latin America, the Middle East and Africa, as well as Southeast Asia.
This is mainly due to the advances in infrastructure and technology that all these regions are experiencing, as well as, especially, the popularization of games for mobile devices.
City without law?
The rapid development of eSports and its indissoluble link to the digital maelstrom has meant that, in countries like Spain, there is still no specific legal regulation. One of the big questions has to do with the professional status of the players. Is there an employment relationship with the clubs? This question is decisive to establish aspects such as taxation, for example.
Another key aspect is the regulation of intellectual property and image rights, which are one of the main sources of income for the industry.
And, on the other hand, if we talk about advertising and broadcasting rights, in eSports we find more complexity than in the traditional media and advertising ecosystem. In addition, streaming platforms such as Twitch or YouTube and certain competitions have their own terms and conditions.
Therefore, the regulation of these sports is terrain to be explored.
eSports, Olympic sport?
If eSports is by its very definition a sport and in certain countries its players are considered athletes, it is worth asking if they could be officially recognized as a sport by the CSD and the IOC and included in the Olympic Games.
KeSPA, the Korean e-sports association, succeeded in getting eSports accepted as a second-tier Olympic discipline by the Korean Olympic Committee in 2015. Two years later, the IOC took a first step by recognizing eSports as a “sports activity”. He rejected all the initiatives that arose to recognize them as one more Olympic discipline until, in the run-up to the Tokyo 2021 Olympic Games, the Olympic Virtual Series (OVS) were held.
It was the first eSports event with an Olympic license, although it only included sports simulator competitions that already have their physical equivalent in the Olympic Games, such as eBaseball Powerful Pro Baseball 2020 (baseball), Zwift (cycling), the Virtual Regatta (sailing), Gran Turismo (motorsport) or rowing in an open format.
2026 will be key
Changes in the theme of esports competitions (focusing only on sports) may make them aspire to become an Olympic discipline and meet the standards set by the International Olympic Committee.
Meanwhile, the sector continues to grow and generate income. The report _Entertainment and Media Outlook 2021-2026 Spain_, prepared by PwC, ranks video games and electronic sports as “one of the outstanding subsectors of the entertainment and media industry”. Its income, according to the study, “will grow by 6.5% until 2026 and will reach 3,131 million euros.”
By 2026, a younger, more digital and consumer-interested global consumer base is envisioned. streaming and in video games than current ones.
Angel Bartolomé Muñoz de Luna, Professor of Creativity, CEU San Pablo University and Sonia Martín Gómez, Professor of Business Organization, CEU San Pablo University
This article was originally published on The Conversation. Read the original.