It is no surprise that video gaming and especially mobile gaming is a wildly popular social activity today.
What many of more traditional entertainment providers were surprised by was how quickly gaming also became a spectator sport.
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Back in 2014 people were debating the sheer potential of eSports, with many of them sceptical of gaming becoming a viable and sustainable career option.
Now, with platforms like YouTube, Twitch and Mixer opening up the world of video game streaming, and the news of the 2019 Fortnite World Cup competition winner bringing home three million US dollars, it¡¯s evident that the industry is growing at a tremendous pace. Games like DOTA 2, Fortnite and PlayerUnknown's Battlegrounds (PUBG), are amongst the few video games that generate huge numbers of fans across the globe.
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Recent insights suggest that this market is slated to touch 1.1 billion USD by the end of the current year, showing a growth of about 27% over last year.? And, according to market researchers Newzoo, the video gaming industry will be altogether worth $180.1 billion by 2021. A clear marker of pop culture and the subsequent Gen Z, this is mainstream entertainment of the future, with an 18% CAGR expected over the next five years.
Big media players are on top of this trend, aggressively investing in the eSports market. As a media services professional, what I find fascinating is the interest of mainstream broadcasters in this space. With multi-million-dollar media rights bought by the likes of ESPN and Sky to stream eSports events, it is quickly becoming the next exponential growth driver for the market.?
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However, there is a twist in the tale. Unlike traditional broadcasting, the competition in this market is not just between mainstream broadcasters, but also OTT players and social media giants. Given the highly immersive nature of eSports, the eventual winner in this market will be the one that can deliver a seamless and interactive viewer experience across devices.
With over 400 million estimated eSports viewers in 2019 its allure is undeniable. That said, delivering eSports globally has its challenges.
It is a new-age, hi-tech sport that is followed by young, tech-savvy and demanding viewers. At the same time, there are too many players from across the globe competing and too much happening simultaneously, making it difficult to follow everything in depth.
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In such a scenario, high-quality snippets and insightful highlights become critical for keeping viewers engaged. Given the audience demographic, there is a need to interact with the fellow viewers on social media and other platforms to discuss the game, share opinions and predict results. It's a high stakes scenario, given that there is significant spending capacity at play here ¨C broadcast, gaming software, hardware and so on. Let's not forget that viewers could be players themselves and thus may have ¡®real skin in the game' themselves.
These factors contribute to making it a complex challenge. Some of the challenges for broadcasters, operationally and technologically, are:
* eSports is an expanding market but even with the ever-growing number of fans and revenue streams, it is not regarded globally on the same level as mainstream sports like basketball, soccer or cricket yet. This means that content owners will need to have a lean production model that keeps costs in check. This is on the cusp of change with brands like adidas and Nike taking interest in gaming stars for sponsorship ¨C the big bucks are coming so early adopters will benefit.
* Multiple cameras, cutaways, reactions, commentary - on the go/real-time and intensive editing¡ All this needs superior connectivity and new-age broadcast technology that is built on the backs of robust digital infrastructure.
* To achieve growth and economies of scale, tapping new markets is the key. This will bring in a larger, more diverse viewership and in turn higher revenues. Broadcasters need to give viewers a reason to switch from the ¡°traditional¡± digital platforms that stimulated the growth of this industry.
* Media rights for traditional sports are fairly straightforward because no one owns soccer, cricket or tennis. With eSports, it¡¯s much more complex since the gaming company owns the content.?
As always, there is a lot to be considered. On one hand there is a need for achieving scale, efficiency and customer delight and on the other, there is a need for ensuring revenue balances out the costs of these events.?
South Korea is one country that has embraced eSports and made moves to integrate the industry as an intrinsic cultural trend; tapping into new fans and enhancing the experience of current fans. A lot of this has stemmed from within the industry itself but more traditional sports could learn from this.
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In Seoul, there is a dedicated eSports stadium, Nexon Arena, which has hosted eSports events since 2013. Founded by its namesake, a South Korean gaming company, the stadium hosts events for multiple games including StarCraft II and League of Legends. Unlike other sports, there is no traditional stadium format, this changes all the time and the infrastructure within the stadium has to be flexible to accommodate this.?
There is a dedicated eSports channel, OGN, pioneering the new way eSports is seen. OGN stemmed from one program following the rise in popularity of StarCraft in South Korea and progressed to a stand-alone channel estimated to spend upwards of $100 million each year to broadcast and produce live eSport events. They¡¯re now looking towards the North American market.
A governing body, Korean eSports Association, has been established to regulate and manage the competitive side of the sport and it¡¯s a member of the Korean Olympic Society ¨C a sure-fire sign of how seriously it¡¯s taken in the country, compared with elsewhere.?
While the technology which can make all of this possible exists in theory, the infrastructure in other global cities doesn¡¯t yet exist to the scale this fast-growing sport needs. South Korea tops the international table of internet speeds with an average of 26 MBps. High speed internet is invaluable for gamers ¨C it stops lag and therefore gives them the competitive edge. Additionally, its widespread broadband infrastructure means 90% of its population are internet users, therefore more people are likely playing.?
In South Korea, eSports has already woven itself into the mainstream and it¡¯s catching up fast in other countries. London Premier League Club, Tottenham Hot Spurs, will be hosting eSports at its new stadium this year, Reuters has created an eSports Wire and what may be astounding to some, a number of universities across the US are starting to offer eSports scholarships. When the topic is so exciting and such a game changer for the future, it is impossible to resist some crystal ball-gazing.
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Big data and AI machine learning: Traditional sports are not just about practice, they¡¯re also based on strategy and analytics. More than others, eSports is built for deep data analysis. Using AI machine learning, the industry and players themselves can track how they play and use the analytics to improve their play, track their competitors and change the gaming experience to something more customised.?
And not just improving play, AI can be used to meet the ever-increasing demand for highlights and conversations ¨C ensuring that ¡°best bits¡± can be pulled together almost instantly and used to engage fans in real time, and specific to their interests with tailored packages.??
This will also mean that technology and analytics will uncover many new pricing models and opportunities for additional revenue streams, for example team analysis in franchised leagues to ensure their will be a worthwhile ROI. It will serve as a guide for investors and brands which will evolve into more lucrative deals - not unlike how YouTube evolved over the past few years.?
Celeb status growth: The old view of a gamer as an awkward teen in his room is gone, players are now appreciated for the talent, skill and commitment it takes to get to the top. Even pros in traditional sports like Formula 1 star Lando Norris cites eSports as a key contributor to him learning his craft. Using the human stories from the players and their social media presence has the ability to get deeper fan engagement.?
Olympic Games: Despite it not being on the list yet, it¡¯s looking likely to be credited as an Olympic Sport in the coming years, predicted to be in action at Paris 2024. This will see it garnering an even bigger widespread appeal and respectability.?
Ultimately the money doesn't lie. The predicted growth rate and rapidly rising prize pots indicate that eSports is only set to get bigger. This is a classic case of audience demand, creating gaps in the market for us to fill, by expanding our own industries and collaborating with new partners. And while there are challenges ahead, the potential opportunities for the broadcasting industry are vast.?
About the author: An avid gamer himself, Dhaval Ponda is the Global Head of Sales, Media and Entertainment Services at Tata Communications