In December 2017, our co-founder Naeem published his first book that aimed to codify his knowledge surrounding the complex and vast industry. Since publication, it has sold over 250 copies.

For Naeem, it was never about the money but the value gained from the process of writing a book about the industry he loved. Furthermore, it provided him with a satisfaction of sharing knowledge acquired to help individuals and entities navigate through the space. The book has opened many doors for IG, enabling consultation of several non-endemic organisations that are eager to get into the esports industry.

Later this week, Naeem will be pulling the book from Amazon and releasing the content to our Galacticans. Following from this, the book will no longer be available in physical form.

We hope you enjoy the contents and hope it provides you with greater confidence in the industry that we are immersing ourselves in. Furthermore, it provides greater credibility behind some of our approaches to the execution of our vision.

NB. Esports is a dynamic industry and so please note that there may be aspects that are not up to date with the current landscape, such as the global revenue forecast. We will look to release an updated Intergalactic Guide to the Esports Industry 2018/2019 in the coming months.

CONTENTS

CHAPTER 1: BACKGROUND……………… P. 4

1.1 Introduction……………………………….. P. 4

1.2 What are Esports? ………………………… P. 10

1.3 History of Esports…………………………. P. 12

1.4 Driving Factors……………………………. P. 18

CHAPTER 2: ESPORTS MARKET ECONOMICS.. P. 26

2.1 Overview of the Market………………………… P. 26

2.2 Market Size & Growth Rate……………………. P. 30

2.3 Audience Profile……………….……………….. P. 31

2.4 Market Segmentation…………………………… P. 33

2.5 Regional Analysis………………………………. P. 35

2.6 Revenue Streams……………….……………….. P. 38

2.7 Direct Advertising & Sponsorship……………… P. 40

CHAPTER 3: THE ESPORTS INDUSTRY……….. P. 50

3.1 Esports Genres……………….…………………. P. 50

3.2 Esports Titles……………….……………………. P. 55

3.3 Game Publishers……………….………………… P. 74

3.4 Esports Event Producers……………….………… P. 79

3.5 Esports Teams……………….…………………… P. 83

3.6 Esports Players……………….………………….. P. 97

3.7 Esports Viewers……………….………………… P. 98

3.8 Esports Competitions……………….…………… P. 99

3.9 Brands in Esports: Case Studies & Tips………… P. 106

3.10 Esports Associations…………………………… P. 117

3.11 Esports Media Broadcasters…………………… P. 119

3.12 Comparison with Traditional Sports…………… P. 123

3.13 Esports Betting……………….………………… P. 128

CHAPTER 4: REPORTS ON ESPORTS…………… P. 133

4.1 The Nielsen Report……………….……………… P. 134

4.2 NewZoo Report……………….…………………. P. 141

4.3 Business Insiders Report………………………… P. 144

CHAPTER 5: OPPORTUNITIES & CHALLENGES IN ESPORTS……………….……………….…………. P. 146

5.1 Opportunities in Esports……………………….. P. 146

5.2 Careers in Esports………………………………. P. 148

5.3 Challenges in Esports……………….………….. P. 173

CHAPTER 6: THE FUTURE OF ESPORTS……… P. 191

6.1 Esports — The Next Olympic Sport? …………… P. 192

6.2 What Needs to Happen in the Esports Industry… P. 202

6.3 The Future of Esports…………………………… P. 214

CHAPTER 7: CONCLUSION……………………… P. 217

Chapter 1: Background

1.1Introduction

Entertainment is a form of activity that aims to capture and retain the interest of an audience, usually giving pleasure or delight. It is an inherent element of life that has evolved over time. The Ancient Egyptians played board games and sports, hunted, celebrated festivals and engaged in storytelling for entertainment. The Romans entertained themselves by watching gladiators battle to the death.

Various new forms of entertainment have emerged over the years, often broadly stemming from a previous form, a subsect so to speak. An example of this is the various forms of sport activities we see today. At this present day, there are over 8000 forms of sport around the world, with around 440 being internationally recognised. The 20thCentury could be considered the era of sports, with activities like football and boxing being huge entertainment activities.

Entertainment is subjective and changes according to societies perception on entertainment. Gladiators fighting to the death would not be generally acceptable in society today. Going further, sport popularity and perception are often segmented regionally. For example, NFL is huge in North America whereas in Europe, football is the dominant sport.

Towards the end of the 20th century, the gaming industry has established itself on a global scale, making real strides as an entertainment activity, particularly as technology has developed further. It is apparent that society has shifted towards a gaming culture, resulting in the industry becoming a multi-billion-pound segment within the entertainment market, over a few decades.

Within this gaming industry, a niche subsect has formed and evolved on a global scale. This niche aspect of the gaming industry is known as esports or competitive gaming. Think of it as the baby of video gaming and sports. We are, unquestionably, in the ‘video gaming sports’ (or ‘esports’) era in history.

My grandparents never played a single video game in their whole lives. They often had no time to play and there was no real availability of games. My parents did play video games to some degree, albeit Pac-Man and Space Invaders, but primarily played traditional sports. From my observations, it appears that from generation to generation, there is more exposure to games, in some form or another.

I myself was born in the 90s and fortunately grew up around both games and sports. I played and watched various sports, particularly football and cricket. I continue to play football on a regular basis and have been an Arsenal fan for over fifteen years. I also am an avid gamer. In terms of consoles, I have been a Playstation fan from the PS1 to the PS4. Additionally, I had a Gameboy where I used to ‘Catch ’em all’ on Pokémon. Even at school, we used to play games on websites like Miniclip and have Unreal Tournament competitions. I have also played many other PC games with friends over the years, including Runescape and the Warcraft series.

The point is that I have played a vast array of games over the years and the important thing to note is that the games I enjoyed the most have been ones that I could play competitively. Whether it was playing friends or others online, I wanted to be the best. It is this inherent competitive element in our DNA that has enabled esports to establish itself as a ‘one to watch’ industry.

Despite my avid gaming, I only became aware of the esports movement around three years ago. Following the initial idea for my business, I decided to do some research to see whether there was a market. It was then that I came across esports. I could not believe I had not heard of this earlier. Although, technically esports has been around for over twenty years, it is only in the last five that it has really taken off.

Since becoming aware of esports, I have put a significant dent into my ‘ten thousand hours’ to learn as much as I can about the complex industry. I have watched the industry with an intent eye for the last three years as I acquired my law degree at University.

Having graduated July 2017, I have pushed myself even further to expand my knowledge within the esports space. I have published several articles and have discussed esports on several panels. Despite this, I would not say I am an expert within this dynamic, complex and vast industry. The industry will constantly change as the industry matures, so continual development within the field is crucial and hence why I will update the book on a yearly basis.

This book aims to codify the knowledge and ideas I have developed over the years in relation to esports. This includes the key opportunities in the market, factors that are and will be the driving factors for growth and other pertinent information that would be useful for anyone wishing to delve into esports, as I am. I aim to provide a comprehensive guide to anyone who wishes to know more about the next billion-dollar industry.

1.2 What are Esports?

Esports or electronic sports are a form of competition that is facilitated by electronic systems, particularly video gaming. It is essentially a term that is used to describe playing games competitively. Just like football players play football together, esports players play video games together. A specific game played for a sport would be termed an esport (singular).

With the rise of the gaming industry, it is only natural that we have seen a competitive gaming scene grow concurrently. I think it would be naive to think that a competitive segment would not also rise from the flames of the global phenomenon of the gaming industry.

Esports are much like its traditional real-life sports brethren in their nature, but the main distinction is that esports are generally engaged online. Most commonly, esports takes the form of organised video game competitions, normally between professional players. It typically involves team-based gaming as a spectator sport, with ranked matches, although there are individual esports competitions. There are huge tournaments all over the world that take place in big arenas with vast crowds and colossal prize pools.

Esports is essentially a start-up industry with dozens of start-ups within it. As it entails gaming competitively, there are a vast number of titles that could be played at a competitive level. Increased accessibility to devices that enable gaming has further increased the scope of esports. Think about how many games you can play on your console, pc or even mobile. All it takes is a competitive element of the game for it to potentially sprout out as an esport. As the potential of the industry is realised, more game publishers will develop their games with esports in mind.

1.3 History of Esports

Some of the earliest well-known video games, such as Pong in the ’70s, were in fact competitive. During the 1970s and 1980s, video game players began featuring in popular magazines. One of the most well-known classic arcade game players, Billy Mitchell, set several high score records for six games. As a result, he featured in the 1985 Issue of the Guinness Book of World Records. Televised esport events also aired during this period, such as the American show Starcade (1982–1984). On this show, contestants would attempt to beat each other’s high scores on an arcade game.

The earliest video game competition took place in 1972 at Stanford University for the game Spacewar. The competition was called the ‘Intergalactic Spacewar Olympics’, where players were pitted against each other in an arena-style format. Competitors played as one of five different ships, avoiding hazards and gravitational pulls, whilst trying to torpedo enemies. Around 24 players gathered to compete in the five-man free-for-all and team competition for a chance to win a year’s subscription to Rolling Stone.

By 1980, the first large-scale recorded video game competition was held by Atari, called the Space Invaders Championship. This competition attracted more than 10,000 participants across the US who attempted to record the highest score, establishing competitive gaming as a mainstream hobby. In 1981, Twin Galaxies (a gaming world record organisation) formed and began keeping track of top players’ scores in titles like Donkey Kong and Space Invaders. They continue to run to this day.

