Hackernoon logoHow Can Esports Get Any Bigger? Here Are 10 Ways by@stephenhays

How Can Esports Get Any Bigger? Here Are 10 Ways

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@stephenhaysStephen Hays

Esports has certainly caught the attention of a lot of people. We hear morning talk show hosts discussing Fortnite, we have seen streamer Ninja interviewed on CNBC and of course everyone has noticed the incredible prize pools and viewership numbers around many recent esports competitions. Regardless of what numbers you believe or donโ€™t believe, it is impossible to overlook or discount the growth of the esports industry.

A lot of folks, including myself, have talked about what has led to the esports market blowing up, as it has (I still think these are the very early days though). I wanted to put some thoughts together on what will drive esports from where it is now, to a multi-billion dollar market in just a few years (as projected by NewZoo and Goldman Sachs).

Below are the 10 things I think are currently driving, or will be needed to drive the esports market from todayโ€™s size of approximately $900 million (for 2018, estimated), to nearly $3 billion by 2022 (per Goldman Sachs):

  1. Continued acceptance of the esports market from traditional media outlets: We need more support from folks like ESPN and NBC, and other media distribution giants. We are starting to see it actually. Just look at the news from mid July (2018), where ESPN signed a deal to broadcast Overwatch League on ABC, ESPN, and other ESPN and Disney outlets. See news here: Overwatch League comes to ESPN, Disney and ABC.
  2. Continuation of broader macro trends in technology and communication: The technological developments of the last 20 years have driven the ability of gamers to connect online and for esports to be viewed online. It wasnโ€™t that long ago that we didnโ€™t have the technology or bandwidth for 100 people to play in one battle royale and for that game to be streamed over multiple channels to hundreds of thousands of people at one time (previously, you had to go to a LAN, in person, to play with your friends, now itโ€™s all online). Also, technology has led to more and more social connections being made and maintained online than ever before. As technology improvements drive increased video sharing capabilities and more digital social interaction, gaming will continue to increase and so will esports viewership which sits at the intersection of those two macro trends.
  3. Larger prize pools: As the prize pool announcements keep coming (Fortnite, Dota 2, PUBG, etc.โ€Šโ€”โ€Šclick links to see the amounts) and the numbers keep getting bigger and bigger, more attention is turning to esports. These prize pools will certainly help draw more attention. Do you remember how poker blew up and became something we see on ESPN regularly? Let me refresh your memory, some unknown folks started getting rich winning poker tournaments and all of a sudden there was a huge following, the competitions started airing on ESPN and the following increased dramatically, quickly. The same thing is happening to ESPN now. To be clear, esports will be much bigger than professional poker.
  4. Improved viewership experiences: Each game has its own unique way to play, watch, and follow it. This is dependent upon the game type, the game maker and the game meta among other things. OWL, LCS, PUBG, CS, etc. will all have to continue to refine their broadcasting and viewership experiences in order to attract non-endemic fans/viewers and keep those current viewers engaged and excited about watching in my opinion. The key here is encouraging folks who donโ€™t play those games, to watch, and the hard part is getting them to understand some of the games that are far more complicated than watching a ball bounce back and forth on a TV screen for 3 hours (check out this article from Bryce Blum on the topic as related to battle royale esports).
  5. More ways for content creators to monetize their following: As streaming and content creation become a viable income opportunity for more people, then more content will be created, thus satisfying more interests of more viewers. There is far more demand than supply right now for user generated content in the gaming and esports market (just talk to anyone at Twitch, or Mixer, or YouTube). The way to encourage more content creation is to create more ways for content creators to make more money from their efforts (both on and off stream). The earning potential needs to be there for not only those at the top of the streaming world, but for hundreds of thousands, if not millions, of content creators on multiple platforms.
  6. More investment in teams and infrastructure: More investment money will be pouring into teams, and infrastructure around the space. What I mean by infrastructure is tools and platforms that make game play experiences better, create more community around the gaming experience, and help make people better at the games they play. This increases engagement in gaming, and thus will drive more esports viewership. Separately, as the esports orgs/teams get more funding, they will be able to continue expanding their reach (in terms of number of fans, viewers and sponsor dollars) which will continue to bring more eyeballs toward esports.
  7. Easier ways to follow teams and competitions: Itโ€™s hard to keep track of every time your favorite team, or player, or league or game is played in a professional competition. Itโ€™s hard to know when those competitions are streamed. There is no central platform for tracking all of this. I know some people have tried and the one who is doing it best right now seems to be the โ€œUpcomerโ€ app. The industry needs solid resources for fans to track their teams in one place. Right now this is done via twitter accounts, and subreddits for each team. These are not efficient ways to do it.
  8. Attract more gamers, as viewers of esports: There are over 2 billion video gamers globally according to research firm NewZoo. Only about 5% of those gamers contribute to the esports audience to date (per same research). There is a lot of runway to get more of these people watching esports. As more of them watch it and engage socially (online) around the competitions, the viewership will continue to grow. There is a lot of upside here that isnโ€™t hard to convert, it just takes some advertising to and activation of those gamers.
  9. More gaming platforms used for esports / gaming competition: Currently, PC games dominate esports and the prize pools around the top esports. In the future, as mobile gaming (mobile phones) and even console gain popularity and distribution, there will be more esports interest in competitions on those platforms which will increase the player base, and the viewership base through broader awareness (there are more people who have cell phones, than people who have gaming rigs).
  10. Esports continues to become part of mainstream pop culture: Just about daily I can see a famous musician or actor streaming with one of my favorite streamers in a number of games from Fortnite to PUBG and so on. This is helping to drive more non-endemic fans (those who donโ€™t really play games themselves) over to watch esports.

Stephen Hays is a venture capital investor that has invested in a number of esports teams and startups.

Follow Stephen on Twitter Here


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