The Future of Esports: Convergence, Interactivity and Monetisation

3 min

Competitive video gaming has been around since the early days of the medium, but the industry had to wait until the 1990s for the debut and subsequent evolution of what we now recognize as esports tournaments. Based initially around fighting games such as Street Fighter II and strategy titles like StarCraft, they started taking off with first-person shooters such as Quake and Counter-Strike, with interest accelerating through the early part of the 21st century in conjunction with increasing penetration of high-speed internet.

It is no coincidence that esports interest still maps strongly onto countries which saw the early development of sophisticated broadband infrastructure, such as South Korea. In recent years, the launch of dedicated streaming channels such as Twitch and the establishment of big money leagues by games publishers looking to grow additional revenue streams have seen interest ramp up dramatically.

Consumer engagement with games has also changed dramatically over the past 10 years; watching esports and game video content is becoming as important as actually playing. Games and esports analyst Newzoo predicted that over 453m people worldwide would watch esports in 2019, a year-on-year increase of 15%, with revenues growing to $1.1bn – up 26.7% year-on-year.

North America will generate $409.1m of this, while China has the largest regular audience at an estimated 75m. These viewers will account for a revenue of $210.3m. The most engaged audience is in South Korea, with 12% of its online population identifying as esports enthusiasts (source: Newzoo Global Esports Market Report 2019).

The MEA region’s appetite for esports is growing fast thanks to rapid urbanization, advances in IT infrastructure, a young-skewing demographic and the increasing popularity of mobile gaming. Games companies are capitalizing on this, with events like the Nexus Arabia 2019 League of Legends event organized by Riot Games, held in Saudi Arabia last month, which featured a prize pool of $850,000.

A common view in the esports industry is that we are yet to see the literal ‘game-changing’ game that will really launch esports into the mainstream and bring global engagement to the next level. It is plausible that esports viewership could one day match and exceed the viewership in the traditional sports market. The two markets are already taking business tips from each other, with esports emulating traditional sports’ drive for sponsorship and media rights, and traditional sports looking to direct digital methods to monetize fans, particularly the hard-to-reach younger demographic.

Twitch as a viewing platform for esports has been instrumental to the growth of the industry. It allows both gamers and esports competitors to reach an online global audience, while enabling viewers and fans to access live gaming content and events from anywhere in the world. Twitch Extensions provide a framework for an overlay of new experiences and interactivity, from heat maps and real-time game data overlays to mini-games, music requests and leaderboards.

Interestingly, this growth in esports has shown the traditional sports industry that the unpredictable millennial demographic is still interested in watching and playing competitive sports – albeit a different type of sport, with varied skill sets and an altered viewing experience.

Esports has shown the traditional broadcast industry that high-quality broadcasts with top talent, based on often complex games, can still reach tens of millions of fans. These broadcasts are typically done over IP on streaming platforms, and not behind a paywall – a different model than that typically expected of traditional sports consumption. That said, one of the obvious gaps is broadcast monetization; esports still needs to evolve considerably in this area. It is not likely that esports broadcasts will move entirely behind a paywall in the future, but we will probably see more initiatives like Riot Games Pro-View, where richer, more engaging viewing experiences will be exclusive to subscribers.

Esports tournaments place heavy demands on networks and demand high capacity, low latency and extremely robust connectivity to function properly. As esports continues its upward trajectory, publishers, esports tournament organizers and content rights holders will all be relying heavily on broadcast and connectivity service providers to ensure guaranteed, fast and redundant access to the bandwidth they require to continue to grow audiences.

Ricardo Rodrigues is Head of Business Development – Americas at Telstra Broadcast Services.

 

This article was written by Guest Columnist from Broadcast Pro Middle East and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.