From the 1990s onwards, the industry benefitted from increased internet connectivity and improved technology, particularly for PC games. This benefitted esports tremendously and is the period that video gaming took great strides. More competitive games emerged, such as Super Street Fighter II and Doom. Large esport tournaments were also held during this period, such as the 1990 and 1994 Nintendo World Championships which toured across the United States. Blockbuster video also ran their own World Game Championship in the early 90s where citizens from the USA, Canada, UK, Australia and Chile were eligible to compete.

By the late 90s, the number of tournaments started to proliferate. Competitions that were established in this period include: QuakeCon, Professional Gamers League (PGL) and Cyberathlete Professional League (CPL).

QuakeCon is a yearly convention that was founded in 1996 which included a large bring-your-own-computer (BYOC) competitive tournament held every year in Texas, USA. Twenty-one years later, the event is still running, with thousands of gamers from all over the world in attendance.

The Professional Gamers League (PGL) was founded in 1997 and was one of the first professional gaming esport leagues, run by Total Entertainment Network (TEN) and sponsored by the multinational, NASDAQ listed, company AMD Inc. The first professional tournament they hosted was for StarCraft, in which they received sponsorship from Microsoft, Nvidia, and Levi Strauss & Co, raising over $1.2 million in sponsorship money. It continues to run in the present day, with competitions held for a variety of games including Counter-Strike, Dota-2 and Hearthstone.

The Cyberathlete Professional League (CPL) was also founded in 1997, pioneering professional video game tournaments. Esports professionals began to make a name for themselves through the CPL, such as Johnathan Wendel. Johnathan, known as ‘Fatal1ty’, has reportedly earned around half a million US dollars in prizes during his esports career, signed several sponsorship deals and even created his own brand of gaming accessories. The CPL hosted competitions for a variety of games, including Counter-Strike, Quake and Warcraft up until around 2007. From 2007 onwards, the range of games played at the CPL increased in number, including popular games such as League of Legends and StarCraft II.

In 1999, new shooting games emerged such as Unreal Tournament and Counter Strike. The Counter Strike series has become one of the world’s most popular esports games. By the 21stcentury, Multiplayer Online Battle Arena (MOBA) games entered the scene and became a real hit. This genre of games often pits two teams against each other, blending strategy and RPG elements together. Each player controls a single character, who can level up, buy new items to get stronger and work with teammates to defeat the enemy team. Two of the most popular MOBA games, League of Legends and Dota 2, have gained enormous followings. Today, League of Legends has around 100 million active players.

These two MOBA games have become a staple in the competitive gaming scene. Concurrently, in the 21stcentury, esports has grown tremendously in terms of both viewership and prize money. Although large esports tournaments were established before the 21stcentury, the number and scope of the tournaments have increased significantly. Today, esports is bigger than ever.

The growth of esports could be attributed to many driving factors, including; increase increased internet connectivity, improvement in technology, increase variety of games and popularity of gaming in society. I will evaluate the different driving factors for the growth of the industry in the next section.

1.4 Driving Factors

There are many factors that could be attributable to driving the growth of the esports industry forward. In this section, I will outline the key driving factors that I believe have been instrumental in the industries growth over the years.

Firstly, improved internet connectivity has allowed esports to truly flourish through online play. The ability for gamers to compete in tournaments from the comfort of their own home is a factor that has undoubtedly propelled the industry forward. Players now can engage and play with fellow gamers online, irrespective of geographical location, increasing the convenience and sphere of influence of competitions. When online play was first introduced, there was an annoying lag time and the internet connection was temperamental, which would make playing online games frustrating. Now, with improvements to internet connectivity, online play is much improved. Online play and improved internet connectivity have provided gamers with the opportunity to connect with other like-minded gamers from all over the world. In turn, this has allowed gaming to become truly global and a core aspect of our culture.

Secondly, technology has improved by leaps and bounds over the years and it is significantly apparent in the gaming industry. If you compare gaming today with the ancient gaming industry of twenty years ago, it would be very difficult to find the resemblance. There are many examples of how the improvement in technology has driven the growth of esports, such as Artificial Intelligence. Future technologies, such as Virtual Reality, will also thrust the gaming industry to new heights.

Moreover, the utilisation of technology by the esports audience has enabled vast content consumption. There are over 4000 esports tournaments a year for the top titles, which means there is a lot of content for fans. The audience’s technical aptitude grows at a rapid rate due to the necessities of playing video games, watching the games and communicating with the community. In turn, this consumption has led to exponential growth in community building and development within the industry. Gamers are building e-communities through websites and clans/guilds/groups, creating long distance friendships in the process.

The current ecosystem provides for people, with similar interest, to quickly find one another and group up to share esports content. The fans understand their game, the stats, the best players, items and their potential, strategies and so on. They often share this knowledge through various platforms, such as social media, creating a cohesive community that only looks to expand further and cement gaming culture within our society.

Thirdly, the popularity and emergence of online streaming services have also been fundamental in driving the growth of the industry, and are the most common method of watching esport tournaments. Twitch, an online streaming platform launched in 2011, routinely streams popular esports competitions. As of July 2017, Twitch has had over 241 billion minutes of gaming content livestreamed, 10 million daily active users and over 100+ million unique monthly users. It is clear from these figures that digital streaming platforms are spearheading the growth of the industry.

Fourthly, there has been an increased popularity of gaming in society, particularly among the youth. Naturally, within this gaming culture, competitive elements have arisen as gamers aim to have the ultimate bragging rights. A gaming society that loves competition is a natural ingredient for driving the growth of the esports industry forward. This is reflected in the increased popularity for televised and streaming of esports. Other gamers watch top players of their chosen game to try and learn from the best, as well as feeding their entertainment cravings. Traditional sports organisations, celebrities and non-endemic brands have realised that there is a shift to a gaming society and have begun getting into the space.

Fifthly, increased availability of platforms and devices to play games have been a driving force for the gaming industry and esports. From the development of computers all the way to the present day, there has been a significant increase in the number of devices that can be used to play games.

Additionally, the availability of these platforms has increased significantly around the world. The number of people with access to computers, mobile phones, PS4’s and Xbox’s are truly staggering. According to the United Nations Agency that oversees international communication, there are more than 3.7 billion people now using the internet. According to Business Insider, Sony have sold over 60 million PS4 consoles and Microsoft have sold approximately 26 million Xbox One consoles.

Sixthly, video game publishers are also embracing the esports potential of their products. Take Nintendo for example, hosting the Wii Games Summer 2010: a one-month tournament with over 400,000 participants. Halo was revived as an esport with the creation of the Halo Championship Series in 2014, with a prize pool of $50,000. Additionally, both Blizzard and Riot Games have their own collegiate outreach programmes with their North America Collegiate Championship. Moreover, game publishers are now taking esports into consideration when updating and developing games. They are incorporating esports into their game clients and other communication channels. This approach by game publishers has provided a bespoke approach to the esports market, catering to the target audience.

Lastly, as the industry has grown, there has been an influx of sponsorships and a dramatic increase in prize money. With the hype around the esports industry and the earning potential, it is no wander that the industry is attracting vast amounts of new fans and participants.

Esports may not be something new, but has become increasingly and successfully attractive to the public. All these different elements, and more, are fuelling the exponential growth of the esports industry. The rise of social media, live streaming and extended distribution options for broadcast have enabled esports to truly breakdown geographical barriers in a way that traditional sports have often struggled with. Esports is a hugely complex market and it would be incorrect to pin the success of the industry on one individual factor. It is the concoction of factors that I have highlighted in this section that have been integral in driving the esports industry forward.

Chapter 2: Esports Market Economics

2.1 Overview of The Market

As you delve into the esports market, it is apparent that the industry has come a long way and has a huge potential for growth.

Due to its globalised and online nature, viewership for esports is significant, making it comparable to traditional sports. Additionally, the viewership is increasing as time goes on, not diminishing. It is suggested that esports will have more viewers than NFL Football by 2020. The industry has been described as an ‘advertising goldmine’, supported by the fans spending habits.

Nearly every big esports tournament is streamed free to Twitch. This platform allows people to watch their favourite team or individual players while chatting with other spectators. Some watch for pure entertainment, others watch to learn from the best and apply that knowledge to their own games.

As online viewership within esports has grown, the scope of events and physical viewership of esports events has also increased. An example of this can be seen by the annual League of Legends World Championship. In 2013, the League of Legends World Championship was held in a sold-out Staples Center with approximately 19,000 attendees. Following from this, the League of Legends 2014 World Championship in South Korea had 40,000 fans in attendance and even featured the band Imagine Dragons!

With these past events attracting crowds comparable to live established sport games, professional sport franchise owners will be aware that esports can provide an avenue to fill arenas. As the market continues to grow, owners would benefit from events that can fill up their arenas when games are not on.

Football clubs such as Manchester City have started signing FIFA stars who are players of the virtual game, rather than the real thing. Other clubs, such as Paris Saint-Germain (PSG), have signed up a whole squad of players in a variety of esports.

The thinking is simple for these clubs: digital gaming is where the next generation of fans will come from. Often, a young person’s first interaction with a professional football club is through the FIFA game, and so esports are a vast reservoir of future income. Additionally, esports will allows clubs to raise their global profile. It will allow clubs to generate new fans of the brand, tapping into US and Asian markets, who may not necessarily be fans of football.

A variety of large companies are also paying attention to esports, primarily due to the desirable demographics of the audience and the clear potential of the industry. In 2014, Amazon purchased the online streaming provider Twitch for $1 Billion. In the following year, Modern Times Group, a Swedish based media company, purchased Turtle Entertainment (the holding company for ESL) for $87 Million. The Canadian entertainment company Cineplex spent $15 million in the same year to acquire an esports company and create a new gaming league that will take place in its theatres. Although esports might not match or surpass traditional sports any time soon, its potential business value is clearly too significant to ignore.

