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20180225_190732

Explosion of Esports

(Author’s note: as each game and following are much different from each other, majority of the content in this article follows the game I follow the most: Dota2.)

Esports, standing for exactly what you might think: electronic sports, encompass a wide array of games where highly skilled players go against each other for constantly rising price pools. Those games in most cases are team-based where just like in another sport team cooperation and individual ability are vital. Tournaments for some of the oldest games have been going for over 15 years now, but it is only in recent years the scene has moved to more of a mainstream, and stigma of playing games began to fade away as huge winnings and outside support started raising.

Between the time of starting this article and publishing it I was given an incredible opportunity to see a Dota2 tournament first hand. I’ve decided to pick up small things there to elaborate further on topics I wanted to mention regardless. Therefore, firstly I’ll talk a bit about what I saw at the event and secondly more about broad and financial developments of the scene.

The tournament was ESL One Katowice Major, the 10th Dota2 ESL One. Katowice became the place to host big tournaments after a Polish squad took 1st place in CS:GO in 2014, causing the home crowd to go ecstatic, paving the way for the best European crowd. Before the tournament, Mercedez-Benz announced again that the MVP will receive a brand new 50k car. Their involvement made them one of the premier sponsors for the event, partnering since ESL Hamburg 2017. In fact, the VP marketing of the company sees a lot more ties with the scene, calling it complementing “existing sports sponsorships”. As I arrived at the hotel, instead of taxis, there are black Mercedes minivans with ESL logos taking players from the arena and back. On the day of the tournament, in -10 degrees weather free entrance queues are forming 2 hours before gates open, luckily, I was given a pass, shocked what I saw was the same amount of people but with tickets. At the venue you had the usual food courts and merch shops, almost like any other sport event. The booths are taken by teams, hardware companies, Pringles; electronics chains’ advertisement is being passed around, Katowice tourist office has a room too. Entering the seating area was even more shocking, looking at the stage made for this weekend I can’t imagine how much it cost to set up.

Throughout the games, “post-game analysis brought to you by Vodafone” can be heard, I am also constantly reminded of the MVP vote and what car they’ll get. I won’t get it, but I can enter a raffle to try winning one of ten other Mercedes offered instead. As the second day of games starts and grand finals are approaching, there is a performance break, the stage explodes in fire as the light show begins complementing Dada Life and his performance. At the end of it all, as the champions grab their well-earned trophy, the stage explodes in confetti and once again fire. They just won 400,000$ and a car for one of them from the vote. They don’t get a break though, as I’m leaving the hotel at 5am to fly back to reality, the teams are leaving to fly to another tournament, again with 1,000,000$ prize pool but this time in Bucharest.

I already mentioned Mercedes sponsoring Dota tournaments. Each team is picking up more mainstream sponsors, beyond companies with natural ties to games and people playing them. This creates a cycle of more exposure, more players or spectators and finally bigger market revenues, encouraging more companies to invest, feeding the loop. This is also encouraging competitors to go up against each other. Mentioned earlier, ESL was sponsored by Vodafone, PGL Bucharest on the other hand will have T-Mobile as their mobile network sponsor.

In 2013 communities were impressed when Pringles began sponsoring a League of Legends team. In 2017 Time Warner Cable was being sued on behalf of Riot (developers of League of Legends) and Netflix for slowing down internet speeds. Between the same time, in Dota2 scene, The International 3, annual, and biggest tournament introduced crowdfunding mechanism to the prize pool. In 2013, with much optimism the pool rose to over 2.8$mln from the original 1.6$mln, in 2017 for The International 7 with the same base, it rose to 24.7$mln. In 2018 support of the scene increased with the German SDP recognising the growing importance to the people. At the same time, there are problems with combining Olympics and the nature of many games, some members of IOC are trying to push for alternatives due to the perceived negative side effects to the society from playing games, which are yet to proven despite many attempts to do so already .

Taking research done by SuperData, the biggest market research esports organisation, this explosive growth is set to continue. By 2020, the market revenues are said to reach almost 2$bln from 1.6$bln projected this year. Most of this comes from advertisers and investment, showing the increasing importance of exposing the brand through esports.

Setting the stage for ties with older sports, in 2016 Team Liquid sold it controlling interest to group of investors including Peter Gruber himself. This shows that bridging between conventional sports and the electronic version began, the latter benefitting from the expertise of former during its growing stages. Furthering the investment possibilities, Blizzard Activision created a league system for Overwatch, much alike that of standard American sports leagues, allowing for more local investment compared to other games with regions being tied to continents rather than cities. The company stated that it was just the beginning, with a lot more growth in the plans.

There is no doubt that esports is growing and has no intentions of stopping any time soon. The only problem I see is if the investment by other parties will not live up to the expectations in the long term. The exposure will grow constantly with every new sponsor and their competition entering the market, the question is if the pay-out at the end will be worth their time. Nonetheless it all began with people having fun and wanting to get paid, I just hope it will remain that way for years in face of corporate world.

 

 

 

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