Understanding Esports

What is esports? How does it all work?

In this modern day and age, the youths are pursuing new interests and hobbies that some would consider “less than conventional”. The internet is a powerful medium that facilitates many of these hobbies including: graphic arts, programming, video games, and esports. Esports has been a rapidly growing industry in the past few years in terms of viewership, financial investments, and public interest. As the highest echelon of competitive gaming grows in size, so does its viewership. This has caused an increase in awareness for many of the youth, and some are kids are even reaching their teenage years watching esports tournaments. Unfortunately however, for those who are not already well versed in the world of esports it can be a confusing experience trying to learn the ins and outs. The following article is designed to inform you on the basics of esports, and how it all runs.

Esports is the overall colloquial term used to describe competitive gaming. This include any entity evolved in the playing, hosting, coaching, or watching tournaments and leagues centered around video games. When most people first hear of esports it’s understandable that their first reaction is skepticism, because really, how competitive can Pacman or Candy Crush get? What people fail to realize is that the games played competitively have a level of complexity that basic games like Candy Crush lack. Thousands of hours are needed to gain an intimate understanding of the mechanics and strategy needed to win, and have a layer of depth that is impossible to spot from a layman's eye.

Esports, much like conventional sports, is not just one game, but rather comprised of a multitude of games, some larger than others. Some of the biggest esports titles include: League of Legends (LOL), Dota 2, Counter Strike: Global Offensive (CSGO), Overwatch, Heroes of the Storm, Starcraft 2, Hearthstone, and Fortnite. PC gaming has, and probably always will be more popular than console games. The accessibility, versatility, and sheer power of a computer will always outmatch consoles, which lend itself to a more casual crowd; hence the misconception. The aforementioned games are the top played esports titles currently, and are all played on PC. A few minor esports that are not played on PC include Halo 5 Guardians (Xbox One), Call of Duty: WW2 (PS4), and various fighting games such as Tekken, Street Fighter, and Super Smash Bros. (misc.).

Data courtesy of Newzoo global games market report 2018

Due to the nature of video games, not all tournament and league games have to be played in person. As long as teams are within the same region, to a reasonable degree, (Americas, Europe, etc.) games can be played strictly online. However in-person tournaments are the preferred method, as not only is it exciting for both the fans and players to be together in the same environment and socialize, but live play offers the smoothest, and most even playing field. These in-person tournaments/games are called “LANS”. These LANS are not entirely different from traditional sports games, but the atmosphere can differ. Often time tournaments are hosted in the same venue as gaming conventions, so players and attendees can have time to socialize, buy merchandise, and soak in the experience. Due to the fact games are played mostly online, it is easy to forget that esports and gaming in general is first and foremost a community. These gaming LANS cans help rekindle that sense of community, as sitting in a large stadium filled with thousands of fans cheering for the game you all love, is truly an electrifying experience. Cloud 9 winning the 2018 CSGO Boston Eleague Major

Each game has its own unique tournament and league system, all varying on popularity, developer support, and genre. Games such as CSGO have professional 3rd party organizations that host online leagues and tournaments, that after weeks of playing often culminate into a final in-person LAN for the grand finals. These 3rd party organizations are nothing to be scoffed at either, companies such as ESL have deep rooted connections in the western esports scene, dating back to its inception. In addition to these smaller 3rd party hosted tournaments, the developers of a game will several times a year donate a large lump sum of money to the prize pool of these tournaments, and create what are aptly called “Majors”. In the case of CSGO, these Majors occur twice a year, and have prize pools of a million dollars. Simply participating in one of these Majors, let alone winning, is a feat all esports players strive to meet. Other games such as League of Legends and Overwatch have developers that are more hands on with their esports scene. Riot and Blizzard respectively have there own franchised league in the form on the League Championship Series (LCS) and Overwatch League (OWL). Each league is fully funded and run by the developer, and are leaders in the esports industry. Having a franchised league simply means organizations have the right to operate and play in a specific location and league.This means no matter how poorly the team plays, that organization has the right to maintain a spot in said league. In traditional esports, there are many qualifying stages that teams need to win to earn a spot. Franchised leagues are the model for what most, if not all, major traditional sports operate under. The buy-ins needed to simply gain a spot in these leagues are massive, let-alone the cost of running a team. The sheer fact that massive organizations are scrambling to get there hands dipped in the esports pool when the barrier of entry is so high is a testament to the level of legitimacy and professionalism the whole industry of esports has grown to. The owner of the New England Patriots, Robert Kraft, purchased an a spot in the OWL for a staggering $20 million dollars. Similarly, the Co-owner of the Golden State Warriors, Joe Lacob paid $13 million dollars for a buy in the LCS. A plethora of other popular sports teams owners have followed suit and brought their own spots in franchised leagues, or otherwise invested in gaming teams

