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Esports, Big Business or Child’s Play? An overview of the past and future of Esports as an industry

[dropcap]C[/dropcap]ompetitive video games?  That’s not a real sport, there’s no action, excitement, no physical competition, not much of anything, right?  This is how almost everyone not exposed to the competitive nature of video games would react.  The fact is Competitive gaming is big and here to stay.  Competitive video games more commonly referred to as E-sports are defined by the Oxford Dictionary is ”[A] multiplayer video game played competitively for spectators.”  The most popular of the games of Esports as written about on fourtune.com are League of Legends, Dota 2, Counter-Strike Global Offensive, Call of Duty, Halo 5, Rainbow Siege Six.  

The teams that participate in these games as well as the individuals that make up these teams have incredible talent at what they do and deserve to be placed on the world stage.  It takes a diverse collection of skills to compete at the top level, and every player on a team has a role to play.  To be able to compete and win the top events, teams have to have near flawless communication and teamwork capabilities.  They also have to have an understanding of a game that can only be achieved through years of dedication.  Team leaders have to have a creative yet logical mind in order to develop stratagems that propel their team to victory.

What Makes a Sport a Sport?

To discuss whether Esports is a sport or not we need to know the definition.  The dictionary definition from the Oxford Dictionary is “An activity involving physical exertion and skill in which an individual or team competes against another or others for entertainment.”  While Esports does not contain the same degree of physical exertion as many other sports, it still contains many other aspects of the definition.

There are Esports such as StarCraft 2 that are played individually as well as more team oriented Esports such as Counter Strike: Global Offensive.  These games are watched by others for their entertainment value, filling another piece of the definition.  However, even though Esports fits many parts of this, it’s critics argue that it doesn’t contain the physical exertion required, in their mind, to make it a sport.  While this is true that Esports does not require much physical exertion, it make up for that in the amount of mental stamina it requires.  Most, if not all, of Esport require a clear cut overarching strategy.

The Economics of Esports

Graph created by the author. Click here for original data

The business aspect of E-sports is booming, in 2017 alone Newzoo an E-sports market research publication says, ” Newzoo’s 2017 Global Esports Market Report shows that Esports revenues will reach $696 million.”  Newzoo also reports,”[Esports will] grow to $1.5 billion by 2020 as brand investment doubles.” Clearly, we’re talking about big money, but how is this money made?  E-sports tournament organizers create tournaments and invite the best in the world to play.  These top-tier players bring tons of viewers.  According to CNN, the video game League of Legends brought in 36 million viewers for the World Championship surpassing the NBA finals in viewership numbers.  This is extremely significant because the NBA finals are broadcast on ABC, which is a public broadcasting company.  On the other hand to watch the League of Legends match one must go to twitch.tv, a site that is difficult to reach if you don’t know about it.  Yet despite this obvious disadvantage to the E-sport it still managed to attain more viewers, and viewers mean money.

So how do the tournaments draw these top tier teams?  Prize pools, prize pools are a sum of money that is given to the teams.  The amount of money they receive depends on how they place in the event.  For example, the team that places first will receive more than the team that placed second, the team that places second will make more money than the team that placed third and so on.  Polygon.com reported, ”The winner of the 2017 International Dota 2 Championships, or TI7, is EU team Liquid, who in addition to the Aegis of Champions will also take home a $10.8 million prize.” Even the teams that placed 17th and 18th in the event still took home a respectable 60,000 USD.  This is big money, however, most of this money goes to the investors and other equity holders.  Depending on their contracts some players may also receive bonuses for winning events.  

[perfectpullquote align=”right” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Esports revenues will reach $696 million.-Newzoo[/perfectpullquote]

Players contracts also dictate how much they are paid.  Dextero.com tells us; ”[T]he top paid Counter-Strike team in the world currently are paid $17,000 per month, before any added prize money.”  That totals out to $204,000 per year without the bonuses they get for winning tournaments!  This is way less than the 696 million USD being made in revenue leaving tons of room for growth.  However, that is still only half of the lowest contracts in the MLB but still respectable.  

However, even though these players make 200K per year they are still not recognized for the hard work and dedication it takes to play at a professional level.  Business Insider reports that the players of Team Liquid play at least 50 hours per week, and two of the players, Chae “Piglet” Gwan-jin and Kim “Fenix” Jae-hun are said to practice 12-14 hours a day.  This amount of dedication hardly compares to even Olympians.  Who, according to insidethegames.biz, ”The average elite British athlete will have been training six hours a day, six days a week, 12 months a year.” 

