In arenas around the world, people are paying top dollar to see their favorite elite players and teams in action, while millions of global viewers watch from afar. These competitions have all the same elements of traditional sporting events with one nuance: Players connect passes and strike their opponents with handheld video game controllers, and rarely do they leave their chairs.
Old-school sports fans may roll their eyes, but eSports—professional video gaming—is gaining traction as a spectator sport, garnering ticket sales, attracting major sponsorships and grabbing a growing share of advertising dollars. The segment is organizing around professional teams and leagues, many of them run by same high-profile owners of traditional major league sports.
Mainstream advertisers, from beverage companies to financial services companies, have come on as major sponsors and advertisers. The International Olympic Committee is even considering bringing eSports to the Paris 2024 Summer Olympics.
“eSports is a phenomenon in the world of media. It sits at the junction of the leisure industry, video game publishers, the events business, the sports world, media rights, and advertising and sponsorship," says Patrick Wellington, Head of European Media Research, who outlines this trend in a new report from Morgan Stanley. In 2017, eSports attracted an audience of more than 380 million, a 20% increase from the year prior. With a fan base that is young, affluent and global, eSports is well positioned to win sponsorship and advertising dollars. Excluding game publisher revenues, the category was worth an estimated $700 million in 2017, and that figure is on track to increase about 32% a year over the next couple of years, reaching $1.5 billion by 2020 according to independent forecaster NewZoo.
Video game enthusiasts have been coming together for tournaments and festivals for decades, but digital distribution channels coupled with the growth of gaming in general has given rise to an eSports ecosystem with many of the same dynamics as traditional major league sports.
The best players are now part of professional teams, which in many cases offer guaranteed salaries and benefits, coaches and training facilities. Teams typically participate in tournaments organized by independently-owned leagues. “The relationship is analogous to that of Formula One," says Wellington, adding that the largest tournaments pay out millions of dollars in prize money.
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