A promotion for Overwatch League An aspect of esports and traditional sports that overlap is the system in which free agents and players join teams in franchised and non-franchised leagues. This is speaking from a strictly non-legal sense, as contractually esports and traditional sports may wildly differ, however the general actions remain similar. Upcoming players are constantly trying to prove their talent and get scouted by larger teams. They often throw themselves into lower scale tournaments with smaller teams, in an attempt to have their efforts spotted by larger gaming organizations. This constant desire to be picked up is not in vain however, as being placed on a high tier team can reap many benefits, similar to traditional sports. These benefits vary from team to team, but a list of possibilities include: paid salary, support staff (coaches, analysts, etc.), housing (gaming house to improve synergy and scheduling), paid flights, housing, and food when travelling, name-awareness, a chance to practice with better players, and most importantly, a shot at playing in bigger leagues with more prestige and and prize money. According to CSGO pro “es3tag” (translated into english) “G2 is a world-renowned team, they are stars … They have taken the best stars from the two best French teams, and then they have given them a salary of 180,000 kroner.” This translates to roughly $22,000 USD, as a baseline salary. The players total income is also supplemented from other sources of income such as winning tournaments, and advertising from streaming. Of course these figures only apply to the very best of the best, so if players aren’t at the top they’ll be earning a fraction of that sum.

With both player salary and tournament prize pool constantly on the rise, the question is begged; where is all this money coming from? The monetization model for esports teams and players currently is neither elegant, nor the most optimized. Nonetheless, the amount of money trickling in the industry is steadily growing, and is proving sufficient. The main sources of income for big name organisations, are: sponsorships, advertisements, merchandise, media rights, ticket sales, and game publisher fees. If you look at any major gaming organizations website, it will not be very hard to find their list of sponsors/advertisers. These can range from gaming accessory companies, to tech companies like intel, to energy drinks such as Redbull. In the case of massive North American company “Cloud 9”, they are backed by the U.S Air Force! Media rights is the colloquial term used to describe any revenue stemming from various broadcasters who pay the right to stream certain games. Game publisher fees are similar, where the publisher/developer pay to host tournaments. On the player end of the spectrum, there are four main ways of generating income. These are salary, content creation, prize money, and sponsorship/advertisement deals. Salary and content are not mutually exclusive, however they usually are. This is due to a phenomenon that plagues many pro players: practice all day with teammates in preparation for tournament, or prepare less and create content such as streams or videos. esports in this day and age is so competitive it is common practice for players to spend upwards of 10-12 hours a day practicing with a team, and rarely do players have the patience or drive to stream or create content for another few hours. Devoting time to content creation is a far more stable and consistent form of revenue generation compared to relying on winning every tournament they participate in. Unless you are in the top 15 teams in the world, content creation will vastly overshoot any salary given, so it is truly a risk being a competitor only; a risk only taken by those youth (approx.16-22), or those with money saved.

