With Viewership and Revenue Booming, Esports Set to Compete with Traditional Sports
When kids talk about Tyler “Ninja” Blevins and his gaming streams on Twitch, they speak of him as if he were LeBron James or Tom Brady. They analyze the 26-year-old’s every move in the battle royale game “Fortnite.” They quote his kill ratios and stats. They emulate his tactics and moves as they dream of becoming competitive gamers.
Blevins is one among many gaming superstars—and that elite group is about to get bigger. By 2020, Activate suggests that 70 million people will watch a single esports final, which is higher than the viewership for U.S. professional baseball, soccer, and hockey finals. By that time, consumers will watch 3 billion hours of esports, which accounts for 10 percent of all sports viewing.
Unlike football or cricket, esports is not rooted in any region or culture, so it has a more global appeal, Lee said. “In today’s world, being able to reach … billions of eyeballs is very important for building the product’s commercial value.”
Streamers and Viewers
Leading the pack in reaching those billions of viewers is Twitch, the Amazon-owned streaming service that calls itself “the world’s leading social video platform and community for gamers.” Whereas most video platforms, such as YouTube, focus on content creators uploading videos for people to watch, Twitch was built with live streaming in mind. Viewers can interact with the streamer in real time.
“Twitch has done a lot over the years to become so widely popular,” said Ali Moiz, CEO of Streamlabs, which operates a streaming application to help professional streamers on the platform. Moiz attributes Twitch’s annual conference, TwitchCon, with helping “bolster the popularity of the platform.” He also points to the immediacy of the platform as one of its greatest appeals.
“They’ve found a really unique way to facilitate real-time reactions between the audience and the creator,” he said. “No other platform has done this quite as well. It’s exciting for people to donate to their favorite Twitch streamer and hear them call you out live on stream in front of thousands of people. That kind of interaction is addicting.”
It’s big business for everyone involved. Moiz approximates the size of the streaming industry, which includes esports and other streams, at $10.1 billion in 2018 and predicts it’ll reach $13.1 billion in 2019. Streamers compete with one another for advertisers and subscribers, the latter of which fund their streams with donations and tips. Moiz’s estimates put it on par with Netflix, which reported over $11 billion in revenue in 2017 on its Q4 2017 earnings call.
Esports has been mentioned as a possible Olympic sport and was included as a demonstration event at the 2018 Asian Games, which previously “served as a door for judo and taekwondo to become Olympic sports,” said Lee.
“If you have e-games where it’s about killing somebody, this cannot be brought into line with our Olympic values,” Bach said.
Nevertheless, Lee said that even the discussion about including esports in global sports competitions means that “few now have doubts about the long-term staying power of esports in mainstream culture.”
While Lee sees esports as a competitive threat to traditional sports leagues, he also said esports could complement traditional sports. Last year, the NBA announced it would be the first professional sports league to form an esports partnership: the NBA 2K League with Take-Two Interactive Software, publisher of the NBA 2K series. The NBA 2K League will go into its second season with four more teams.
people around the world watching live and online
hours of esports watched globally
people around the world hours watched in the U.S. (10% of all U.S. sports viewing)
people will watch an esports final — more than the MLB, NHL, and NBA finals
“Realizing its potential as spectator sport, suddenly tradition, consistency, and history become as important as product innovation and new product launches,” Lee said.
What Comes Next
The future of the business of esports may involve emulating the structure of traditional sports. Lee anticipates that esports will develop governing bodies like FIFA or the NFL, leveraging “investors who are much savvier and more experienced with traditional sports franchise and media businesses.”
He said the viewing behaviors of esports fans, especially in data-rich environments such as streaming, can assist marketers in creating optimized advertising.