WTF IS ESPORT?

Faker: 20 year old Lee Sang-hyeok, South Korean professional League of Legends player (and current LOL World Champion).  Image source: UniSci24.com

For the past couple of weeks Paul, one of our researchers, has been diving in to the quickly growing world of eSports. We chose Paul to tackle this subject because he’s an avid eSports fan and gamer.  Our first question for Paul to define was: WTF is eSport?  No, seriously, we needed a 101 of how to even begin to talk about this global phenomenon.

Here’s an overview of Paul’s version of a simple definition of what (tf) eSport is. We will be following this up in a few weeks with deeper insights into the eSports’ industry and audience.  In the meantime, if you really don’t know anything about eSports, this post is for you, covering the major games and some important facts and numbers. You can find our follow-up blog here if you don’t need the intro: LINK

 

ESPORTS: BY DEFINITION

Let’s start with a definition, a 2016 paper in the “Internet Research Journal” lays out the definition that eSports refers to “a form of sports where the primary aspects of the sport are facilitated by electronic systems”.  Eh?

What this really means is that eSports fit all the rules that other sports technically do, just via electronics-handling skills rather than multi-physical skills, per se.

While many corners of the internet still debate whether “eSports is actually a sport”, we’ll side step that conversation to use this definition as a useful starting point.  There are rules.  Lots of them.  Just like any other sport.

Perhaps the most common misconception regarding eSports is that it is one video game and exists as one big entity, when instead – like traditional sports – there are many games, each of which has its own leagues and teams that are followed by their own dedicated fan bases.

 

WHO’S GAME?

Of all the potential video games we could talk about here we’ve focused on three because these have (significantly) found the most popularity with players and fans as eSports. These are: –

  • League of Legends, aka ‘LOL’ or ‘League’
  • Dota 2
  • Counter-Strike: Global Offensive, aka CS, CSGO or just ‘Counter Strike’

 

LEAGUE OF LEGENDS

This is a five-a-side, 2 team MOBA game.  Backing up a minute here, five-a-side has nothing to do with football because MOBA stands for “Multi Online Battle Arena”.  In non-gamer speak this may mean ‘fantasy’ (please note Paul did not type the word ‘fantasy’ here, the blog editor did, Paul is disturbed by this).

The objective of ‘League’ is for a team to destroy their opponent’s base by casting spells and controlling the areas of play, while at the same time defending their own.  League of Legends’ teams compete in regional leagues which are run by Riot games, the development studio behind the game.

The main aim for all teams is to top their regionals’ leader boards to secure a place in the World Championships, one of the biggest eSports events of the year, which last year saw a staggering 14.3 million peak concurrent viewers during the tournament finals.

League of Legends World Championship Final 2016, SK Telecom T1 (SKT) vs. Samsung Galaxy (SSG)

DOTA 2

League of Legends and Dota 2 are very similar games in terms of their rules and aims. Dota follows the same 2 team, five-a-side format as League.  Both teams play a base guard and attack strategy with the objective being to defend and destroy.

The only real difference as far as the game is concerned is that Dota is a bit more complicated regarding actual game-play and options available to the player.

Dota’s in-built design game mechanics are more complex than League giving players more (purchased) items at their disposal to compete.

2015’s Dota International tournament held in Seattle’s KeyArena

 

COUNTER-STRIKE: GLOBAL OFFENSIVE

Counter Strike differs from League and Dota in that it is a first-person shooting game where teams (of 5) take turns at being Counter-Terrorists (base defenders) and Terrorists (base destroyers).

Teams compete to win the best of 30 rounds by planting a bomb on the opponent’s bombsite and defending until it explodes, or by eliminating the other team before the timer runs out.

CS’s official events tend to change from year to year.  This is partly because it’s a ‘newer’ game than League and Dota. Valve and Riot, the respective Dota and League event owners and organisers, were able to quickly establish and grow their global live fixtures.  CS’s live territory is still being fought for.

In the present however, there are 3 live ‘majors’ for Counter Strike. These see the top ranked teams play off against each other over a weekend for increasingly hefty prize pools.

The most recent of these was the “ELeague Major” in Ohio.  With a total estimated 4.6 million peak concurrent viewers across YouTube, Twitch and Turner global television, of which Twitch made up the largest share of views.  (Ask yourself quickly – have you even heard of or do you even know about Twitch?)

Team ‘Virtus.Pro’ player ‘NEO’ watching his teammate during a 2015 competition

TEAM TALK

In eSports one company or ‘Organisation’ (Org) hires a team under their banner and team name and there are no restrictions on owning teams over different eSports.

For example, the Org ‘SK Telecom T1’ has one team competing in League of Legends, whereas the Org ‘Cloud9’ has teams in seven different eSports including Counter-Strike, League of Legends and Dota 2.