In Britain, we are just starting out on the esports road, relatively speaking. Traditional sport still dominates, but every day new evidence of change emerges. BT Sport broadcasted the FIFA 17 Ultimate Team Championship Series in the UK for the first time this year. Last month, Tottenham Hotspur announced their new ground will host live eSports matches, with potential crowds of 50,000 and revenue of up to £3m a match. It is only a matter of time before UK catches the esports fever, especially considering that UK gamers spent almost £3.3 billion on video games in 2016, according to NewZoo.

2.2 Market Size & Growth Rate

Looking at the global revenue of esports in NewZoo’s reports over the last few years demonstrates the industries growth rate and potential. In 2015, the global revenue for esports was $325 million. The following year, the global revenue increased by 51.7% to $493 million. The 2017 global revenue for esports will amount to $696 million, a 41.3% increase from 2016. NewZoo forecast the global revenue for esports to increase to around $1.5 billion by 2020, as brand investment doubles.

NewZoo also posits that the global awareness of esports will reach approximately 1.3 billion this year, up from 1.1 billion in 2016. Awareness is forecasted to approach 1.8 billion by 2020. The market is already at a colossal stage despite having significant room to grow. Esports is expected to rival major league sports in the immediate future.

2.3 Audience Profile

The NewZoo report states that the global esports audience has increased by about 19% from 2016, reaching 385 million this year. This is made up of 191 million esports enthusiasts and a further 194 million occasional viewers. The number of esports participants will reach 58.4 million this year, up from 49.8 million in 2016. To demonstrate the size of this market, if this audience was classified as a country, it would be the third largest according to population.

By 2020, the global esports audience will be well over 500 million, with the number esports enthusiasts expected to grow to approximately 286 million. The key drivers for the esports audience growth includes the rise of streaming platforms, new franchises like FIFA and Overwatch joining the scene and growth in emerging regions.

The esports audience skews young and male, with half of them aged between 21–35 and over 71% men. Majority of these are in full time employment and have a decent income. Their demographics make them a very desirable target group for different parties, especially big brands. Particularly as digital natives are more likely to be consuming content online than through traditional media outlets.

There is a large technical aptitude to the esports audience, which consists of Generation Y (including Millennials) and Generation Z. This demographic like skill-based entertainment, preferably through digital means. Esports has the potential to offer them this type of experience.

Pro-players and viewers predominantly trends to a young, male demographic on a global scale, which should be very attractive to advertisers and sponsors.

2.4 Market Segmentation

The esports market can be segmented in a variety of ways. Esports market segments can be identified by genre, the game title, platforms used, key players, revenue source and based on location.

The most obvious segment within esports is within genres and games. Esports is composed of different genre of games, such as Multiplayer Online Battle Arena (MOBA), First-Person Shooters (FPS) and Sports games. Although there will often be some overlap, the market for some games and genre segments would not be the same for others. Take shooting games and sports games for example. Some, like myself, will play games in both genres, such as Call of Duty and FIFA. Others, however, may only play games in one of the genres.

As shown by the Nielsen report, the market is further segmented according to the platforms utilised to play games. Gamers have been spoilt for choice in the present day with a whole host of platforms that can be played on. The most popular platforms would be the PC, PS4 and the Xbox One.

The market is also segmented according to the key players in the esports industry. The ‘key player’ segments include; fans, players, teams, organisations, game publishers, event producers, associations and communities.

In relation to revenue source within the esports landscape, the market can be categorised into; sponsorships, advertising, merchandising, ticket sales, esports betting, fantasy esports, prize pools and media rights, to name a few.

Geographically, the esports market is segmented by regions. Within different regions, the size of the esports market and the popularity of games differs. Take sports games for example. In the US, the most popular sports game is Madden, whereas in Europe it is FIFA.

2.5 Regional Analysis

Esports is at different stages of development across the globe. While esports have long been biggest in Asia, particularly South-Korea, North American and European markets are growing exponentially. It is important to note that there are key differences in the esports markets on a regional level. This is considered further in the Nielsen Report chapter.

NewZoo’s 2017 esports report highlights the present size of the esports market, in terms of revenue, in the different regions.

The Asian esports market is one of the most established and largest regions. According to NewZoo, the global revenue for esports within the Asian market is around $328 million, with the Chinese market reaching around $104.4 million. Around 11.1 billion esport videos were streamed in 2016 in China. 57% of esport viewers come from China, with at least 6 million university students taking part.

The 2022 Asian Games, to be hosted in the Chinese city of Hangzhou, home of online retail giant Alibaba, will include esports as a medal event.

North America is also dominant region in terms of numbers of gamers and revenue generated in the esports market. The North American esports market was forecasted by NewZoo to reach $257.5 million in 2017.

About 20 US universities have made esports official varsity programmes. In 2016, Japan surprised many by agreeing to allow visiting esports tournament participants to enter the country on visas normally reserved for athletes.

The European market is estimated to generate a global esports market revenue of around $269 million. Esports revenue within Europe is mainly generated from Western countries, like Germany and France.

2.6 Revenue Streams

The key revenue streams within esports include; sponsorships, advertising, merchandising, ticket sales, media rights, prize pools, esports betting and fantasy esports.

According to NewZoo’s report, the revenue breakdown according to source is as follows:

· Sponsorship — $266.3 million (+57.7% increase)

· Advertising — $155.3 million (+21% increase)

· Game Publisher Fees — $115.8 million (+17.9% increase)

· Media Rights — $95.2 million (+81.5% increase)

· Merchandise & Tickets — $63.7 million (+42.4% increase)

Sports investors find esports compelling because of the industry’s ability to tap into the five main revenue streams: Sponsorships, Advertising, Merchandise, Tickets and Media Rights. The most lucrative revenue streams, according to NewZoo, are sponsorships and advertising. Sponsorship and advertising account for 60% of the total global esports revenue from the five main streams. This can be attributed to many new brands and advertisers entering the space. The other revenue streams, such as merchandising and ticket sales, are huge untapped markets. They have huge potential to grow as the industry matures and other issues are addressed.

Additionally, it is important to note that the revenue does not stop with the five main sources. There is revenue generated as the industry converges established industries and through other distinct sources, such as esports betting and fantasy sites.

2.7 Direct Advertising & Sponsorship

The esports landscape has been compared to the Wild-West, however, if a marketer can navigate through this space there would be substantial rewards. Gamers have shown loyalty to brands that do it right as it is this investment from celebrities, endemic and non-endemic brands that has fuelled the exponential growth of the esports industry.

The digital age and online advertising has changed remarkably over the years. Native advertisements and banner advertisements prevailed over the internet in the 2000s. Now, they are despised and are the least effective according to the CPM (cost per mile), how much the ads are looked at and clicked on. As a result, methods of marketing have evolved and become more creative. The internet user is now less ok with invasive ads and ad block rates are at an all-time high. As a result, traditional forms of marketing are now becoming less effective.

Esports represents a huge untapped market for advertisers. NewZoo, a research company, predicts that brands will invest more than $1 billion in esports advertising by 2020.

If you are seeking to secure sponsorship as a team, player or event — utilising and extrapolating data from previous events hosted, along with reasonable predictions to back it up would be beneficial. For example, approaching a sponsor and informing them that you have had 5000 viewers for your last tournament with minimal investment. Then you can predict, reasonably, how much viewers you can get with some capital. This number will be the exposure of the sponsor’s product or service. Let’s say you predict that with a £5,000 sponsorship, you can get 15000 core viewers at your next event. That means for every £1 the sponsor spends, their brand gets exposed to 3 viewers. Framing your proposal in this manner puts the proposal into a much better perspective for the sponsor.

Depending on what product or service the sponsor is selling, you can then work out what their return on investment would be. Using a £10 product as an example, it would be clear that you would only need 500 viewers to purchase the sponsor’s product to recuperate their investment. That is one in every thirty viewers making a purchase.

Direct Advertising

Advertisements are defined by the Advertising Association of the UK as messages paid for by those who send them, which are intended to inform or influence people who receive them. These messages can take the form of various platforms, including television, radio, internet, events, sponsorships, clothes, sounds, visuals and even people (endorsements).

As traditional forms of advertising have become less effective, brands are looking for innovative ways to reach their target audience. Esports provides brands with a platform to reach their target audience and have a significant return on investment, if done right.

Sponsorship

Many events and organisations use sponsorship to offer more exciting programs and to help cover rising costs. In turn, sponsorship allows the sponsor to reach specifically targeted niche markets without any waste. According to Nielsen Market Intelligence, since the start of 2016, there has been over 600 esports sponsorship agreements.

Sponsorship is the financial or in-kind support of an activity that is primarily used to reach specific business goals. According to IEG’s Complete Guide to Sponsorship, “Sponsorship should not be confused with advertising. Advertising is considered a quantitative medium, whereas sponsorship is considered a qualitative medium. It promotes a company in association with the sponsee.” Sponsorship and brand partnership have been fundamental in helping accelerate the growth of esports globally.

Sponsorship is a powerful marketing tool that is a powerful complement to other marketing programs. Esports sponsorship provides the brands with significant opportunities for distinct marketing, whilst showing support to the player, organisation or team as well as the industry. This often results in the target market perceiving the sponsorship in a positive way. Brands are provided with the prospect of broadening their competitive advantage by increasing their credibility, image and prestige.

Below are a few of the benefits a brand can get from Sponsorships:

· Return on Investment: The investment from the sponsor can reap huge rewards for both parties.

· Enhanced Image: Sponsoring events that appeal to their target market are likely to shape buying attitudes and have a dramatic effect on customer relations. The audience will see the sponsor in a positive light for adding value to esports.

