eSports' Potential for More Professional Gaming Leagues
As the market for Professional gaming continues to rise. There is money to be made in Professional Gaming leagues.
I love video games. I have been playing them since I was very little. I played sports games, shooting games, RPG’s, online multiplayer, and a lot of other consoles based games. I also loved sports from a young age. All different kinds, if I could run around and chase a ball I would think it was fun. That is why Electronic Arts makes my favorite video games. Fifa, NHL, Madden, and UFC, are some of the games I played growing up that took up most of my time. I played them for hours on end taking advantage of the numerous different game modes and competing online with and against friends.
Electronic Arts reported fiscal 2018 fourth-quarter financial results on May 8. The digital entertainment giant is profiting handsomely from the surging growth of esports, which is boosting sales of its video games.
In fact, FIFA has its own eWorld Cup, where the 32 best FIFA18 Xbox and PlayStation players compete for the title of FIFA eWorld Cup Champion. NHL and Madden also have similar world championship tournaments.
Professional competitive gaming is becoming as popular as professional sports. It will soon be a 1 billion dollar business with a global audience of over 300 million fans. But it doesn’t involve a ball, stadiums or grass pitches. Welcome to the world of eSports. In a nutshell, competitors play video games, while being watched by a live audience. Millions more watch the games online.
Fans watch on YouTube’s gaming channel or on Twitch, a dedicated gaming channel on the web. eSports viewers spent 17.9 million hours watching their gaming heroes on those channels in the first quarter of 2018. The most popular game to watch is Dota 2, followed by League of Legends and Counter-Strike: Global Offensive.
Alex Grey, Journalist for The World Economic Forum, reported that the global eSports audience will reach 380 million this year, made up of 165 million dedicated fans and 215 million occasional viewers. According to Forbes, in 2018, the eSports industry is projected to generate $905 million in revenue, reaching over $1 billion over the next two years. China and North America will generate over half of that sum. Fans buying tickets and merchandise will contribute $96 million.
Meanwhile, the inaugural season of the Overwatch League continues to impress. In its four-quarter financial results earlier this month, Activision Blizzard said streams pulled in more than 10 million unique viewers and held an average audience of more than 280,000 on a per minute basis. With 12 teams and sponsorships like T-Moblie and Toyota, the new league should be a factor in driving global esports revenues and engagement.
Another trend stemming from Overwatch is the push for local interest in esports. Mirroring traditional North American sports organizations like the NFL and NBA, the Overwatch league assigns its teams a home city, like the Philadelphia Fusion and Los Angeles Valiant. Overwatch hoped to build local interest by holding matches in each city during their first season. The region’s audience may only make up 14% of esports enthusiasts, but it will generate 38% of the projected $906 million 2018 revenue
That specific stat is very favorable to esports newest league for the basketball video game series made by 2k Sports. The NBA 2k league has a similar local team structure for their esports league. But has faced a good amount of skepticism.
Critics wonder whether fans will want to follow an esport when a real-world version of the game already exists. Patrick Seitz from Investors Business Daily interviewed Brendan Donohue, NBA 2K League managing director. During the interview, Donohue speaks on a number of business advantages the 2k league has. “Compared to other esports games, we are rated E, so partners feel comfortable putting their brand next to the NBA 2K brand,” he said. Games rated E for “everyone” by the Entertainment Software Rating Board are suitable for players of all ages. NBA 2K League partners include Intel, Dell’s Alienware division, State Farm, Jordan Brand at Nike New Era Cap, HyperX and Scuf Gaming.
“Also, the rules of basketball are understood worldwide, so the esport version is easy to follow,” Donohue said.
“With a lot of traditional esports, if you don’t play that game, it can be pretty intimidating in terms of actually understanding what’s going on,” Donohue said. “We’re lucky that our game is globally recognizable.”
This leads me to my main point. With all of the hype around esports, all of the potential to make money from local esport enthusiasts, and all of the success that Overwatch and 2k leagues have had early on, why hasn’t EA sports invested their time and money into funding and creating professional FIFA, Madden, or NHL teams?
For the first quarter of 2018, EA expected net bookings of approximately $720 billion and net revenue of $1.08 billion.
“In the year ahead, we will expand the world of play with amazing new experiences and new IP, more competition, and industry-leading subscription programs,” Wilson said. For Joe Tenebruso‘s May 11’s Motley Fool article on their fourth-quarter financial results on May 8. “There has never been a more exciting time to be engaging and entertaining global communities.”
EA is one of the most consistent video game production companies and has had a great run of longevity in the industry. It has done well thus far in trying to tap into the newfound revenue in esports by hosting tournaments to crown the best individuals in their games. But they are missing out on an opportunity to expand their reach.
An eSports league for Fifa, NHL, and Madden are all more than possible. These leagues would bring in additional revenue for EA in the form of sponsorships, media rights, advertising, team merchandise, ticket sales, and even publisher fees. They, like the NBA 2k league, have games can be globally recognizable and appeal to all age groups and demographics because of the game’s E ratings. And these games like Overwatch and 2k could take advantage of local interests in esports. There is a pleather of soccer and hockey teams in North America and around the world. So, the possibility for a profitable esports league is more than fishable.
I am not going to say that I have all the answers about how these leagues should start up and operate. But, I think it is important to point out the fact that there are no sports games currently in the eSports top ten in popularity.
Some may argue that there simply is not enough interest in these games to sustain their leagues. That these games cannot start up professional leagues without an overwhelming amount of fan interest and viewership that would be consistent and revenue building. And maybe it’s a stretch for me to think that EA could make all three of these eSports leagues in the recent future and have success in all three. But at the same time optimism in the video game community is at an all-time high. People love video games and what we know now is that people also love watching their favorite video games being played.
I can see it now the eMLS inaugural draft. Bright lights, Young men waiting to get drafted by different esports soccer teams in hopes of competing on the viral pitch for glory.
The idea may be crazy. Who the hell would have thought you could be a professional esports athlete? Not a lot of people. But with a new generation of consumers coming to the forefront of the entertainment industry, it is esports, social media, and the new fresh technology that is on the verge gaining major capital in the global marketplace. In order for video game companies like EA to keep up in the fast-paced video game industry, they must try and reach as many potential gamers as possible. They must develop some sort of fully human organized league for one of their top selling sports games. Not because it will spark interest in their games; they already have that. But because it will boost their revenue by forcing those who love playing their video game to also pay attention when they are not playing by rooting for and spending money on their local esports team.
