The Esports Gold Rush – What Do ‘Traditional Sports’ Need to Consider?
29 November 2019
Everybody wants a piece of the esports pie, and the International Cycling Union (ICU) is the latest to make its move. The world governing body of cycling has teamed up with Zwift - the innovative online platform which allows riders to compete against each other in a virtual world - to host the world’s very first ‘cycling esport world championships’ in 2020.
This follows the launch of the Kiss Super League earlier this year - the first esports league to feature professional cyclists cranking some seriously hard wattage on static turbo trainers, all hosted exclusively on the Zwift platform.
But why take the exhilaration of real-life cycling and move it onto static bikes, with the action taking place on-screen? I mean, why ‘esports’ at all?
Well to add some context, esports (i.e. competitive video gaming) is now widely tipped to become the next billion-dollar industry. It is estimated that over six billion hours were dedicated to watching professional gaming online in 2018 with a global audience of over 450 million, and PWC now estimates esports has a higher growth potential than the NFL. Prize pots for pro gamers are staggering, stadiums are selling out to watch live events, and major sports brands are offering lucrative sponsorship deals to kit-out professional esports teams. The ecosystem is taking shape - with game publishers, professional teams, leagues, broadcasters, agencies and even betting sites now supporting an increasingly legitimate esports landscape. Like it or not, esports is now a mainstream form of both sport and entertainment. It’s here to stay…and “traditional sports” want in.
Cycling might be the first to combine e-sports with the true physicality required for the ‘real sport’, but it is by no means the first “traditional sport” to dip its toe into the e-waters (and it won’t be the last). The NBA’s partnership with Take-Two Interactive saw the creation of the immensely successful NBA 2K League in 2017, which now hails all 21 NBA teams competing in the basketball video game competition. Similarly, in football, all 20 Premier League clubs have submitted professional esports teams to compete in this season’s 2019/20 ePremier League, played out on EA’s FIFA 20 title (with equivalent domestic tournaments existing in Spain, Germany and the US). In the last 12 months alone we’ve also seen breakaways by individual athletes, with the likes of Mesut Ozil, Berndt Leno and Ronaldinho announcing the creation of their own esports teams. Even marauding Leicester City left-back, Christian Fuchs, has an esports academy (No Fuchs Given) seeking to unearth “the next generation of e-Football stars”.
It is well known that the English Cricket Board (ECB) and World Rugby are considering their esports approach carefully. Both organisations have recently tendered feasibility studies into what exactly their esports strategy should encompass – not being able to benefit from leading video game titles for their respective sports in today’s market (R.I.P Jonah Lomu Rugby and Brian Lara Cricket).
Motor racing on the other hand is already well established in this space, with pro teams being able to compete across a wide range of titles such as F1 2019 (the official F1 videogame developed by Codemasters), Gran Turismo and Forza. Team Redline, arguably the world’s leading ‘sim-racing’ team, boasts real-world F1 drivers Max Verstappen and Lando Norris as part of their player roster; there being a natural cross-over in the skills required for driving both a real and ‘sim’ car. This differs from other traditional/esports cross-overs – for example, whilst there have been successful PR initiatives giving fans a chance to watch pro stars play the virtual game, we are yet to see a pro footballer become a pro-FIFA player.
Tennis’ involvement in esports to date has been to run an official Tennis World Tour (a game published by Bigben Interactive) competition at Roland Garros in parallel with the French Open (the Roland Garros eSeries). In athletics meanwhile, whilst esports will be included as a demonstration event at the Asian Games for the first time this year, the President of the International Olympic Committee has deemed esports “too violent” to be part of the Olympics for now – a slight irony when considering the Olympics plays host to boxing, taekwondo, archery and shooting.
Undoubtedly, the existence of mega-successful, fully-licensed video game titles running in parallel for basketball and football (NBA2k and FIFA) offered those sports a seamless, direct route into esports. But what is perhaps most intriguing is that some professional sports teams are now becoming involved in entirely unrelated, ‘non-sporting’ titles. Looking at a snapshot of the esports market more broadly, the likes of League of Legends, Fortnite and Overwatch outstrip traditional sports titles in terms of viewing figures (these are the ‘digital native esports’). To this end, FC Schalke have purchased League of Legends team ‘Elements’, Celtic recently signed an esports team to compete in the Call of Duty World League Championship, and Vancouver Canucks of the NHL have a pro team competing in the Overwatch League – the ‘Vancouver Titans’.
And it makes sense – the fan base for traditional sports is an ageing demographic. There are an increasing number of young people today who are simply not engaging with traditional sport like generations before them. These youths are digitized and tech-savvy. They care not for Garth Crooks’ Team of the Week, Premier League Darts or five-day test cricket. Instead, they display an insatiable appetite for fast-paced, engaging and interactive content, which is easily accessible, streamable and affordable. Esports fits the bill.
