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Arts & Culture

Why E-Sports Will Be Bigger Than Live Sports

(Source: Unsplash)

You probably don’t understand e-sports the way you think you do. Your immediate intuition is probably to make the analogy to live sports presented in a digital gaming format. But it’s much more than that. In fact, e-sports is a bit of a misnomer. The crux of e-sports is experiencing competition itself, no matter the genre.

What makes this trend so powerful is its ability to address the three major disruptions that legacy media face. Broadband proliferation and the smartphone made content accessible to anyone with an internet connection. Live content is now virtually irrelevant, as we live in an on-demand world. (If you miss something, no problem–you can just stream it later.) And finally, sports trends are moving in the wrong direction.

From the perspective of someone born before 1985, watching a younger person play a video game might seem bizarre. And even more bizarre might be someone just sitting watching other people play digital games. However, the profound changes in content consumption patterns cannot be understated. What the viewership numbers suggest is that e-sports fans don’t care much care who’s competing against whom, but instead just that they are competing. If you can package it on-demand and in truncated formats, it’s all the more attractive. YouTube already has more than 200 million people watching gaming everyday (yes, watching video games!), while searches for sports highlights are climbing at an 80% clip instead of the real live game itself.

Have you heard of Ninja or Drini? Your kids likely have. Believe it or not, these famous e-gamers are bona-fide celebrities. The former was listed as one of the world’s most influential people in Time Magazine, and the latter took top prize at the record-setting Madden NFL 19 Bowl. The takeaway― e-sports is a wildly popular phenomenon that shows how younger generations’ media consumption patterns have irreversibly changed. And if you need proof that e-sports isn’t sport-specific, the highest earning gamers played Dota 2, a multiplayer battle arena where teams of strangers try to out-strategize each other in real-time.

Ninja, one of the world’s most popular e-gamers.

The whole point of watching a sport live is to see the unexpected and participate in the emotional highs and lows that can only be produced by competition. Now you can get a similar experience anytime with a vast range of content choices, accessible anywhere, and on your own schedule. This stacks up to a trifecta of negative trends–aging demographics, falling youth sports participation, and declining attendance at games. (Attendance at Major League Baseball games dropped about 10% between 2017 and 2018.)

Since the advent of the smartphone and the beginning of broadband proliferation back in 2006, the average viewer age for big four traditional sports leagues–the NFL, MLB, NBA, and NHL–has increased 10% to 49. Contrast that with e-sports, where 80% of viewers are under 35. The number of people watching e-sports content is set to balloon to over 450 million this year, according to Newzoo. If the Super Bowl is the gold standard of live sports viewership, then League of Legends is giving it a run for its money, sitting basically on par with the NFL’s flagship event with over 100 million viewers.

This change is being painfully felt by legacy media. As we pointed out in our recent article, Get Ready for the Decline of Live Sports, people’s screen time has maxed out. Now it’s a brutal competition for a finite amount of viewer attention. Despite their deep wallets and stranglehold on what’s left of cable bundles, the likes of ESPN/ABC (Disney), Fox, CBS, NBC (Comcast), and Turner have to forcefully react. Granted, there are promising efforts by Turner, ABC, and ESPN to push e-sports into the mainstream by putting it on traditional TV. But these moves are not forceful enough.

E-sports games are universally accessible with an internet connection. If there’s one thing the internet did, it helped level the playing field across socioeconomic disparities for activities like playing e-sports. You can compete regardless of your resources so long as you are connected. You don’t need unique equipment, special fields, or other local players. Just go online and you’ll find plenty of fellow players, day or night.

From the perspective of growing e-sports leagues, this makes the fanbase easy to expand. While e-sports carries lower margins (there are no exclusive rights and advertising revenue is drastically lower than traditional sports), the hope is that its greater reach will more than compensate over time. Meanwhile, the sports media networks shell out billions annually for exclusive rights to traditional sports, in order to deliberately control and limit distribution.

E-sports, on the other hand, is global by default. This not only benefits its promoters, but also creates the opportunity to build larger audiences than any individual league could muster. The NFL’s popularity, by contrast, is mostly limited to the domestic U.S. market.

The losers in this saga are easy to identify, while the winners are harder to pick. So far most of the aforementioned legacy sports media companies appear to be largely unruffled by this trend. However, some do get it, like Formula 1 and Liberty Media. Investing heavily in new media formats, Formula 1 is not only setting record viewership with its e-sports series, but is also bucking the aging trend in its demographics on television.

Companies like Tencent, Activision, and Electronic Arts are primed to benefit, though it remains to be seen if they can take full advantage of the opportunity. Robert Kraft, owner of the NFL’s most successful team, the Patriots, also appears aware of the trends. He recently invested $20 million for a e-sports team in Boston. Microsoft and Google (and to a certain extent Apple) also serve as ancillary winners and clearly understand the trends. All of them are strongly accelerating their investments in gaming infrastructure and platforms. Don’t be surprised if your kids’ favorite team is an e-sports one. Maybe yours will be, too.

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