E-sports Big Viewers And Big Money

Big Money, Deep Access

The roots of e-sports trace to the 1990s with the advent of fighting and shooter games like Street Fighter and Doom. Tournaments in those days were humble affairs, held in crowded hotel ballrooms in front of a few hundred people. Even the winning players often lost money after travel and hotel bills.

“I was the guy spending $1,000 to go win $800,” said Marcus Graham, an e-sports commentator and former professional gamer who now works for Twitch.

Deeper public interest in competitive gaming materialized in the early 2000s, especially in South Korea, where providing cheap and fast Internet access was a national priority and locals were wild for StarCraft, a science fiction strategy game. But the audience really started growing with the advent of free-to-play games like League of Legends, which was released in 2009.

The most fanatical gamers can spend an almost limitless amount of money on virtual goods in free-to-play games, buying special powers or tools, for example. But the vast majority of players never spend a penny in them, and the games have developed huge followings as a result. League of Legends has 67 million monthly players, about the combined population of California and Texas.

Even with the number of participants mushrooming, the Internet has forged a tighter link between fans and players than almost any other sport. Twitch, a website started in 2011, lets players stream video of their playing sessions over the Internet from PCs and consoles.

More than 55 million people visited Twitch in July to watch and interact with one another. The site has also become a lucrative source of revenue for gamers, who can make money through a mix of advertisements, subscription fees and donations from viewers.

“Gaming isn’t the kind of platform it was when we were kids,” said Matt Wolf, 45, a veteran of the games business who now leads Coca-Cola’s efforts to explore investments in gaming. “It’s a major mass media platform that now has multiple forms of consumption.”

The draw for marketers is the audience: mostly employed men, 18 to 35 years old, a group that has become harder to reach with conventional TV advertisements. Major video game competitions and online streaming sites offer companies new ways to find them.

The idea among game companies is that the marketing dollars from outside companies offer a virtuous cycle. More marketing money leads to better production values, which in theory will lead to increased interest in gaming.

And the more people who become interested in gaming, the more money there will be to spend on the games.

“Now, because games are run as continuous services where people can spend money as they play along, the game companies have bigger incentives to engage and entertain people continuously,” said Peter Warman, chief executive of Newzoo, a research firm that has studied e-sports.

 

Still, for the cycle to continue, the industry will most likely need to overcome some long-held opinions on games and gamers — in particular, that the skills involved are inferior to conventional forms of athletic excellence. When ESPN2, the cable sports channel, ran a show about the Dota 2 tournament in July, Twitter was flooded with derogatory comments about e-sports being shown as a sport.

Mr. Lampkin of ESL said he wasn’t worried about such attitudes. The argument over whether professional gaming is a sport in the traditional sense, he said, is beside the point now.

“If you don’t want to call it athletics or sports, that doesn’t mean anything to me,” he said. “That doesn’t change the reality of the massive growth we’re seeing.”