In this sense, esports offers traditional sports teams a chance to reach a new audience. A chance to further a club’s brand and fanbase amongst a wholly new gaming demographic who might previously have been uninterested in the real-world sport. By adopting a holistic esports strategy (i.e. competing in multiple gaming titles), traditional clubs can position themselves more as an “overall esports brand” similar to that of FC Barcelona, which also has pro teams competing in basketball, handball and futsal. The wider the net a club can cast in the esports market, the higher the likelihood that it will be able to convert young gamers into new fans. It is for this precise reason we have seen major, long-term strategic partnerships announced in recent months – AS Roma have partnered with Fnatic (a big time London-based esports organisation) whilst Man City announced its partnership with FaZe (the most followed gaming organisation in the world with 214 million global fans and over 500 million monthly views of its content).
Having very similar commercial models, esports therefore represents a natural extension for many existing sports organisations. Most clubs have venues which are able to host esports tournaments (allowing the club to earn revenue from otherwise ‘dormant’ space), as well as staff who know how to sell tickets, sponsorship and broadcast rights.
Aside from increased revenues and fanbases, esports also offers traditional sports clubs and governing bodies somewhat of a blank slate; a canvas ripe for diversification and fairness when it comes to devising new formats. Esports is a competition environment where success is (mostly) determined by technical gaming skill over raw physical ability, meaning the perceived relevance of biological, gender or age difference falls away. In the world of esports, traditional sports have the opportunity to re-think their values and their structure, and perhaps provide parity in prize money for all.
Whilst traditional sports will continue to enter the e-game in various ways, they will no doubt be aware that there are still some key structural, legal and regulatory issues the esports industry is grappling with in its nascent era (which traditional sports have largely already addressed). These include:
- Lack of overall regulation – esports is currently a multi-million dollar industry without an official governing body or any coherent regulatory framework. Indeed, the online, global nature of esports makes overarching legislation difficult to put in place. The UK Gambling Commission has already published a discussion paper outlining the need to impose strict gambling regulations on esports at all levels, also highlighting the risks of using ‘cryptocurrencies’ as a means to place bets on competitions.
- Doping and Integrity – the risk of doping in esports is very much alive, with some pro gamers having admitted to taking concentration drugs such as Adderall during major competitions. ESL, one of the world’s largest and longest running esports tournament organisers, has successfully devised and implemented an anti-drug policy for esports, working in conjunction with World Anti-Doping Agency (WADA). The policy involves random drugs tests for gamers, much in the same way that conventional athletes in traditional sports are subjected to. This policy has not yet been adopted by all tournament organisers however.
Perhaps the closest thing esports has to an integrity body today is the Esports Integrity Coalition (ESIC). Formed in association with major esports organisations such as Electronic Sports League (ESL), ICSS (International Centre for Sport Security) and SIGA (Sport Integrity Global Alliance), its mission statement is: “to be the recognised guardian of the sporting integrity of esports and to take responsibility for disruption, prevention, investigation and prosecution of all forms of cheating, including, but not limited to, match manipulation and doping”.
- Intellectual property – unlike traditional sports (where the sport itself is not a protected IP asset), in esports the video game’s publisher or developer owns the IP rights to the underlying game and these rights are then licensed to the likes of broadcasters, platforms and leagues for a fee. Complex licensing agreements are therefore needed to balance the often competing interests of the publisher/developer (seeking to maximise licensing fees and retain a certain amount of control over their IP) and the relevant licensee. Rights to player names (real and in-game) and the avatars they create is also a matter that needs to be address in T&Cs for games and events. In traditional sports, players have influenced contractual terms relating to use of players’ name and image through collective bargaining. We anticipate that this will be a trend followed in esports.
- Esports player contracts – there is still no industry standard precedent for precisely what an esports player contract should look like. Esports athletes are often young and inexperienced, especially those entering the scene at the age of 15 or 16. How best should contracts be structured to ensure enforceability when there is such clear inequality of bargaining power between these young players and more sophisticated esports organisations? The question of capacity to contract also needs to be considered in relation to minors. Furthermore, do esports players enjoy contractor or employee status? A question for another day perhaps.
Artificial Intelligence: The New Driving Force Behind Sports Performance and Entertainment13 February 2019
If I was to raise the topic of “artificial intelligence” in football, you’d be forgiven for thinking I was referring to Joey Barton’s decision to enrol as a philosophy student at Roehampton University back in 2013. But not so – last month it was announced that London-based non-league club, Wingate & Finchley FC, have employed football’s very first ‘AI coach’.