What is standard however is that pro gamers do not play for more than one game at a time.  When signed for a team they compete only within that game and league.

When not competing, teams train. Some teams live and train together in ‘gaming houses’ which can be intense living situations. The articles linked here provide a fascinating glimpse into the extreme levels of burn-out-inducing player commitment and focus.

Currently however the trend is for pro teams to adopt training practices similar to more traditional sports where e.g. practice sessions (referred to as ‘scrims’) are held in dedicated and purpose built professional locations.

Danish Counter-Strike team ‘North’, who are owned by F.C. Copenhagen, practise in the stadium ground’s ‘Scrims’ room.

 

INDUSTRY SIZE

If you’re reading this it’s fair to assume that up to this point the extent of your understanding may sound like this: “Yeah, I’ve heard the term ‘eSports’, it’s big right? A multi-million dollar industry?”

The most commonly shared stat about eSports is based on information from 2015 by Newzoo, a company geared up in video game analytics. They have estimated that eSports’ based revenue hit $195 million a year ($465m overall market value) as of 2017 and predicted this number to double by this time next year.

Another report by SuperData in 2016 confirmed these rapid growth predictions, putting the overall market value at around $800 million. Both estimate that eSports will hit $1 billion by 2019.

So, it’s big and it’s experiencing accelerated growth linked directly to an increasingly mainstream global focus and profile.  Not bad for an industry that until recently had only existed in Asia since the early 2000s.

Yet big-sounding statistics can only say so much.  DI wanted to look more closely at the factors driving this industry growth, such as player earnings, organisation/team contracts, viewer figures, live event and sponsorship revenues and in-game purchase revenue. Today we’ll take a quick look at earnings and viewers because without recognised contenders and engaged audiences no sport can achieve these levels of mainstream crossover and industry forecast projections.

 

PLAYER PAY PACKS

What about the players? Running estimates of player earnings list 29 players from Dota 2 that are earning above $1 million(USD), 4 of whom each earned in excess of $2 million.

These numbers represent tournament winnings alone; they don’t account for sponsorship income and earnings from team contracts.

All the same it provides us with a reliable value for players based on event winnings. If we had to pinpoint one big name in eSports, a player who seems to be unanimously known as the best, it would have to be Lee Sang-hyeok, also more famously known via his on-screen moniker as ‘Faker’.

Recent reports estimate that Faker’s 2017 contract with SK Telecom T1 is more valuable than that of the average NFL player, at around $2.5 million. While the exact value has not been confirmed; it is an approximation of various factors, including previous earnings and the likely value of the commonly accepted status of ‘best (team) player’.

So what does this mean for businesses interested in engaging with eSports? To us these facts exhibit the ongoing establishment and development of an extremely stable and growing industry with Organisations (teams) and players demonstrating a strong commitment to eSports as a long term viable investment and career option.

 

DEMOCRATISED DEMAND

What F1 fan can lay claim to having driven an F1 car?  ESport, like for example football, has a beautifully democratised format in that young fans can pick up the tools necessary to play and have a real chance of (dreaming of or) becoming a Pro Player.

To understand a bit more about the types of audiences talking about and engaging with eSports we powered up the Brandwatch analytics platform.  Our query tracked global mentions of the most popular eSports over the month of January on Twitter and returned over 171,000 mentions in Counter-Strike, Dota 2 and League of Legends alone! In framing these figures it’s important to note that we designed our query to draw mentions that were only relevant to these games in the context of eSports, rather than to those playing individually (at home, non professionally).

 

FEMALE & TRADITIONAL SPORT FAN OPPORTUNITIES

Somewhat unsurprisingly we found that this world is male dominated, with a vast female engagement gap – something we at DI would view as an exceptional opportunity for brand and rights owners.

Regarding interests, there is close to an even split of users interested in traditional sports and games, with sports just edging out on top.  This shows some promise that sports fans may be some of the next adopters of eSports. This is likely to be the next audience demographic that investors will seek to pick up.

 

 

So females and traditional sport fans represent huge latent audience gains for this rapidly growing industry. Something that F.C. Copenhagen have already recognised and invested in via their Counter Strike team ‘North’ partnership.

Further evidence of the impact of fusing existing traditional sport infrastructures and audiences with the eSport industry was demonstrated through our Trending Topic analysis of audience conversation.  The highest ranking (most frequently talked about) subject presenting in our data set was “Astralis” at over 4,600 individual mentions in January.

“Astralis” refers to a Counter-Strike Team based in Denmark, who are widely considered amongst the top teams in the world. This topic and Astralis is where we will pick up our next blog, exploring audiences in eSports further.

In the mean, we hope that this brief introduction to the world of eSports has proven interesting and illuminating.  For more updates on our upcoming posts follow us on Twitter @DI_insights and thank you for reading.

This research is powered by Brandwatch.

© Disruptive Insight 2015.