· Driving Sales: Sponsors can showcase their product and services. Often food & beverage companies use sponsorship to encourage sampling and sales. Other companies can use a ‘causal strategy’, like American Express with their ‘Charge Against Hunger’ campaign where they donated to needy causes. Consequently, this campaign provided a significant rise in sales volume.

· Enhanced Positive Exposure: Positive publicity results in heightened visibility of the company’s products and services. Target audiences often perceive sponsorship in a positive way, as the sponsorship often allows more or better activities to take place. Various media platforms covering the event will often have sponsors names and/or photos. Therefore, sponsorship can generate media coverage that might not have been available otherwise.

· Differentiation from Competitors: This is particularly the case with exclusive sponsorships. The company have an opportunity to stand out from the competition, which is particularly helpful if the competition has a larger Ad budget. It essentially is a powerful tool that smaller companies can use to combat industry giants.

· Providing ‘Good Corporate Citizen’ Status: Sponsorship allows companies to be perceived as a ‘good neighbour’. By supporting the community and contributing to the economic development of esports, the sponsor would gain enormous goodwill. This has been shown in the esports industry as fans favour sponsors providing value.

To some extent, sponsorship allows for exposure in an audience that would not be reached otherwise. Many of the early sponsors had existing ties to the gaming industry (endemic brands), such as PC manufacturers (such as Intel) and peripherals makers such as Logitech. Now, however, more traditional non-endemic brands are starting to join in.

Some examples include, Vodafone sponsoring the Spanish team G2 Esports and the razor brand Gillette, which sponsored the ESL’s Intel Extreme Masters in Poland this year. The Team Liquid franchise are sponsored by gambling brand PokerStars, among others.

Three-time NBA champion with the Los Angeles Lakers, Rick Fox, launched his own esports franchise last year. He believes that potential sponsors are showing increasing levels of interest in competitive video gaming. Fox believes that the brands, leaders and early adopters that build a presence in esports now will be able to carve out opportunities for themselves and consequently will be well set for the future.

When deciding to enter the esports space as a sponsor, it is important to create a solid strategy for activation. It needs to make sense and done for the right reasons. Additionally, before sponsoring, the sponsor must feel that the event or organisation will be successful. This confidence can be achieved through the sponsee’s proven track record, good prospects and general alignment with the sponsor’s brand and business objectives.

The entity receiving the sponsorship also stands to benefit enormously from both financial support and other forms of backing from an established partner, provided that the agreement, partnership and activation is done right.

Chapter 3: The Esports Industry

This chapter will focus on the industry itself, particularly the different components and players that make up esports presently. As you will see from this chapter, the esports industry is hugely complex because of the number of key players within the space.

3.1 Esport Genres

Within the gaming industry, there are several genres that games can fall under. These different genres appeal to different demographics, which is what makes esports so lucrative and exciting. Often, games can overlap into more than one genre. Below are some of the top esport genres.

Multiplayer Online Battle Arena (MOBA)– Games include League of Legends and Dota-2

This genre is also known as Action Real-Time Strategy (ARTS). The genre is often team based games, where the players characters usually have various abilities and advantages that improve over the course of the game. This genre is a fusion of Action, Role-Playing and Real-Time Strategy games. This genre has become a staple of the emerging esports scene, and concurrently is the most popular in terms of participation and viewership. The world is MOBA mad, with developers around the world trying to get their slice of the battle arena pie.

MOBA games often require a great deal of intelligence. Studies that have been conducted to measure the connection between intelligence and video game performance, focussing on MOBA games. Essentially, five players would face off against each other, with the goal usually to take over the other team’s base. Each player controls a single avatar that can be any one of a number of characters with unique abilities and moves. Communication is key between the players in a team, so they can engage in strategy in order to win the game. Games in this genre require players to have a strong memory and a deep understanding of tactic and strategy in order to win.

First-Person Shooters (FPS)– Games include Counter Strike, Call of Duty, Overwatch

First-Person Shooters are video games that are centred in a first-person perspective, often around firearms and other weapon-based combat. The genre shares similarities with shooter games and so falls under the heading of action games. Games in this genre are often fast paced with bloody firefights.

Shooting games have become widely successful as a game genre, accounting for a huge portion of video game sales. The Call of Duty franchise, for example, has had more than 175 million sales across all titles.

Fighting Games– Games include Street Fighter, Tekken and Mortal Kombat

This genre usually consists of gamers controlling an on-screen character, engaging in close combat with the opponent. These games often involve violent and exaggerated attacks against opponents. Hand to hand combat is often emphasised, with some ranged and melee weapons often featuring.

Fighting games were the dominating genre in the 1990s but have faced a general decline. Even popular franchises that have been release post-1990s have not attained the popularity of earlier fighting games.

Real-Time Strategy (RTS)– Games include StarCraft and Warcraft

This game genre often entails a multiple unit selection game, where multiple game characters can be selected to perform different tasks, as opposed to selecting only one. The real-time element has evolved from the turn based systems seen previously.

Sports Games– Games include FIFA, Madden and NBA 2k

The sport game genres usually simulates traditional sports, such as football. Within this genre, gamers can play their favourite traditional sports and utilise their favourite players or teams. One of the best-selling series in this genre is the FIFA video game series.

The sport genre emerged early in the history of video games, with titles like Pong in the ’70s. Due to the genres nature, it remains popular today.

Racing Games– Games include Trackmania, iRacing and Forza

Games within the racing genre consist of gamers competing against time or an opponent, using some means of transportation. Racing games can be considered in the category of sports as well.

3.2 Esport Titles

Within the gaming industry, there are a vast number of games that could be played at a competitive level, but only a handful are popular esport titles. As you will see from this section, the most popular esport titles are hugely complex and require a good understanding of the game. The mechanics of the game needs to be understood and strategies implemented. Additionally, considering many of the titles involve team-based esports competitions, there is a high degree of teamwork required as well.

It is also worth noting that esport titles come and go. Many popular esport titles in the ’90s are no longer at the top of the scale, in terms of viewership and participation. This section should provide an insight into what makes titles hugely popular in the present landscape of the esports industry.

League of Legends (LoL)

League of Legends is a multiplayer online battle arena (MOBA) video game, developed and published by Riot Games, for Microsoft Windows and MacOS. The game employs a freemium model, funded by microtransactions to purchase champions, champion skins, ward skins and certain multi-game boosts.

The hugely popular game was released in 2009 and has grown to over one hundred million active players each month. LoL has among the largest footprint of any game in online streaming media communities such as YouTube and Twitch. The games popularity has led to expansion into merchandise (toys, accessories, apparels) and the tie-ins to other media such as music videos, web series, documentaries and books.

In LoL, gamers play the role of an unseen ‘summoner’ who controls a ‘champion’ with unique abilities. They can battle against a team of other players or computer controlled champions. There are many distinct game modes with goals such as destroying the opposing team’s ‘nexus’ — a structure that lies at the heart of the base protected by defensive structures.

The champions start off relatively weak but increase in strength as they acquire items and experience over the course of the game. As of August 2017, there are currently 138 champions in LoL. The most important distinction between the champions are in the type of damage that they deal.

Physical damage is resisted by the armour stat and magical damage is resisted by the magic resistance stat. Some champions can deal a combination of both and can choose which damage type to emphasise. Furthermore, item choice plays a fundamental role in a champions character. The official Riot classification of the champions are as follows:

1) Marksman — Ranged champions that usually deal physical damage. These champions are usually high damage per second (DPS) as they focus on sustained long-term damage as opposed to burst. They tend to have a weak defence.

2) Mage — Magical champions that deal magic damage and support skills. The mage champions are hugely diverse as some focus on killing a single champion from range very quickly while others specialise in area of effect damage to multiple targets. They tend to have weak defence and mobility.

3) Assassin — Melee champion that usual deals physical damage. These champions tend to have excellent mobility but a weak defence.

4) Tank — These champions are hard to kill and soak up damage for their team. They also have useful ‘crowd control’ capabilities to distract or disable enemies, or force the enemy to attack them first. In exchange for these strengths, the tank usually deals less damage.

5) Fighter — With a blend of attributes from a damage dealer and tank, these champions combine moderate survivability with damage. This champion is a common choice for close-range melee fighters as they need to be able to survive long enough to close in on their target.

6) Support — These champions have skills that are meant to directly aid the rest of the team. By utilising the ability to heal, buff allies and debuff enemies these champions are essential for most teams.

As you can see, this title is hugely complex with a vast array of variables. The League is active and widespread within the esports scene with over 1900 tournaments completed and over $48 million awarded in prizes.

Riot Games organise the League Championship Series (LCS) in Europe and North America, consisting of ten professional teams in each continent. Similar competitions also exist in the Asian market; including League of Legends Pro League LPL (China), League of Legends Championship Korea LCK (South Korea), League of Legends Master Series LMS (Taiwan) and the Garena Premier League GPL (Southeast Asia). These regional competitions conclude with the annual World Championship. The 2016 World Championship had 43 million unique viewers and a total prize pool of over $6 million.

More recently, the 2017 League of Legends World Championship took place at a completely sold-out Bird’s Nest Stadium in Beijing (around 40,000+ fans). An augmented reality dragon (modelled after the in-game Elder Drake) soared around the Olympic arena halfway through the performance, with a giant Summoner’s Cup rising from the grounds of the stadium at the same time. The overall performances of the Championship ceremony received widespread praises.

Dota-2

Dota-2 is another free to play MOBA game, developed and published by Valve Corporation in 2013. The esports juggernaut is the sequel to the Defence of the Ancients (Dota). Interestingly, there are 132 heroes in Dota but currently 115 in the sequel. Valve appear to be bringing all the heroes over to Dota-2 slowly.

