eSports: Electronic Games Become Spectator Sports

Big news in video games is the growing number of enthusiasts who are interested in gathering to watch other people play them. Gaming as a spectator sport is attracting viewers in the millions, most of whom pay for the privilege. According to Newzoo BV, 532 million people were expected to either watch video game competitions or participate in game play by individuals in 2022 on a global basis, up 8.7% from 2021. eSports were expected to generate $1.38 billion in global revenue in 2022. Media rights and sponsorship were expected to generate $837.3 million in 2022, or 60% of the total market. By 2023, the total audience is expected to rise to 646 million and revenue to $1.6 billion.

eSports are particularly popular in China, where 26% of Chinese internet users watch eSports at least once per month as of early 2020, which is about twice the rate in the U.S. and Western Europe, according to research group Ampere Analysis.

In late 2014, Amazon acquired Twitch Interactive, Inc., an internet video channel for broadcasting and watching people play games, for $970 million. By early 2022, Twitch had 140 million monthly active users compared to only 55 million in 2015. 71 million hours of content are viewed daily.

Sports arenas and other entertainment venues are hosting sell-out games tournaments. College campuses in the U.S. are joining eSports leagues. Turner Broadcasting System, in partnership with WME/IMB, established a league for videogame players and fans which has become ELeague. The league broadcasts games on TBS, Twitch.tv, YouTube and Esporte Interativo in Brazil.

Online videos of game players are proliferating in a practice referred to as the “Let’s Play” series of screen shots and video footage of people at play (e.g. Let’s Play Minecraft, Let’s Play Grand Theft Auto, Let’s Play Star Wars Battlefront 2). Let’s Players on YouTube are attracting subscribers in the millions, including a Swedish player named Felix Kjellberg (who uses the YouTube handle PewDiePie). Manufacturers are beefing up prize money to attract more gamers, thereby prolonging a game’s lifespan and extending its reach.

A major business initiative at games industry giant Activision Blizzard is called Overwatch, a console-gaming subscription service with tens of millions of subscribers. The Overwatch League sells tickets to fans who watch teams competing at live events, as well as TV broadcasting of this competition. (As of mid-2023, Activision planned to be acquired by Microsoft.)

eSports are in the mainstream on college campuses where teams are competing in tournaments for tuition money and other prizes. As competition (and prize money) grows, a niche for videogame coaches has opened up, both on college campuses and in other tournament play. For example, Riot Games, Inc. runs tournaments in which 116 teams compete worldwide, and each of those teams has at least one coach on staff, with salaries of between $30,000 and $50,000 annually.

Special stadiums dedicated to eSports games are being built around the world. In late 2018, the city of Arlington, Texas opened a 100,000 square-foot complex named Esports Stadium Arlington. This is a logical investment by the city, as it is already the home of the stadiums of both the Texas Rangers MLB team, and the Dallas Cowboys NFL football team. A firm called Allied Esports International has planned or opened several eSports stadiums, including locations in the U.S. (California and Las Vegas), as well as cities in China and Germany.

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