Illustration by Eva Fong
eSports industry shows rapid growth
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While traditional sports like football and basketball remain popular in the United States, competitive gaming, or eSports, has been exploding in popularity in recent years.
eSports first began to gain popularity in South Korea, which was beginning to recover from the Asian Financial Crisis of 1997. The South Korean government made reforms that allowed the internet industry to develop quickly in South Korea. As internet began to become increasingly available at faster speeds and cheaper prices, online gaming grew popular among the South Korean youth. Internet cafes began to foster tightly-knit communities of gamers both professional and casual. Eventually, gaming teams sponsored by telecommunications companies competed in tournaments for Starcraft, a strategic computer game, as early as 2002.
The eSports trend eventually made its way to the United States and Europe, and their popularity began skyrocketing at the start of the 2010s with the advent of online streaming services like Twitch and Hitbox. These streaming services broadcast gaming tournaments and other casual gamers and streaming popular games such as League of Legends and DoTA 2.
As the popularity of eSports began to soar in the 2010s, developers of these games took notice. Riot Games began to organize official tournaments for professional players of League of Legends, a multiplayer online battle arena (MOBA ) video game, and Hi-Rez Studios started to organize official tournaments for Smite, another MOBA game.
The market share and profits of eSports grew with their popularity. In its early years during the 2000s, tournaments were held in hotel ballrooms or at any other private venue and dozens, if not a few hundred spectators attended these events. Today, these tournaments draw millions of fans. According to SuperData, an organization that studies the eSports market, eSports have attracted about 134 million spectators worldwide as of 2015. To provide a better understanding of the intense popularity of eSports, the 2015 League of Legends Worlds Championship garnered about 36 million viewers, compared to 14.7 million for 2015 World Series and 19.9 million for 2015 NBA Finals.
Despite the popularity of eSports, the industry’s main source of revenue does not come from ticket sales or merchandise sales, but from corporate sponsorships, which SuperData reports as 81 percent of eSports revenue. Corporations have gotten wise to the increasing popularity of eSports and see gaming teams as opportunities to advertise their brands. Although technology corporations such as Intel, Logitech, and Alienware sponsor gaming teams of their choice and provide their equipment, other corporations like HTC, Red Bull, and Quest Nutrition sponsor gaming teams simply to promote their products. eSports teams often use product placement in their streams to advertise for these corporations, but they have even acted in commercials for them.
According to Newzoo, another organization that researches the eSports industry, eSports is predicted to generate $463 million by the end of 2016, an increase from $325 million in 2015. With the current trend of eSports showing positive growth, it does not seem as if it will fade anytime soon.