In this game, players independently control a powerful hero, who have unique abilities and differing styles of play. The heroes often have a distinct role that defines how they are to be used on the battlefield, although many heroes can perform multiple roles. Dota-2 heroes are divided into three categories: Strength, Agility and Intelligent.

During a match, two teams select their individual heroes that collect experience points and gold, which they can use to purchase items, to grow stronger. Additionally, the hero gains new abilities as he levels up. The aim of the game is to destroy the opponent’s Ancient, which is a large structure defended by the enemy team. While carrying out this objective, the team must protect their own Ancient and kill enemy players.

Dota-2 is a huge title within the esports industry. There have been over 800 tournaments completed and over $128 million awarded in prizes.

Counter-Strike: Global Offensive (CS:GO)

CS:GO is the 4thgame in the Counter-Strike series, released in 2012. It is a multiplayer first-person shooter video game that was developed by Hidden Path Entertainment and Valve Corporation. The game pits two teams against each other, aimed with the task of eliminating the enemy and completing separate objectives. The objective is dependent on which of the six different game modes is played. The game modes are as follows:

· Competitive — This mode pits competitive players against each other in two teams of five.

· Casual & Death Match — These are less serious modes, primarily used for player practice.

· Arms Race — This mode is like the ‘Gun Game’, where players race to upgrade their guns via killing enemies.

· Demolition — This is similar to Arms Race, but players are required to plant and defuse the bomb.

· Weapons Course — This is an offline practice mode designed to help new players.

The Counter-Strike series have been prevalent within the esports space for some time now. CS:GO has had around 2800 tournaments played and $42 million in prize money issued.

Overwatch

Overwatch is a team based multiplayer online first-person shooter video game, developed and published by Blizzard Entertainment. It launched on the PC, PS4 and Xbox One in 2016.

Overwatch assigns players into two teams of six, with each player selecting from a roster of pre-defined ‘Heroes’. Each of these characters have a unique style of play, which can be divided into four general categories:

1) Offence — Offence heroes have high mobility and the ability to deal large amounts of damage. To offset their strength, they have a low number of hit points

2) Defence — These characters excel at protecting specific locations and can provide means of support, such as sentry turrets and traps

3) Tank — These heroes have the most hit points as their role is to draw enemy fire away from their teammates to themselves. They have various means of protecting themselves with shield-like abilities.

4) Support — These utility heroes have abilities that enhance their own team or weaken the enemy team (using buffs and debuffs). They do not deal much damage, nor do they have much hit points.

Blizzard have developed and added new characters, maps and game modes post-release for free. The only additional costs to players are the in-game microtransactions. The developers have aimed to create a diverse cast of heroes that are balanced. Furthermore, they have tried to ensure that new players would be able to have fun, while skilled players would present each other with a challenge.

Upon release, Overwatch received universal acclaim from critics. The game has been praised for its accessibility, diverse appeal of hero characters and enjoyable gameplay. Overwatch has become a recognised esport, with Blizzard helping to fund and produce professional leagues and other tournament events. The developers have included and planned features for the game to support the competitive community. The game has enough variety in maps and characters, and strong support from Blizzard to maintain the game as a strong esport.

During the 2016 Blizzcon, Blizzard announced plans for their Overwatch league, using permanent teams in league placements like more traditional sports. Blizzard will help to organise potential team owners and aim to include more geographically-local teams to participate. This is with the aim of sparking more spectator and potential sponsor interest, built around supporting a local team.

Blizzard expect all players within the league to receive a salary. Furthermore, they anticipate that the Overwatch league will have a seven-figure payoff for the winning team at the end of the season.

Despite Overwatch only coming to the market in 2016, it has been successful on the esports scene. There have been around 500 tournaments to date, with over $5 million in prize money awarded.

FIFA Series

The FIFA series have been developed and published by EA Sports on an annual basis since 1993. The football game is notable for being the first to have an official license from FIFA (football governing body). Over the years, EA Sports have added many exclusively licensed leagues from around the world to the game, allowing the use of real leagues, clubs and player names.

Within the game there are several modes that can be leveraged by players. These include both offline and online modes. FIFA fans can play a head to head match with their friends, embark on a career mode with their favourite team or play online in three main modes. The three main online modes are:

1) Classic Online — In this mode, gamers compete against others online in a ‘Season’ system, using official teams. They play a set number of games per ‘Season’ and need to hit a target point threshold to be promoted to the next division.

2) Ultimate Team — This is EA Sports golden nugget, bringing in huge revenue for the publisher. In this mode, gamers build their ‘Ultimate Team’ through acquiring player cards in a variety of ways. They then play with their team against the computer or others online in a ‘Season’ system.

3) Pro Clubs — This is probably my favourite FIFA mode. In Pro Clubs, gamers create a ‘Pro’, setting his characteristics and qualities that determine his attributes within the game. Gamers can then join others in a team of up to eleven players and compete in the ‘Season’ system to climb their way up to division one.

Additionally, within these three modes, players and teams (pro clubs) can play against other players and teams in arranged friendly matches.

FIFA is not a major esport title at this moment in time, despite its global dominance in the football video game market. For FIFA 17, there were only around 40 tournaments with $1.4 million in prize money. However, having watched this market for several years, I feel it is due exponential growth, particularly with EA Sports recently announcing their plans for the FIFA 18 eWorld Cup.

The video game series is the bestselling sports video game franchise in the world, and one of the bestselling video game franchises. FIFA 18 is the latest title in the series. In the future, we may see the disappearance of sequential FIFA series.

EA Sports chief executive Andrew Wilson recently revealed in an interview with Bloomberg that the FIFA series could become a subscription service, following a structure used by entities like Netflix and World of Warcraft.

By creating a year-round live service, gamers would simply purchase a recurring subscription that would give them access to FIFA. EA sports would then update, patch and improve the game year-round. Transfers and new features would be implemented on a rolling basis, with game modes being introduced by provision of a downloadable in-game update. No more having to wait for the next release date to see your favourite football players in their new team.

This move feels natural as the gaming and digital world is moving from a disc world to one based on a subscription model. It would also reduce the dip in activity after several months from the release date, creating sustained engagement. From my experience, activity within the title is hugely seasonal, with the peak being around the release date.

Regardless of EA Sports’ efforts to push the FIFA series into a ‘top esport title’ category, there are other things in this segment that need to be addressed before it can truly take off.

3.3 Game Publishers

The main activity of game publishers is to develop and commercialise video games for domestic use. When their video game acquires relevance in the field of esports, some publishers also participate in the organisation of events or establish some conditions for a competition using their video game.

In comparison to traditional sports, there are fewer content restrictions around major esports events. This is because game publishers are in the business of selling games, as opposed to selling media rights to competitions featuring their games. Despite this, within the esports market, the power lies with the game publishers. They can decide who, when and under what conditions can organise a competition around their product.

At this moment in time, esports is viewed by publishers primarily as a method for marketing their games. The more people that are seen to be playing the game within esports, the more people are likely to purchase the game or make micro-transactions within them. Additionally, the interest of traditional media presents new opportunities for game publishers to increase the exposure of the game title to a new audience. Ovum, a market research business, has forecasted global revenues generated from micro-transactions within PC games (such as LoL and Dota 2) will rise to a colossal $28.1 billion by 2019.

Game publishers evidently make more from game sales and micro-transactions than from fans directly watching the game, at this moment in time. As a result, the current balance of money indicates that it is more important for game publishers to nurture the grassroots to attract more gamers to play their game and make in-game purchases.

Game publishers are recognising the interest within esports, and so have sought to adopt the format of established sports tournaments to increase their game’s appeal to television and brands. For example, EA sports have recently announced their Global Series on the road to the FIFA eWorld Cup 2018. Starting in November, this global ecosystem will feature more competitors and tournaments than before, where players will be able to participate in an array of online and live events to qualify for the Global Series play-offs. The Global Series will culminate with the first ever FIFA eWorld Cup 2018 Grand Final. By August 2018, the winner will be crowned the undisputed world FIFA champion.

Many publishers are now providing extensive statistics and data to the players and the community. In Dota-2 for example, every single player action from every single match can be downloaded by the esports community. The main use of these statistics is for analysis. Being able to access your own data, along with the ability to analyse and strategise, undoubtedly improves performance.

A professional team may have an analyst working for them, providing a dissection of matches and comprehensive analysis. However, the clear majority of the esports community are reliant on a few analyst providers and the tools built in to the game. There simply is not many effective, easy to use, tools to help utilise the data for the everyday gamer. I think game publishers need to take further steps to provide extensive tools to help teams and players analyse and engage with the data. In turn, this would be hugely beneficial for the grassroots esports community and therefore allows the future of esports to become more sustainable.

Valve have taken another approach to nurturing their gaming community. They organise four Majors for Dota-2, which culminate at The International. These majors are further backed by open and regional qualifiers in multiple geographies. Riot Games have also hosted the League of Legends Championship Series across multiple territories, including France, Germany, the UK and Belgium. This investment in the grass roots of their respective games has provided increased accessibility to competitions and sustainability of the games as esports.

Valve have made significant additional steps in creating a sustainable ecosystem for their games (Dota-2 & Counter Strike). For example, players can spend money in CS:GO and get special items. That money would go to valve with and a sizeable portion (25%) put into an esports fund, which feeds into tournament circuits. The community funds the tournaments and Valve still make money in the process. The money spent would essentially feed back into the esports ecosystem, with the effect of increasing the player base.

Game publishers play a fundamental role within esports, as it is their product that is the focal point of any esport. Therefore, the esports industry is heavily reliant on game publishers. They will play a crucial role in the development of the nascent industry.

