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2018 - The Watershed Moment for Esports

By Aaron Callaghan 

 Follow the money! Investment dollars for esports is gaining momentum and subsequently esports as an industry is transitioning from an interesting experiment, a sideshow, a inquisitive thought – “You’re investing in what? Video Games?” – To a freight train headed toward mainstream acceptance and mainstream dollars. Sporting title esports, such as FIFA and NBA 2K are still lagging traditional esports titles such as League of Legends, DotA and Counter Strike.

Digital Pulse PwC published a report in mid-2017, interestingly the report found that esports revenue (not including merchandise) is set to hit 874 million up from 42 million in 2012 (1). This growth is significant, and it appears the people that matter are starting to take notice. Moving forward no longer will esports be confined to niche markets and viewers the riches of mainstream viewership is looming large.

Blizzard’s much hyped Over Watch League (OWL) recently debuted after reports suggested a 90 million US dollar deal was struck between OWL and Twitch for exclusive streaming rights (2) to all league matches, the synergy of Blizzard and Twitch’s relationship is evident in the viewers and players ability to earn in game rewards by tuning into the broadcast. The initial weekend slate of games was a resounding success viewership wise with a peak of 437 000 concurrent viewers during the Seoul vs Dallas match up (3).

That brings us to the year 2018 with several major players set to begin esports league play throughout the year.

-          The much anticipated NBA 2K League

-          eMLS on the FIFA football platform

-          Australian A-League football have for the e-League for FIFA

-          GFinity Australian esports league for CS:GO, Street Fighter and Rocket League

-          Adding to the Pile on of esports investment the NFL recently advertised for a league office level esports expert on their team.

With so many leagues establishing themselves in 2018 the intriguing dance will be where the broadcast deals come from with Twitch being the convenient partner, for these leagues it is convenient that Twitch has Amazon money (4) and should be interested in shelling out for world class content. Esports as an on-screen spectacle, especially on Twitch’s platform, is favourable to advertisers, a measurable hyper – targeted audience with excellent on-screen marketing capabilities.  

EA Sports FIFA football in conjunction with the respective Professional Football Leagues around the world are ramping up their esports efforts announcing two partnerships in the last 3 weeks with Australia’s A-League professional league announcing a nine week league and a tournament style finals play whilst details are scarce the league has announced each professional club will employ two FIFA players to compete in their club colours and FIFA players will have the opportunity to be drafted into the league (5). North America’s Major League Soccer have announced their own eMLS league (6) to compete as a part of the 2018 EA Sports FIFA world league. EA Sports FIFA is a great on-screen product and easy for the lay-person to understand even the finer nuance of the video game positioning itself for crossover appeal between esports fan and sports fan.

The NBA in partnership with 2K Games and parent company Take Two Interactive have spawned the ‘NBA 2K League’ where 17 of the 30 NBA franchises are competing in league style play, players will live and practice in shared housing, players will compete online for a spot in the player draft and be offered competitive salaries. The NBA 2K League called for a minimum investment of 750K USD for the first three years of the league’s existence (7). All leagues, investors and esports professionals should be watching the 2K League with interest as the NBA has taken a top down approach to building an esports league, rather than having the community build up the league from the bottom. The NBA have adopted a – build it and they will come approach – with the 2K League. When looking at the Twitch viewership numbers NBA 2K routinely ranks on the lower end of concurrent viewers. The secret to the NBA 2K League success will come from leveraging on the NBA proper’s brand appeal and marketing prowess, with the NBA’s popularity and revenue being at all-time high, there’s no reason the 2K League can’t capture those crossover fans who have a casual interest in esports. All of the 2K League’s teams are named after their respective NBA franchises and that ensures each team is instantly recognisable with fans.

Now if only a developer could make a competent rugby union game or an engaging cricket title.

Part of the allure of esports is being able to engage with the on-screen product, viewers can not only play the games they watch, some games allow viewers to collect rewards in game, viewers can interact in the chat box whilst the stream is taking place, viewers can donate money to their favourite streamers in return for a shout out increasing that connection the viewer feels to the content or streamer.

The outlook is bright for esports, when we retrospectively look back at the footings of esports, 2018 could be tipping point where it all started to gain serious momentum. Esports sponsorship revenue in the USA, in 2016 is an estimated 44 million and set to double by 2021 (8).

On a hunch look to the NFL and EA Sports Madden for the next foray into esports followed by the Formula 1 motorsports.