eSports: What Is It and Why Should You Care?

Throughout my high school years, I was a “gamer.” I spent many nights playing Gears of War, Splinter Cell, and Halo on Xbox, collected all the consoles and accessories, and spent too much time playing online with friends. For us, it was cathartic, comedic, and just plain fun. As we got older, I outgrew this hobby and video games slowly faded from my life.

A few years ago, I was catching up with one of my old gaming friends. To my surprise, he had left Cornell to move to the west coast to play League of Legends professionally. Initially, I was shocked by the audacity of such a huge life change. Over time, and with more exposure to his new world, I learned that my friend was onto something. Today, he is a premier coach of a highly respected team. This was my introduction into the world of eSports.

Electronic sports, better known as “eSports,” or professional video gaming, has grown explosively since 2010, largely due to the introduction of live-streaming services like Twitch and overall advancements in connected and personal tech. With double digit growth in the past couple years, sellout crowds for live championships at major venues like Madison Square Garden, and several universities offering both eSports scholarships and intramural teams, the industry is well on track to reach a $1 billion valuation by 2019. While eSports, defined by rapid growth and fanatic fandom, still has a fair bit of growing to do before it is on par with traditional professional sports like baseball, football, or soccer, the industry is ripe with innovation opportunity for both businesses and individuals.

Here are five key opportunities to be aware of in the eSports world:

Opportunity 1: Bring the eSports World to Life

Stadiums are the undisputable home of fandom for traditional sports teams. The increase of live eSports tournaments and viewership has driven the need for well-equipped venues for gaming fans to congregate. Large scale tournaments are already taking place at major venues like the Staples Center in Los Angeles, but these venues aren’t built from the ground up for eSports viewing. While team-specific venues may never be necessary for individual eSports teams, there is immense opportunity to rethink the traditional stadium experience.

The first eSports arena in Oakland is scheduled to open in Spring 2017, and will be the first of eight stadiums to be built around the world. Building on this model, we will see an opportunity for brands to cast their name into the world of eSports through partnerships and co-branding, much like modern traditional sports stadiums today. But eSports has a unique advantage over the traditional stadium experience as it is grounded in technology. New forms of communication or viewership naturally align with the eSports fan experience. For example, while the options VR can provide for new viewing angles at a traditional sports stadium are limited (the view would need to be on the field or attached to a player), VR could provide an entirely new way to watch eSports. Viewers could sit in a virtual stadium and see completely different angles of the games they are so used to watching in two-dimensions.

Opportunity 2: Create a New Frontier for Fans

The eSports ecosystem is comprised of a number of franchises that currently pull in millions of dollars a year. That number is likely to grow even faster as eSport teams become part of a larger fanbase. Today, both new and old franchises have received ongoing investment from or have been acquired by venture capitalist firms, ex-professional sports players, and even traditional professional sports teams. This trend has emerged because it is strategic: the possibility of owning a popular and successful franchise in eSports comes with the chance to build a lucrative brand over multiple eSports, versus just one team like in traditional sports.

This is a highly attractive investment for traditional sports teams, as an already established fan base could expand into a range of budding eSports. For example, the Philadelphia 76ers recently bought Team Apex, a successful League of Legends team, and could expand beyond Massive Online Battle Arenas (MOBA’s), which is where League of Legends resides, into other categories like First Person Shooters (FPS’), Strategy, and Fighters. As the eSports industry continues to develop and the teams within them grow their fan base, we will see a switch from entirely vertical team fandom (one sport, one team) to horizontal fandom (many sports, one team).

Opportunity 3: Remove Broadcasting Barriers

A major contributor to the growth of eSports has been players’ and teams’ ability to live-stream their gameplay through online platforms like Twitch, a movement that will likely become the “standard” overtime. In eSports, streaming has led to a surge of celebrity players and individual broadcasters, and only recently have platforms themselves become streamers of major eSports events through partnerships, with TBS even streaming ELeague, a professional league for the popular game Counter Strike, on live television.

As traditional sports become more democratized, with content shifting from major broadcasting networks to online streaming, and social media platforms like Twitter buying the rights to NFL Thursday Night Football, the two worlds will undoubtedly meet in the middle, leading to platforms that can become a sandbox for free, “all-sports” broadcasting. This in turn will create a massive opportunity for individuals and organizations to generate their own personal sports content – from providing unique angles (like Snapchat) to personalized commentary (like YouTube) for anyone to consume.

Opportunity 4: Take eSports to the Streets

While there are a multitude of online platforms where gamers can both casually and competitively play, these haven’t yet been organized into a structure similar to what we see in traditional sports. In leagues like the MLB or Premier Soccer, players are able to participate in structured minor league teams, and in time work their way up the ladder to the top tier. In eSports, major and minor leagues specific to each game don’t exist yet. As of now, there are many third party platforms (like MLG and ELeague) that span many games and many skill levels; in due time these platforms will fade as games like League of Legends continue to own and promote their own competitive league.

For these third party platforms, there is actually a major opportunity that few are capitalizing on. Hint: it isn’t online. In the way that basketball has intramural leagues through which casual players can compete in person, eSports needs its version of a physical place where gamers can congregate and play competitively. On the west coast, the eSports Arena in Orange County has spearheaded this concept, providing a subscription-based video game agora for the casual gamer. As this concept begins to rise in popularity, we will undoubtedly see various “training grounds” defined by equipment quality, amenities, and skill level.

Opportunity 5: Merchandise Through Personalization

Merchandising is a major part of sporting fandom, as it provides an outlet for fans to show the world that they are part of something larger than themselves – a community of likeminded, passionate individuals. While community is the driver of merchandise in traditional sports, the market for eSports merchandise, which is primarily virtual, revolves entirely around individual expression. Gamers purchase armor and weapon skins, character upgrades, and special attire to transform their character into the ideal online representation of themselves. This level of self-expression is an aspect of the eSports market (and video game market in general) that hasn’t been fully exploited. For traditional sports, a custom jersey is about the highest level of personalization possible, ultimately depicting an aspiration or idolization. eSports, however, can provide physical offerings of items that gamers consider to be integral to who they actually are in the virtual world. This, in turn, would allow video game merchandising sales to break into the physical market beyond simple fan gear, and create an entire market based off the idealized self.

Video gaming has forever been a cult culture filled with stigmas of basements lit up by TVs, greasy controllers, and a perceived waste of time. Today, this view is shifting. With the general acceptance of screens and technology, video games have become an accepted form of education, hand-eye coordination and motor skill improvement, relaxation, and now a professional career. This budding industry is not, however, exclusive to those who perform. As eSports continues to grow, the infrastructure and ecosystem around it will flourish, providing an abundance of opportunities for those in, on the fringe, or outside eSports to create points of differentiation through innovation.