3.4 Esports Event Producers

Esports event producers make most of their revenue from sponsorship and advertising, sold around video streams associated with their content. The adoption of the structure of established sports within esport events further reflects the sense that esports is heading towards mainstream. The interest of traditional media provides the Event Producers with the additional opportunity to generate revenue from selling rights to broadcast the event.

There are gamers that play together online every night and often use these live events as an opportunity to meet in person. Event producers need to tie event experiences into the games that they love, in a fun way. There are plenty of ways of doing this, which inevitably would bring the community closer together. Furthermore, by providing digital tools and models (like you would see viewing an established traditional sport), the event is made easier to follow by fans.

Sometimes, the game publishers can play an active role in acting as competition operators. Often, it will be external operators that will produce esport events. The event producers will also play a crucial role in the development of esports. They play a fundamental role in providing a platform for gamers to engage with others on a competitive level.

I think it is important for esport event producers to consider catering for the grassroot gamers of the esports communities. Additionally, they should produce bespoke events that cater for the specific title they are providing competitions for. Presently, there are several operators that have diversified into providing competitions for several titles. This can be detrimental to their approach if they do not ensure that their competitions are tailored to the title’s audience. Event producers should take the title and the target audience in mind when forming their competition.

Esports event producers will also play an imperative role in the future of esports. There are a few key established event producers in the space, such as MLG, ESL and DreamHack.

Major League Gaming (MLG) is a professional esports organisation founded in 2002, headquartered in New York. In 2016, MLG was acquired by Activision Blizzard. The organisation holds official video game competitions for games such as Call of Duty.

Electronic Sports League (ESL) is an esports company that organises video game competitions worldwide. ESL was founded in Germany back in 2000, and is one of the world’s largest and oldest esports company that is still operational. They host pro leagues for a number of esports titles, including Overwatch, Counter Strike, Rocket League and Mortal Kombat, to name a few.

DreamHack is a Swedish based esports events and production company, founded in 1994. DreamHack usually hold event in Western Europe and North America, for titles such as League of Legends and Counter Strike.

3.5 Esports Teams

There is an ever-increasing number of teams and organisations within the esports landscape. Despite this, due to the infancy of the industry, there are teams and organisations here one day, and gone the next. This is demonstrated in the ranking of top 10 teams (www.esportsearnings.com) based on tournament prize money, player transfers and team statements published on the Internet. Several teams have become defunct, despite having earnt a significant amount of prize money. I have also included a few other noteworthy Esports Teams.

As you will see, many of these teams are global. This is particularly the case with multi-genre esport teams. They may be headquartered in one specific country, but their teams are often located in various countries around the world.

Team Liquid (1)

$17,684,421.65 overall team earnings (1091 Tournaments).

Team Liquid is a multi-regional, multi-genre professional esports organisation based in the Netherlands, founded in 2000. They originally started as a news site focussing on StarCraft. Then, following the release of StarCraft II in 2010, Team Liquid signed their first professional players.

In 2012, Team Liquid made their first venture into multi-genre management as they recruited a North American Dota-2 team. By 2015, Team Liquid then merged with Team Curse, bringing in League of Legends, Street Fighter and Super Smash Bros teams. They now have teams in a variety of other genres, including Overwatch, Halo, Counter Strike and Heroes of the Storm.

Team Liquid’s Dota-2 squad won the International 2017, winning $11 million in prize money from a tournament that has had the largest prize pool for a tournament in esports history. Their partners include HTC, Monster Energy, Twitch and Discord.

Evil Geniuses (2)

$16,513,384.93 overall team earnings (671 Tournaments)

Evil Geniuses are an esports organisation based in the United States and founded in 1999. Originally, they were founded as a Counter-Strike team but now they have many divisions, fielding players in various fighting games, as well as other hugely popular games such as Dota-2, LoL, Halo and Call of Duty, to name a few.

Evil Geniuses Dota-2 division won the International 2015, receiving the largest prize reward in esports history at the time ($6.6 million). The organisation has some big partners, which include Monster Energy, Xfinity, SanDisk, AMD and Twitch.

Newbee (3)

$11,892,337.79 overall team earnings (105 Tournaments)

Newbee is a Chinese based esports organisation founded in 2014. Newbee fields players in Dota-2, Hearthstone and League of Legends. Their Dota-2 squad won the 2014 International, receiving a prize of over $5 million.

LGD Gaming (4)

$10,048,136.10 overall team earnings (108 Tournaments)

LGD Gaming are an esports organisation also based in China, founded in 2009. They have teams competing in Dota-2 and League of Legends tournaments. Their Dota-2 team has reached the International for five years consecutively. They came 3rdin 2012 ($150,000 prize), 5th-6thin 2014 ($650,000 prize) and 3rdin 2015 ($2.2 million prize).

Wings Gaming (5)

$9,718,065.87 overall team earnings (22 Tournaments)

Wings Gaming is a defunct Chinese Dota-2 esports team, founded in 2014 and folded in 2017. They were best known for winning over $9 million at the International 2016. They were also nominated as the esports team of the year at The Game Awards 2016.

In 2017, all five of the playing members left the team and played under the banner of Team Random at a Dota-2 Major. Following a bottom placed finish, the team disbanded, with many of the players taking a break from professional Dota-2.

SK Telecom T1 (6)

$8,478,931.94 overall team earnings (211 Tournaments)

This team is run by the South Korean telecommunications company, SK Telecom. SK Telecom T1 was founded in 2002, primarily competing in League of Legends competitions. The team is part of SK Sports, which includes South Korean baseball, football and basketball teams. They have been sponsored by a number of brands, such as the apparel company New Balance.

Fnatic (7)

$8,397,014.42 overall team earnings (669 Tournaments)

Fnatic is a professional esports organisation that was founded in 2004. The organisation is headquartered in London, United Kingdom, but fields players from around the world in a variety of games. The games that Fnatic compete in include Counter-strike, Rocket League, Call of Duty, League of Legends and Dota-2

Fnatic are renowned for winning the first ever League of Legends World Championship in 2011. Furthermore, the organisation have one of the best Counter-strike teams of all time, having won three CS:GO Majors and many other tournaments with the other titles in the series.

Fnatic’s partners include AMD, Fnatic Gear, GG.bet, NewZoo and Twitch TV.

Virtus.pro (8)

$7,721,404.04 overall team earnings (323 Tournaments)

Virtus Pro are an esports organisation that has competing teams in Counter-strike, Dota-2, World of Tanks, League of Legends, to name a few. They are based in Russia and were founded in 2003. In 2015, the organisation received an investment of over $100 million from Alisher Usmanov’s USM Holdings. Usmanov also is a key shareholder in Arsenal FC, and is reportedly worth $15.1 billion.

Invictus Gaming (9)

$7,082,799.40 overall team earnings (343 Tournaments)

Invictus Gaming is another multi-game esports organisation based in China and founded in 2011. They are primarily known for their Dota-2, League of Legends and StarCraft II teams, but also field teams in a number of other games.

Invictus Gaming’s Dota-2 team won the International in 2012, winning $1 million in prize money.

Vici Gaming (10)

$6,657,922.62 overall team earnings (184 Tournaments)

This Chinese based professional esports organisation was founded in 2012. Vici Gaming are also a multi-game esports organisation, fielding teams in Dota-2, League of Legends, StarCraft II, FIFA and Counter-strike.

The Dota-2 division has performed well in many competitions, most notably finishing runner up at the International 2014 after losing to Newbee. Vici Gaming also have many partners, including the likes of HTC.

Cloud9 (13)

$5,792,795.32 overall team earnings (487 tournaments)

Cloud9 are an American multi-game esports organisation, fielding teams in a large number of games. They were founded in 2012, focussing initially on League of Legends. Following the success of the LoL team in North America, the team expanded to cover a range of other games including Call of Duty, Dota-2, Hearthstone, Super Smash Bros, Rocket League and Overwatch.

SK Gaming (18)

$4,729,165.51 overall team earnings (508 tournaments)

SK Gaming is an esports organisation based in Germany, founded in 1997 by a small group of Quake players. SK Gaming primarily focus on Counter-strike, Hearthstone and Vainglory (mobile esports title).

Their Counter-strike team is based in Brazil and won the ESL One Cologne 2016 Major, defeating some of the top ten teams in the process. The prize for winning that major was $500,000.

SK gaming have performed exceptionally well over the years in various tournaments. Sponsors of SK Gaming include Toshiba, VISA, Intel, Kingston Technology and Mountain Dew.

OpTic Gaming (19)

$4,640,849.12 overall team earnings (204 tournaments)

OpTic Gaming, also known as the Green Wall, are a professional esports organisation based in America. They were founded in 2006 and boast teams in Call of Duty, Halo, Counter-strike, Gears of War and Dota-2. The organisation holds many rivalries, most notably eClassico with Team EnVyUs (another American based esports organisation)

The organisation won the X Games two years consecutively where they competed in Call of duty and Counter-strike competitions (2014 and 2015). OpTic Gaming won the best esports team of the year at The Game Awards 2015. In 2017, they clinched their first Call of Duty World Championship.

G2 Esports (26)

$2,492,781.23 overall team earnings (216 tournaments)

G2 Esports, also known as Gamers2, is a Spanish esports organisation that launched in 2014 and has teams in League of Legends, Counter-strike, Hearthstone, Rocket league and FIFA 18 to name a few.

G2 has numerous partners which include Vodafone, Paysafecard and Kingston HyperX.

