It
takes about 50 years for a "game" to become a "sport,"
according to Andrew Paradise's calculations. He's an entrepreneur who recently
joined the wave of investors getting in on the eSports game: His app, Skillz,
allows mobile-gaming fans to win real money while playing some of their
favorite titles. That's right, mobile eSports. From smartphones to dedicated
eSports arenas, Paradise knows why professional gaming is a booming market and
he explains it all in a straightforward, money-focused manner. If you've ever
looked at eSports and wondered, "Why?" Paradise might have your
answer.
A
screenshot from Valve's eSports documentary, Free to Play
Just
like video games, basketball and football weren't initially considered sports
and certainly weren't mainstream for the early years of their existence,"
Paradise says. "We are now hitting the 50-year milestone in eSports
history as people who grew up playing Pong have children playing League of
Legends and Call of Duty. In many respects, eSports have already gone
mainstream."
Hear
that, eSports haters? According to Paradise, dismissing eSports only
demonstrates how out of touch someone is with an emerging new reality -- kind
of like a musician deciding to abandon streaming services or tech companies
opposing net neutrality.
A
number of recent, high-profile acquisitions support the idea that eSports are
an accepted, legitimate sport, at least on the investment side of things: On
July 1st, Swedish entertainment company MTG acquired the Electronic Sports
League, the largest eSports organization in the world, spending $86.4 million
for a majority stake in the company. In September 2014, Amazon bought video
game-streaming site Twitch for just under $1 billion. Even CaptainSparklez, a
popular YouTube personality, has entered the mobile eSports market in a
partnership with Activision co-founder Howard Marks.
It
takes about 50 years for a "game" to become a "sport,"
according to Andrew Paradise's calculations. He's an entrepreneur who recently
joined the wave of investors getting in on the eSports game: His app, Skillz,
allows mobile-gaming fans to win real money while playing some of their
favorite titles. That's right, mobile eSports. From smartphones to dedicated
eSports arenas, Paradise knows why professional gaming is a booming market and
he explains it all in a straightforward, money-focused manner. If you've ever
looked at eSports and wondered, "Why?" Paradise might have your
answer.
"Just
like video games, basketball and football weren't initially considered sports
and certainly weren't mainstream for the early years of their existence,"
Paradise says. "We are now hitting the 50-year milestone in eSports
history as people who grew up playing Pong have children playing League of
Legends and Call of Duty. In many respects, eSports have already gone
mainstream."
Hear
that, eSports haters? According to Paradise, dismissing eSports only
demonstrates how out of touch someone is with an emerging new reality -- kind
of like a musician deciding to abandon streaming services or tech companies
opposing net neutrality.
A
number of recent, high-profile acquisitions support the idea that eSports are
an accepted, legitimate sport, at least on the investment side of things: On
July 1st, Swedish entertainment company MTG acquired the Electronic Sports
League, the largest eSports organization in the world, spending $86.4 million
for a majority stake in the company. In September 2014, Amazon bought video
game-streaming site Twitch for just under $1 billion. Even CaptainSparklez, a
popular YouTube personality, has entered the mobile eSports market in a
partnership with Activision co-founder Howard Marks.
A
screenshot from Valve's eSports documentary, Free to Play
It's
easy to see why investors are excited about the future of eSports. The industry
is valued at $612 million in revenue worldwide, with 134 million total viewers,
according to SuperData Research. Paradise says analysts expect these numbers to
grow by roughly 30 percent over the next five years. Investors today look at
the direct revenue generated by professional gaming, including competitions,
sponsorships, online ads, paid viewership, merchandise, licensing, tickets,
game sales and fantasy sports, to name a few pipelines, Paradise says. One
eSports championship tournament, the Dota 2 International, has a prize pool of
nearly $18 million this year, largely funded via fan contributions.
Investors
have to consider the fans "as an important metric for the future of the
industry and for potential revenue," he adds.
"ESports
are well on their way not just to legitimacy, but to true sports
supremacy."
--
Andrew Paradise
One
of today's most popular eSports games demonstrates the industry's ability to
rack up a lot of cash quickly: In October of last year, SuperData calculated
that League of Legends was poised to generate $1 billion in revenue in 2014
alone, and that's just via in-game transactions. It's worth noting that League
of Legends is a free game. The $1 billion comes from voluntary player
investment in new characters, fresh outfits, aesthetically customized items and
boosts, and it doesn't include revenue from major, sold-out tournaments,
streams or merchandise.
League
of Legends is one of the top eSports at the moment, alongside Dota 2, StarCraft
II, Counter-Strike and StarCraft: Brood War, Paradise says.
"Measured
by the number of participants or by minutes played, video games are already a
bigger industry than all offline sports," he says. "Additionally,
video games are much younger in their evolutionary history than offline sports
and are growing at a much faster rate."
Some
serious eSports bling
A
new, booming industry means big bucks for investors. Paradise says that his
company, Skillz, facilitates eSports competitions across games from more than
1,100 studios. "While many of the games we power are not household names,
the combined prizes paid in these games represent 30 percent of all eSports
prizes paid so far this year," he says.
Paradise
sees eSports as a rapidly evolving, lucrative industry that will soon compete
directly with -- and perhaps surpass -- traditional sports.
"Looking
at physical spectators, Game [8] of Major League Baseball's first World Series
drew 7,455 spectators in 1903 -- 64 years after the game was invented,"
Paradise says. "By comparison, last year's League of Legends Championship
-- which came just 42 years after the release of Pong [in 1972] -- drew over
40,000 spectators. ESports are well on their way not just to legitimacy, but to
true sports supremacy."
by
Jessica Conditt | @jessconditt | July 31st 2015 At 11:30am
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