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Influx of capital into eSports will force it to grow up

Traditional sports owners and executives getting into eSports will herald huge changes to the culture and business of the sector

It's almost certainly coincidence that the acquisition of eSports franchise Team Liquid by a consortium of traditional sports businesspeople came only a day after rival franchises Team Apex and Team Dignitas were bought by the Philadelphia 76ers, a major US basketball team. It's a hell of a coincidence, though; one that underlines the fact that eSports, after countless false starts and hyperbolic predictions, is now facing a genuine gold rush of investment. These two new deals are significant, but the ball was already rolling thanks to high-profile involvement in the sector from European sports teams including Germany's Wolfsburg and the UK's West Ham.

These acquisitions will not be the last; if anything, they will open up the floodgates. Traditional sports firms have been circling eSports for some time, but until this year, had largely held off anything other than tentative involvement. The reasons for their reticence have changed over time. A decade ago, traditional sports companies and investors were entirely unconvinced by the potential scale and mass-market appeal of eSports. That attitude was overturned for the most part by the enormous success of game streaming through sites like Twitch, whose growth demonstrated the enormous size of the potential audience while also exposing problems with professionalism and community management that have stayed the hands of many sports investors in recent years.

"eSports has improved in many regards over the years but still has a rather unwelcoming "boys' treehouse" vibe and can be extremely prejudiced and unpleasant towards women, minorities and newcomers"

That a wave of investment has commenced is a testament to two things; firstly, the sports business feels that it can no longer ignore the growth of eSports. The risk of a major new sports sector growing up without existing sports firms having a hand in it has come to outweigh the investment risks. The moves made by the 76ers and aXiomatic (the conglomerate representing traditional sports businesses in the Team Liquid deal) are reflective of a fear of being excluded from the growth of a major new sector, not so much of a genuine confidence in the financial outcome of their investment. The second thing these investments imply is that the sports business has overcome its concerns about professionalism, or even corruption, within eSports. That doesn't mean they're not concerned any more - they almost certainly are - but they've likely assured themselves that their involvement can "clean house" to an effective degree.

As other investors move into the space - nobody is going to want to risk being left behind while their competitors reap the benefits of a growing market - "cleaning house" is likely to become a major trend. Instances of player mistreatment or corruption that would reflect badly on investors (many of whom are tied to extremely valuable sports brands) will not be tolerated, but it will go beyond that; the influx of capital into eSports will force it to grow up. These investors not only want to avoid outright brand damage from corruption and unprofessionalism, they also want to see their investments grow into big, popular franchises with mass-market appeal. This will, of necessity, mean sweeping changes to how eSports leagues, franchises and players present themselves and their sports.

In part, that's going to demand cultural change; eSports has improved in many regards over the years but still has a rather unwelcoming "boys' treehouse" vibe and can be extremely prejudiced and unpleasant towards women, minorities and newcomers. That will change, from the top down; investors can't police the language and attitudes of the eSports audience but they absolutely can and will dictate codes of acceptable conduct for the players, executives, organisers, commentators and on-screen personalities in their employ. Perhaps even more pressing, though, is the cultural question of accessibility. You can't make eSports mass-market if it's impenetrable to everyone who tries to dip into it, much less if newcomers who try out the games are greeted with choruses of swearing, aggression and being told constantly to "git gud". That side of things is more the domain of the game developers and operators than the leagues and franchises, but the pressure to improve the new player experience of eSports games and communities will be immense if and when investors sense that this is holding back the sector.

What's arguably more interesting to consider in terms of the growth of eSports in the wake of widespread investment is the other challenges to attaining mass-market appeal. The presentation of the games themselves is an issue - tuning in to an eSports match can be like picking up a broadcast from an alien race. What you see onscreen is often nigh-on impossible to decipher, even if you know the game being played, a consequence of the fact that streaming games generally relies on using the same viewpoints and data displays that players get, which is a bit like watching a motor race or a football match entirely in first-person perspective. This is a problem that needs a technological fix; eSports games need to be more interesting, more intuitive and more entertaining to watch, which likely means making the viewer experience quite different to the player experience, as is the case in traditional sports of all types.

"Their true test will come when they have to try to tailor their output, and the entire public-facing nature of eSports games themselves, to a broader audience - to capture potential viewers, rather than just satisfying existing ones"

The other side of that particular coin is in the non-technical aspects of presentation; the commentators and on-screen personalities who are responsible for making the games comprehensible, welcoming and interesting. At the moment, few of them are actually doing that; which is not to say that they are incapable of it, but rather that they cater to the audience they've already got, which is resolutely hardcore and more than comfortable with endless jargon and in-jokes. Their true test will come when they have to try to tailor their output, and the entire public-facing nature of eSports games themselves, to a broader audience - to capture potential viewers, rather than just satisfying existing ones.

These are big challenges, but they're not unique ones. Every sport that has gone from obscurity to popularity has gone through a similar process, and some of the investors in eSports are among the most experienced people in the world at chaperoning that process. There will be upset and annoyance among some existing fans to the changes being made, but the end result will be an eSports scene that's more professional, more accessible and, hopefully, far far more popular. Nobody expects eSports to displace existing professional sports, but it absolutely has the potential to become a thriving, profitable and very popular subculture all of its own, assuming it can break out of the niche it has already carved for itself.

There will be stumbles along the way; in a gold rush, people always trip and fall. The next few years will likely see almost every credible franchise and league in eSports receiving approaches from potential investors; not all of those will pan out, and not all of the ones that do pan out will end in happy marriages. One wildcard in all of this is actually the developers themselves, who create the games that eSports depends upon but who have an at times fractious relationship with the leagues and franchises that sprout from their creations. Some developers take little control of their games' eSports scenes, while others - Riot Games being a good example - exert significant control, and potential conflicts between that and the ambitions of major investors are one likely source of friction in the coming years.

The question for developers, really, is what they think eSports is for. For the most part, until recently, developers have seen it as a kind of marketing venture; high profile within certain circles, capable of generating good word of mouth and long-tail sales of a game, but not popular or profitable enough to be a serious business in its own right. Now, with the arrival of professional investors from the world of traditional sports franchises, that assumption has to be questioned. If eSports turns out to be lucrative enough to justify the attention of the mainstream sports business, then it will only be natural for the developers who create the games to want a slice of the pie in terms of broadcast or sponsorship revenues.

How all of this shakes out will be fascinating to watch. After over-promising and under-delivering for many years, the wheels have started to turn very rapidly for the eSports sector. There will be changes to be made and battles to be fought over the future of the sector, but if eSports is ever truly to make the big time, the time is now.

Latest comments (1)

Mark Reed Chairman, Heaven Media LtdA year ago
Good article for the most part. Only point I would raise was around the statement "The question for developers, really, is what they think eSports is for. For the most part, until recently, developers have seen it as a kind of marketing venture".
Three of the largest developers in the world have put eSports first for a decade, Valve, Riot and Blizzard. What Rob means is that the old school Publishers who did not pay enough attention to what Gamers wanted now need to give it the focus it deserves.
The reality is eSports has had a gradual growth over the past 10 years, there has been no real spike. It has taken traditional wrapped boxed product sales to heavily decline and Billions of dollars being made by eSports focused games developers to change a mindset. For example Activision could have had a substantial size of this market, if they had not turned their back on eSports following the move from dedicated servers post COD4. Now COD has zero chance of gaining ground on Counter Strike. Just look into a game few people have even heard of called Crossfire, this FPS game generates $1bn of in-game revenue per year.
Anyone wanting More information about marketing into eSports please contact the Heaven Media team and visit www.heavenmedia.com.
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