Team Dignitas (30)

$2,432,122.12 overall team earnings (445 tournaments)

Team Dignitas is a UK based international esports organisation, founded around 2004, initially for Battlefield but then expanded into a wider range of games. Team Dignitas has four main divisions right now; Counter-strike, League of Legends, Heroes of the Storm and Smite. Their League of Legends team currently competes in the North American League of Legends Championship Series.

In 2016, a professional basketball team, Philadelphia 76ers, acquired the organisation. Team Dignitas’ partners include Alienware, Buffalo Wild Wings, Mountain Dew and HyperX.

3.6 Esports Players

Professional esports players may train for several hours a day to ensure they have extremely fast reflexes and reactions. In some esports titles, players may be required to make more than 300 actions per minute, so they need to be able to multi-task well. Furthermore, if there is an update, the gamers need to make sure that they have mastered any changes that have taken place.

The best players are often on the steepest learning curves. Often these star gamers have been thrust into a limelight for which neither they, nor the industry, were fully prepared. No other sport, except maybe Golf, have dynamics whereby regular players can use the same characters and play on the same field as the stars. Furthermore, thanks to streaming platforms like Twitch, fans can watch their favourite esport players practice online and engage with them.

Although esport professional players have some of the least power compared to the key players, they are central to the welfare of the industry. Without the players, esports would not be able to have grown to the height it has. It is obvious that if there are not popularity among players for a game, often it would not be a successful esports title.

3.7 Esports Viewers

Esports viewers are another key component of the esports industry. Without the 385 million strong esports fan base, the industry would not be growing at the rate it is. The viewers and the players are the heart of esports.

The young, male and decision-making profile of this audience is what is enabling the market to become so lucrative and appealing for advertisers and brands. Esports needs revenue to be able to provide viewers with what they enjoy so much!

It is the size and profile of these viewers that are driving huge investment into the industry. All other key players within esports must realise that this is the case and ensure that the viewers are looked after. They need to be listened to and kept engaged. If a game loses its viewer base for competitions, it will begin to decline within esports.

3.8 Esports Competitions

When esports first started, the money was not there. Tournaments were hosted inside lobbies of hotels and the pay-out was just a couple thousand dollars. However, as the industry has grown, the number of tournaments have proliferated, and the prize money has increased considerably.

Esports competitions have many different formats, with various subtypes. These variables can include:

· Match Types — Best out of one, two or three games

· Group Stages — Round robin, double round robin or swiss seeding.

· Knockout Stages — Single or double elimination bracket.

Globally, ESL, Blizzard, Riot Games and MLG are the organisers that have hosted the most tournaments in 2016. The total prize money awarded in 2016, in events with a prize pool of above $5000, was $93.3 million. That is a 52.9% increase from 2015, where $61 million was the total prize money awarded.

Below are some of the major esports competitions. There are many other competitions that have also been established and many others that are on the horizon. One thing is for certain; these competitions play a key role in providing gamers and teams with the opportunity to compete at a professional level, providing financial incentives at the same time.

The International (Dota-2)

The International is an annual Dota-2 esports championship tournament, hosted by Valve Corporation. The first championship tournament took place in Germany back in 2011, with a total prize pool of $1.6 million.

The prize pool has increased over the years up to the recent 2017 International, with a prize pool of $24 million. The 2017 championship has been awarded the biggest prize pool in esports history, breaking the record set by the previous year’s tournament.

Intel Extreme Masters

The IEM is the longest running tournament in esports. It has been put on by Electronic Sports League (ESL) and Intel since 2006. The location of the tournament changes city every year. It has been held in Dubai, Los Angeles, Hanover and many other cities. The 2016 IEM was held in Poland and had around 115,000 attendees.

The Intel Extreme Masters esports tournaments cover a host of games, including StarCraft II, Counter Strike: Global Offensive and League of Legends to name a few.

Riot Games Franchised Leagues

Riot Games have introduced a franchised league in North America starting in 2018, where permanent League of Legend teams are in the line-up. A player’s association will be set up and a minimum salary of $75,000 per individual player will be implemented. The teams will have to pay a $10 million fee, demonstrating the lucrativeness of this league.

The structure of the league will have a revenue sharing model, whereby league based revenues (media rights) and league driven revenues (sponsorship and merchandise sales) would be shared. Moreover, a media right deal with BAMTech (subsidiary of the Walt Disney Company) for $300 million has been confirmed.

League of Legends World Championship

The League of Legends World Championship is the annual professional world championship, hosted by Riot Games. It is the finale for each season, where teams compete for the champion title along with a Summoner’s Cup and $1 million prize. In 2016, the finals were watched by 43 million people, with 396 million total cumulative daily unique impressions. Furthermore, Riot Games allowed consumer contribution to the competition, driving the prize pool to more than $5 million.

The LoL World Championship has gained tremendous success and popularity, making it among the world’s most prestigious and watched tournaments, surpassing many sports tournaments.

The Evolution Championship Series

This annual sports event focuses exclusively on fighting games. The tournament is an open tournament that uses the double elimination format, whereby participants become ineligible to win the tournament if they have lost two games. The first Evolution tournament took place in 1996, where players competed in the Super Street Fighter II Turbo and Street Fighter Alpha 2 games. Every successive tournament since its conception has seen an increase in attendees.

Evo 2017 took place at the Mandala Bay resort featuring a host of fighting games, including Street Fighter V, Tekken 7 and Ultimate Marvel v Capcom 3 to name a few.

3.9 Brands in Esports: Case Studies & Tips

As alluded to earlier, according to Nielsen, there have been over 600 esports sponsorship since 2016. Majority of these coming from the IT/computer space. Nielsen’s Fan Report also found that 50–60% of respondents have favourable responses towards brand involvement in esports events and streams. Only 10% provided negative responses to brand activity. Improving the favourable perceptions of brand involvement from fans is fundamental to making esports an even more attractive industry. This can be achieved through education of the importance of brand involvement and also by deploying the right strategy in activation of sponsorship.

Nielsen indicates that more than 360 IT/computer sponsorships have been secured, followed by 100+ deals in retail, 60+ online services, 50+ non-alcoholic drinks and 40+ online media. So far, the top categories that have entered the esports space include: energy drinks, fast food, headsets, PC technology, PC hardware, gaming software, esports news and gaming chairs. Other categories include the automotive industry and the lending market.

There are different forms of sponsorship within esports. Brands can choose to associate with broadcast platforms, teams, players and events. With the way that esports operates currently, sometimes it makes more sense to sponsor players than teams. There is instability within the landscape, we see professionals switching teams all the time, and often their name carries more weight than the team name. As stability among teams, rosters and generally within esports increases, the number of brands sponsoring entities within the space will correlatively increase.

Sponsoring content is a way for brands to get past ad-blocking, but it must be done right. Brands must want to add value to the users and audience, not frustrate them. The brand needs to be taken and tied in with the player, team or event. The sponsorship needs to support the esports movement and be transparent. If you frustrate the viewers by being too invasive, it could affect your bottom line.

Brands looking to enter the space need to consider an altruistic, authentic and long-term strategy if they want success. Millennials are cause-driven individuals, and esports is a cause now. It is a niche market that is trying to establish itself mainstream and so brands that aim to lead the charge in driving the industry forward will be most successful. It is not as simple as having your brand logo placed on merchandise, but about improving the space. Questions you should ask when activating in the esports space are; Whether your strategy will authenticate esports into mainstream culture? Are you helping teams become more competitive? Are you providing opportunities for those within the esports space?

In March 2017, Magid Advisors surveyed 1000 consumers aged 16–45 in conjunction with the esports Ad Bureau. More than half the respondents said they watched a live esports event at least once a week, while 72% of these avid fans said they want advertisers to add value for the entire esports community. Fans also seem to not object to brand integration, if they make sense. They also favour advertisers providing product discounts to event attendees and the viewing audience.

Below are a few case studies of brands that have put money into esports in the hopes of reaching the elusive demographics that have become increasingly hard to reach via traditional advertising:

Coca Cola

Coke’s approach has been to utilize fan passion for esports. This includes some old-fashioned techniques, such as handing out ‘cheer boards’ at events which allow fans to scribble messages on them. Additionally, Coke also hosts viewing parties of big events at cinemas for those that cannot make it. For the 2016 League of Legends World Championship, Coke provided viewings for more than 200 movie screens across the US.

Coca Cola have a partnership with Riot Games, activating at the LoL tournaments across the US. They offer additional value to the fans as well as supplying their drinks. They have gone further and partnered with EA Sports FIFA to create a minor-league tournament for amateur players to compete in their first gaming competition. It is called the FIFA eCOPA Coca Cola and targeted college-aged gamers. Winners receive a cash scholarship along with entry to a professional esports event — EA Sports FIFA 17 Ultimate Team Regional Finals.

Gillette

Gillette activated at the Intel Extreme Masters tournament in Poland. They offered free grooming services to all competitors, as well as providing fans and players with a chance to customize their own 3D printed razor.

Bud Light

Bud Light had a difficult time when initially entering the space. Gamers tend to be sceptical of outsiders, particularly big brands. Bud Light activated by creating a group of ‘Bud Light All-Stars’, consisting of esports competitors. The final selections for the all-stars were chosen by fans from a group of players nominated by the brand.

Bud Light were criticized and accused of actually searching for brand ambassadors as opposed to actually finding the best. Dotesports.com even went as far as saying the players nominated were not good enough.

Despite the criticism, Bud Light were resilient and pressed on. As they started creating content featuring the all-stars, the pessimism began to evaporate. They have stated that they have been more than happy with the results and planned to continue the program in 2017.

Totinos (Pizza)

Totinos are brands of frozen pizza products. They activated at the Intel Extreme Masters in Oakland by providing ample samples to the masses. Additionally, they challenged gamers to remain on the red couches, that acted as moving (spinning devices), while trying to play a video game.