Data courtesy of Newzoo Global Games Market Report 2018

Growth in any entertainment industry can be measured in many metrics, however one tried and true metric is viewership. This concept applies to esports as well, as viewership has been blooming especially in the last few years. Viewers are coming in from all corners of the globe, albeit on different forms of media. In the western world, the primary broadcasting outlet has been a website called Twitch.tv. Twitch has been ingrained in the gaming community for several years now, as it is the primary place for streaming live games. There are entire careers and industries built off this live streaming platforms, where hundreds of thousands flock to watch their favourite pro player or online entertainer play games. Tournament organizers take advantage of Twitch and simply live stream the matches, all for free. Due to the success of Twitch, many other sites have tried to jump on the gaming-streaming business. Websites such as Youtube and Facebook have joined the fray, albeit to varying degrees of success, and nowhere close to Twitch’s level. Youtube has seen the most success of the two contenders, as it is an already established and well used site in the gaming world. In short, if you are hoping to catch the next big tournament from your computer, head over to Twitch.tv or Youtube live streams. If you want to enjoy an esports game from the comfort of your coach, you’re in luck, as ESPN and other mainstream TV networks have begun getting timeblocks for esports. With all this taken into account, it is safe to say esports is on a meteoric rise in the western world.

Data courtesy of Newzoo 2018 Global Games Market Report and CB Insights

It is important to understand that despite all the recent hype garnered by huge bursts of momentum, esports is still very much in its infancy stage. In all metrics traditional western sports dwarf the numbers esports puts up, and if the industry wants to catch up to the big players, we’ve got a lot of work cut out in the coming years and decades. The one constant however that keeps the flame burning onwards, is the love and dedication of the esports community toward their games, and the competitive drive inside of them that pushes them to improve. This is proven when players like Alexis S. who plays a smaller game called TF2, plays not for the cash pool, but to “get recognition from teammates and players. ”Players are not alone in this endeavour, as the greater online community can provide helpful guides, and be a place to find new friends and teammates. High School Esports League (HSEL) is one such organization that grants high school players an opportunity to compete and meet similar like-minded across the country. Despite their young age, many of these students are well versed in the worlds of esports and the games they play. Players such as “Dash” or Eugene T. believes in a future where competitive esports is: “Just like any regular sport”, and as public awareness grows, the image will shift away from being “just a bunch of nerds clicking buttons” to an industry that should be taken seriously. Even members of the older generation are starting to shift gears, as father of HSEL player Jacob S. comments “I think Esports are exciting and I can't wait to see how the industry develops over the next several years. I'm excited that my son participates and think it would be pretty cool for him to explore the development side as well.” Another parent of an HSEL player has similar thoughts, stating: “The industry has taken off. The televised events are exciting to watch. I can see why gamers are drawn to it. You know esports is here to stay since colleges are offering scholarships to players. esports requires teamwork, discipline, trust and all the other things that other sports do. It even offers a professional option that pays pretty well. I guess as parents we can't say put that game down anymore.” With the top end of the pro scene expanding, more avenues are being created to climb up there. Just recently Blizzard unveiled their Path to Pro program for Overwatch, that allowed up and coming players to prove themselves. A more traditional familiar method, is the path that starts high school, into college, and finally into pro. The college esports scene is gaining traction as well, companies like Tespa and Collegiate Star League (CSL) are college level esports leagues which offer thousands of dollars worth of prizes. College esports clubs are now seeking to recruit the best players, using scholarship money as incentive. The best way for skilled high schoolers to gain attention of potential college recruiters is to join HSEL. HSEL is the best solution for high schoolers to delve into world of esports as not only do they give players a chance to prove themselves for money and fame, but also gives them a direct pipeline to a handful of the top college recruiters. The future of competitive gaming is uncertain, in 50 years this whole trend could just a memory of the early 21st century. But for at least the foreseeable future, gamers around the world can rejoice as we enter the renaissance of esports.

-Eric Yeung

Sources: https://dotesports.com/business/news/franchising-esports-owl-lcs-2018-19805 https://dotesports.com/overwatch/news/overwatch-league-slots-miami-dolphins-new-england-patriots-14537 -https://www.statista.com/statistics/490480/global-esports-audience-size-viewer-type/ -https://www.businessinsider.com/the-esports-audience-is-escalating-quickly-2017-3 Questions https://www.businessinsider.com/live-streaming-esports-online-tv-2018-1

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