This post extends from my previous analysis of how the Twitch live-streaming video service supports the Amazon platform. Despite competition from Google’s YouTube Gaming, Twitch remains the dominant platform for watching esports (i.e., professional video gaming). In fact, esports accounts for 11% of total Twitch viewership. In this post, I provide a brief overview of the esports market and its value for Hollywood.
Although competitive video gaming has existed for decades (see, for instance, the 2007 documentary The King of Kong: A Fistful of Quarters), esports as we know it today started in the late 1990s and early 2000s. In South Korea, the spread of high-speed internet connections and government support fueled competitions around online-based games like 1998’s Starcraft. The concept of esports has taken off in the US and elsewhere in the years since. Popular titles throughout the world today include Dota 2, Counter-Strike: Global Offensive, and League of Legends. According to market analytics company Newzoo, the global esports industry will achieve $1.1 billion in revenues for 2019 (up 26.7% from 2018) while total viewers will reach 453.8 million (an annual increase of 15%).
For “older” media companies (e.g., film and television studios as well as video game publishers), esports has come to represent a significant threat. Compared to the rising popularity of esports viewership, movie theater attendance continues to decline. Competitive gaming also has generated its own star economy (e.g., Tyler “Ninja” Blevins) at a time when film stars have come to matter less in attracting audiences. Furthermore, studies have found that esports viewers tend not to watch TV programming of any kind—including professional sports. Not only have ratings for “traditional” sports continued to fall whereas esports viewership has climbed dramatically, but also esports carries a much younger audience than those for leagues like MLB and the NFL. In the video game industry, publishers have integrated esports within an economic model known as “games as a service,” by which games like Overwatch (Blizzard, 2016) and Super Smash Bros. Ultimate (Nintendo, 2018) receive continuous support over an extended period of time in the form of downloadable content, software updates, and esports events.
Due to this competition, Hollywood stakeholders have taken several paths to join the growing esports market. As they have done with other emerging media formats like escape rooms and virtual reality, Hollywood studios initially used esports as a promotional tool to support their film and television properties. In 2014, Lionsgate became the first studio to sponsor an esports event, with the “Ender’s Game on Blu-ray Tournament.” In the years since, esports tournaments have promoted films like 2018’s Spider-Man: Into the Spider-Verse and TV series like Game of Thrones. Companies also have experimented with more direct involvement, with investments in esports leagues, teams, and content creators coming from movie-theater chains, TV channels, film studios, video game publishers, and professional sports leagues. Some have formed their own tournaments; for instance, Endeavor and AT&T’s Turner Sports in 2016 jointly launched ELeague, which has gone on to air esports events on TBS (other channels that have broadcast esports include NBC, Disney XD, and ESPN). By embracing the esports market, traditional media companies hope to reach an audience segment that has seemingly disappeared.
Newzoo estimates that, by 2022, the global esports market will hit between $1.8 billion and $3.2 billion in revenues. In addition to gaining enough cultural legitimacy to attract college scholarship funds and potentially join the 2024 Summer Olympics, particular growth areas for esports include franchising (e.g., Overwatch League) and mobile gaming. Despite this growth, challenges remain in the esports space—including a lack of diversity in terms of game genres and players, low TV ratings, and a larger struggle to gain mainstream acceptance (and, therefore, advertisers) in the US. In addition, older media stakeholders like Hollywood studios and, especially, game publishers have continued to largely approach esports from a marketing perspective instead of taking advantage of its unique potential for audience engagement and storytelling. As traditional media companies continue to enter the esports market (whether through promotions, investment, or ownership), they will need to address these challenges to sustain the market’s long-term viability.