Comcast Xfinity

Comcast Xfinity is a high-speed internet provider that also activated in Oakland. The activation was operated by Comcast employees who are avid gamers themselves. They were ideal to lead the strategy as they knew the products and understood how to use the products for gaming purposes. This meant that the employees were able to converse about the actual event and have genuine conversations with fans, which no doubt provided authenticity.

Comcast craftily have gone for two partnerships. One is with ESL and the other is with the gaming team Evil Geniuses. This structure enables the brand to capture the excitement that fans have over their favourite team, as well as providing the brand with a more traditional play to run advertising and branding.

Going further, Evil Geniuses are a top team that operates out of two large Comcast markets — the Bay Area and Chicago. As part of the agreement, Comcast Xfinity’s branding features on the Evil Geniuses jerseys. In return, the brand have sponsored training facilities and provided them with a premium Internet service, among other things.

Comcast’s strategy with Evil Geniuses is one of natural integration, so when the players speak about the brands or products, it is much more authentic.

Other Sponsors:

Other brands that have had a big impact on esports and the gaming community in general include:

· IGN

· Twitch

· Gamestop

· YouTube

· Google

· Microsoft & Sony

· Doritos

· Redbull

· Nerdist

· Nissan

· Audi

You only need to look at how traditional sports have integrated sponsors for direction. Good sponsorship agreements work where the sponsor appears to be part of the show. This is what advertisers should look for — the goal of being treated as part of the production you are putting on. This is when you will see positive results from the sponsorship. To do this, brands need to look after the core fans by building and engaging with them. By being part of the cause with good intentions of wanting to further the player, the team or an event, you will become part of the movement.

Brands need to be careful to not upset the balance of the programme by activating in a way that does not makes sense. Additionally, it is critical that the viewers and fans are treated like people, as opposed to numbers or a revenue source.

3.10 Esports Associations

There have been many Esport associations formed over the years, all with a synergetic ambition to drive the esports industry forward.

The International esports Federation (IeSF) is probably the most developed governing body, growing from 9 eSport associations in 2008 to 47-member nations currently. It aims to promote esports and its players, and to standardise the industry.

Additionally, the World Esport Association (WESA) was founded in 2016 by the esports veterans, ESL, along with many esport teams. Founding members include big names such as Fnatic, Ninjas in Pyjamas and G2 Esports. It is another organisation that aims to set standards, help bring consistency and regulation to competitions, and organise the broader world of esports. WESA aims professionalise the industry through regulations, player representation and revenue shares for teams. It currently regulates the Counter Strike ESL Pro League for now, but hopes to add more leagues and teams in the future.

The British Esports Association (BEA) is the national body for esports in the UK. It has been designed to provide support and promote grass roots esports in Britain. In doing so, the BEA aims to provide esports with credibility as an activity by focussing on the positive benefits when done in moderation.

The Esports Integrity Coalition (ESIC) was formed in 2015. It is another association that hopes to be the recognised body taking responsibility for disruption, prevention, investigation and prosecution of all forms of cheating.

3.11 Esport Media Broadcasters

· Twitch

· Youtube

· Facebook

· Traditional Media Outlets — ESPN & Turner

Twitch TV and YouTube are the most dominant esport media broadcasters presently, and are currently fighting for market share. At this moment in time, Twitch appears to be the market leader, with Youtube generating competition. The direct attempt from Youtube to dethrone Twitch came in 2015, when they provided the ability for users to broadcast live via YouTube Gaming. Interestingly, Twitch allows for gamers to take their highlights to YouTube, and YouTube provides a notification to the gaming audience when the creator is live on Twitch. So, a fan can be watching their favourite player’s content on YouTube and then head over to Twitch when the notification pops up that the player is live.

Online platforms, such as Twitch, provide viewers with statistics and the ability to switch between the video feeds of different players. YouTube’s advantage is that it has a far wider social community for esport fans to share content with. The platform attracts avid and casual gaming consumers on a large global scale. It is crucial that an esports content creator use both platforms to grow the brand and audience.

Facebook, armed with 1.6 billion users, have made moves to get into the game. They partnered with live video content providers, including Activision Blizzard Media Networks, to show live content via MLG.tv’s Facebook page. MLG.tv also provide viewers with a feed of match statistics, live leaderboards and insights based on the competition they are watching.

Other esport video platforms include Azubu, Hitbox, uStream and StreamMe. These are similar but much smaller than Twitch and YouTube.

Conventional TV have tried to get involved by acquiring esport content producers and by creating its own content. In the US, ESPN began by streaming games on their website. They then expanded to provide blocks of esports broadcasting on their ESPN2 and ESPNU TV Channels. Recently, European broadcaster Sky launched the Ginx.TV channel to air esports competitions.

Another potential route to broadcasting esports is in investing vertically. Turner Broadcasting and WME-IMG invested vertically by creating the Eleague around Counter Strike. Coverage for the league is distributed on the TBS TV channel and on Twitch.

There are a few improvements that can be made to esports coverage. Presently, coverage has been confined to commentary of player versus player, with little context and broader narrative. It is this contextual storytelling that will allow esports broadcasting to soar to untold heights. There needs to be more pre- and post-game analysis along with more exposure in relation to individual player’s stories.

Content around analysis and side stories that creates additional storylines around tournaments would provide more engaging content for the audience. Furthermore, it provides the audience with emotional context to the players, teams and the game, making matches more meaningful.

3.12 Comparison with Traditional Sports

The significant audience and commercial cross over with traditional sports is worth evaluating. In this section, I will discuss the key differences and similarities between traditional sports and esports.

Classification as a Sport

Labelling video games as sports is a controversial point of debate. Much like professional athletes, gamers spend large amounts of time developing new skills that will help them compete in their games. Often the core rules of the game do not change, but the dynamics change as new characters and environments are added. Players constantly go through strategies to combat the different scenarios that they may encounter in a game. Gamers also need to have very fast reaction times and the capability to keep up with the pace of the action.

Esports can be considered a “real sport” by definition, much in the same way as chess or poker can be. There are many parallels between traditional athletic sports and esports. However, the virtual environment and lack of physical activity call into question whether we can truly define esports as “real sports” rather than a “mind sport”. Like poker and chess, esports are mind-based sports with limited physical activity. Some definitions use words like ‘usually’ and ‘or’ when talking about the physical activity involved. This further makes the case for the fact that sports need not always be physical athletic activity. The physical exertion and outdoor playing areas are not required by all traditional or non-traditional ‘sports’

According to the US Federal Government, esport players are considered professional athletes. In 2013, a Canadian League of Legends became the first pro gamer to receive a United States P-1A visa, a category designated for ‘Internationally Recognised Athletes’ allowing a stay of up to 5 years. In 2016, the French Government started working on a project to regulate and recognise esports. Recently, they passed legislation which regulates professional esport player contracts within their country.

Although many argue that popularity of esports should justify competitive gaming as a sport, I believe it is the careful planning, precise timing and skilful execution that should support the activity’s classification as a sport.

Esports Leagues Compared with Traditional Sport Leagues

Esport leagues are volatile places where commercially viable teams are here one day and gone the next — like the early big four North American leagues.

Take the NBA as an example. It was formed in 1949 when the Basketball Association of America and the National Basketball League merged, with sixteen teams. By 1955, only eight of these teams were still around. Original NFL franchises also came and went in the 1920s as the league found its footing. NHL also barely survived its first year as one of its four teams (Montreal Wanderers) disbanded after their arena burned down.

So, what gave the leagues stability and helped them grow? A host of changes. Changes that fuelled profitability, aligned the owners’ interest and helped them run their business in a predictable manner, on the field and on the balance sheet. The stability of franchises, revenue sharing agreements, player centric features and other elements from traditional sports can be used to create a more predictable ecosystem for game publishers, owners, players, sponsors and other esports industry participants.

Traditional sports can take a page out of esports book as well. They can look to improve on interactivity and live streaming of events.

Other Key Differences & Similarities

When you see someone do something good in a video game, you can literally go and do that thing. Traditional sports, you can see someone do something on the field, but you would need two teams of players, a field and so on. Esports is more accessible for the public and there is a much thinner barrier between the player and the viewer.

Additionally, esports tend to have a sequel like nature, with games rules and dynamics changing from game to game. On the other hand, in traditional sports, there are no football 2 or basketball 2. This characteristic causes instability and a lack of longevity within esports. Despite this, often games keep the core rules the same. I can see publishers dropping the numbers to sequels in the future.

3.13 Esports Betting

Simply put, esports betting is gambling on the outcome of an esports event. The bettors can use skins (virtual currency) as well as bet with real money. Esports, although in its infancy, has matured over the years to the point that it is now on par with some of the leading major sports in terms of viewership, following and interest.

Many of the world’s leading betting operators have recognised the opportunity and potential growth within esports and consequently, for some time now, offer esports betting options alongside their traditional products. Esports betting operators include Betway, Ladbrokes, William Hill, Sky Bet, Paddy Power, Mr Green and Pinnacle. They take bets on numerous esports matches and the volume of bets placed already exceed that of golf, tennis and rugby.

Betting operators see esports as a huge ‘blue ocean’ opportunity. As seen from sports betting, the gambling industry is a far bigger business than media rights, sponsorships and consumer revenues put together. Take NFL for example, generating over $13 billion in 2016. Betting and fantasy leagues around the NFL games are supposed to have generated north of $50 billion.

The global gambling industry has got to the point that it needs to appeal to a new type of customer. It is primarily the ability to tap into the millennial market that is so enticing to the operators. This target market is one which has always been of great interest to gambling operators around the w