It is no surprise that video gaming, and especially mobile gaming, is a wildly popular social activity today. Recent insights suggest that e-sports is slated to touch US$1.1 billion by the end of the current year, showing a growth of about 27 percent over last year. And, according to market researcher Newzoo, the video gaming industry will be worth US$180.1 billion by 2021.
A clear marker of pop culture and the subsequent Gen Z, e-sports is the mainstream entertainment of the future, with an 18 percent compound annual growth rate expected over the next five years.
With multimillion-dollar media rights bought by the likes of ESPN and Sky to stream e-sports events, it is quickly becoming the next exponential growth driver for the market. However, unlike traditional broadcasting, the competition in this market is not just between mainstream broadcasters but also OTT or over-the-top players and social media giants.
With over 400 million estimated e-sports viewers in 2019, its allure is undeniable. But delivering e-sports globally has its challenges.
It is a new-age, high-tech sport that is followed by young, tech-savvy and demanding viewers. However, too many players from around the world are competing, making it difficult to follow everything in depth.
High-quality snippets and insightful highlights become critical for keeping viewers engaged. There is a need to interact with fellow viewers on social media and other platforms to discuss the game, share opinions and predict results. And viewers could be players themselves and thus may have “real skin in the game” themselves.
These factors contribute to making it a complex challenge:
• Content owners will need to have a lean production model that keeps costs in check. This is on the cusp of change with brands like Adidas and Nike taking interest in gaming stars for sponsorship – the big bucks are coming so early adopters will benefit.
• Multiple cameras, cutaways, reactions, commentary – on the go/real-time and intensive editing. All this needs superior connectivity and new-age broadcast technology that is built on the back of robust digital infrastructure.
• To achieve growth and economies of scale, tapping new markets is the key. A larger, more diverse viewership will bring in higher revenues. Broadcasters need to give viewers a reason to switch from the “traditional” digital platforms that stimulated the growth of this industry.
• Media rights for traditional sports are fairly straightforward because no one owns soccer, cricket or tennis. With e-sports, it’s much more complex since the gaming company owns the content.
A lesson from South Korea
South Korea is one country that has embraced e-sports and made moves to integrate the industry as an intrinsic cultural trend.
In Seoul, there is a dedicated and high-flexibility e-sports stadium, Nexon Arena, hosting multiple games including StarCraft II and League of Legends. A dedicated e-sports channel, OGN, is pioneering the new way e-sports is seen. OGN stemmed from one program following the rise in popularity of StarCraft in South Korea and progressed to a stand-alone channel estimated to spend upwards of US$100 million each year to broadcast and produce live e-sport events.
While the technology for e-sports exists, the infrastructure in other global cities doesn’t yet exist to the scale this fast-growing sport needs. South Korea tops the international table of internet speeds with an average of 26 MBps. High-speed internet is invaluable for gamers – it stops lag and therefore gives them a competitive edge. Additionally, its widespread broadband infrastructure means 90 percent of its population are internet users. Therefore, more people are likely playing.
In South Korea, e-sports has already woven itself into the mainstream and it’s catching up fast in other countries. London premier league club Tottenham Hotspurs will be hosting e-sports at its new stadium this year. Reuters has created an e-sports wire, which provides in-depth text coverage of the e-sports industry.
Use of big data and AI machine learning
E-sports is built for deep data analysis. Using AI machine learning, the industry and the players themselves can track how they play and use the analytics to improve their play, track their competitors and change the gaming experience to something more customized.
And not just improving play. AI can be used to meet the ever-increasing demand for highlights and conversations – ensuring that “best bits” can be pulled together almost instantly and used to engage fans in real time, and specific to their interests with tailored packages.
This also means that technology and analytics will uncover many new pricing models and opportunities for additional revenue streams. For example, team analysis in franchised leagues to ensure there will be a worthwhile return on investment. It will serve as a guide for investors and brands which will evolve into more lucrative deals – not unlike how YouTube evolved over the past few years.
The predicted growth rate indicates that e-sports is only set to get bigger. However, people need us to fill the gaps in the market by expanding the industry and collaborating with new partners.
And while there are challenges ahead, the potential opportunities for the broadcasting industry are vast.
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