This Olympic comparison might have larger implications as soon as 2024.  The Guardian reports that ”[E]Sports could be added to the Olympic programme as an official medal sport in 2024.”  This integration of Esports as a medal event in the Olympics would mark a turning point for the industry, causing viewership numbers to skyrocket due to the exposure.    

Life After E-sports

All the hours of hard work and dedication take a toll on the players.  The career length of many players as reported by polygon.com is ”3 to 5 years on average.”  However, a life after E-sports isn’t as bleak as it sounds, you can still make big money even if you’re not in the pro scene.  Mike “Shroud” Grzesiek, an ex-member of the competitive Counter-Strike Global Offensive team Cloud 9, is now adjusting to life after Esports.  Yet he still plays games regularly and makes money, a lot of money.  The Huffington Post estimates that shroud makes 8,000 USD per month from streaming himself playing video games on twitch.tv for others to watch.  That represents a 53% decrease in income compared to his previous salary playing for Cloud 9, but still very respectable.  

Coaching is another way to make money after E-sports.  According to fortune.com”An e-sport coach can make anywhere from $30,000 to $50,000 a year.”  That’s a far cry from what players could be making streaming, but it allows you to remain in the Esports scene for a little longer.  

If perhaps you no longer want to be affiliated with a team you can become a play by play caster or a desk analyst, both of which are referred to as casters.  As a caster, ex-pros can use their knowledge of the game to shed light on the things that are happening to the viewers.  Some of the ex-pro that have graced the stage include Nothing, Frieberg, and DazeD.  Xygaming.com reports casters can make up to a $1000 USD per day, and with some events spanning over a week, casters could stand to make $7000 USD.  However, because there can be large breaks between events it can occasionally be difficult to find reliable work.  

Casters are usually hired as a one-off deal and are not guaranteed to be hired again.  Even though some of these post-E-sports careers have different benefits and salaries one thing they have in common is, they still all make more than ex-pros that come from mainstream sports. A 2009 Sports Illustrated issue reports, ”By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce.”  This differs greatly from Esports where most retirees are still making good money.

E-sports as a Sport

[perfectpullquote align=”right” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]The video game League of Legends brought in 36 million viewers for the World Championship.-CNN[/perfectpullquote]

Esport competitors spend long hours dedicated to their craft and working hard to become the best in the world.  This dedication rivals that of Olympians.  That dedication produces immensely skillful players.  This combination of skill and dedication deserves to be shown to the world.  Not everyone is treating Esports as a children’s hobby.  The Entertainment and Sports Programming Network (ESPN) broadcast a Dota 2 tournament on ESPN 2.  This is reasonable as when ABC broadcast a different esport they had 36 million viewers.  However, despite this, ESPN received a lot of backlash for the broadcast, from sports purists.  However, this still shows movement in the right direction for Esports even if it still isn’t completely accepted.  

Gabriel.gagne CC-SA-BY-4.0, https://commons.wikimedia.org/wiki/File:League-of-legends-esports_929.0.jpg

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What do you think?

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3 Comments:

  • Anonymous

    March 19, 2018 / at 10:53 amsvgReply

    Typically, sports get participants into better shape. I can’t imagine that playing 12-14 hours of video games daily is very healthy.

  • Rachel

    March 16, 2018 / at 11:06 amsvgReply

    If you consider Esports a sport, then why isn’t theatre, speech, band, or even math team a sport? If you take away the physical aspect of the definition it opens the term “sport”, then it applies to virtually every activity involving a competition. That’s why I will continue to classify esports as a hobby/ activity rather than a sport.

  • StudentBlogger

    March 16, 2018 / at 10:51 amsvgReply

    While I liked this blog, I would have to disagree that esports players work as hard as olympians. I don’t man to say esports don’t require hard work and dedication. I’m sure they do. But the life of an olympian is insane. Esports players don’t have to worry about what they’re eating. There’s no real physical activities. Thanks for sharing this with us. I didn’t know much about esports before this.

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    Esports, Big Business or Child’s Play? An overview of the past and future of Esports as an industry