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Esports is on the rise.
Image Credit: Nielsen
The world of sports entertainment is changing, and esports is the star player. Market researcher Newzoo forecasts that esports revenue will grow from $906 million in 2018 to $1.7 billion by 2021.
In an esports panel at the National Association of Broadcasters convention in Las Vegas this week, we explored how esports will disrupt the traditional notions of sports broadcasting. Esports broadcasts are evolving into something entirely different and much more interactive than what we’ve seen in the past.
We started at a high level, describing for non-esports fans what it’s like to enjoy a big tournament, and we moved on to the different ways it will impact broadcasting, generate money through a diversity of revenue sources, and draw the attention of the biggest advertisers in the world.
I moderated the session. Our speakers included David Clevinger, senior director of esports and sports product strategy at IBM Watson Media; Matt Edelman, chief commercial officer at Super League Gaming; Frank Ng, CEO, Allied Esports Entertainment; and Joe Lynch, head of broadcasting at Electronic Arts.
We tackled questions like the difficulty of broadcasting a battle royale match, the growth of physical venues for esports, how technology can make esports more interactive, and comparisons to traditional sports, like how much revenue per fan esports generates versus the NBA (Hint: Newzoo says it will be $5.45 per fan per year for esports, compared to more than $50 per fan for the Golden State Warriors.
Here’s an edited transcript of our panel. Disclosure: The organizers of the session paid my way to Las Vegas. Our coverage remains objective.
Above: Esports panel at NAB, right to left: Matt Edelman of Super League Gaming; Joe Lynch of EA; David Clevinger of IBM; Frank Ng of Allied Esports Entertainment
Image Credit: Dean Takahashi
GamesBeat: I’ve been writing about esports for at least a couple of decades, ever since Dennis Fong won a Ferrari in a Quake tournament. In those days everyone asked why anyone would want to watch someone else play a game. What’s the fun in that? Do we have a present-day feeling about why this has taken off? Why have people decided this is a fun thing to do? Twitch has more than 100 million monthly active users now, all watching people play games. We’ll be talking about this in multiple sessions at GamesBeat Summit 2019, our event in Los Angeles on April 23-24.
David Clevinger: The interesting thing about Twitch—I think I read somewhere that the average session on Twitch is an hour and 40 minutes. When I was at AOL doing broadband streaming, we would have killed to get someone to watch for an hour and 40 minutes.
What’s interesting about esports, and competitive gaming overall, is that it’s a different interaction model. The reason why it’s so interesting and why people watch is that you’re not watching for the same sort of spectator value that you get from watching an NBA game or the NFL or cricket or what have you. I can count on one hand the number of times I’ve been on a regulation-size football field in the last 10 years, but I’ve played a lot of esports and played a lot of games.
Depending on the way you watch esports, you’re getting something different out of it. It’s opening up different opportunities. You’re playing with your friends, communicating with your friends. You’re watching a stream rather than going to an event in a venue. It’s a different interaction model around that game than it is around traditional sports, which have a much higher barrier.
Joe Lynch: There’s a related factor to your point, which is that we have a generation of people who’ve been playing these games for their entire lives. They watch people play and they think they can get to that point when they play themselves. If you watch an NFL game, there are very few sane people who believe they can beat Tom Brady, but when you’re home and watching Madden or FIFA, a lot of people think, “I could beat that guy.” If you read Twitter during these events, a lot of people think they could beat pro players.
That relates back to the fantasy of, “That could be me.” I don’t have a shot at playing on an NFL team, but I can play in this league. I can do this.
Frank Ng: Streaming is a global phenomenon. It’s not just Twitch. There are a lot of platforms in Asia. It’s super big in China. The key thing is interaction. Gamers now are used to the interactions that these streaming platforms offer. Interaction, on one hand, you could say it’s engagement, just like playing a game, but it’s more like an addiction. Once people get on, they can hit that like, or make a comment, or send an emote. They can’t stop.
We’re still in the beginning stages of this cycle. A lot of games are not properly set up to take advantage of streaming. But we’ve started to see in the past few years with MOBA games, Clash Royale, things like that, they’ve added these features, and that’s made the game’s life cycle much longer. We can expect more games to come to this market and it will continue to grow.
Matt Edelman: If you’re interested in esports, relatively new to esports, it will help if you think of esports as sports. Don’t think of esports as video games that are completely distinct from a traditional sports experience. As a result, put yourselves in the shoes of a player of a sport, whether or not you think you can go pro. Think about how much you enjoy watching other people play that sport, whether it’s really well or even really horribly. You still enjoy watching, still enjoy the experience of being entertained by people playing the sport that you like to play yourself.
Esports is the same. Gamers enjoy watching other people play the sport that those gamers have chosen to be passionate about, because it’s what they like to play. Every time you wonder why somebody would want to watch esports, why someone would want to engage with an esports team, why a broadcaster should focus on what’s happening in esports, just think about traditional sports. Think about the growth of media rights in traditional sports over the past several decades. Think about all of the things broadcasters and leagues have brought to the table to make consuming traditional sports exciting from a visual standpoint. Esports is in the same place, and it’s going in the same direction.
Above: Newzoo sees live esports viewership growing for some big events.
Image Credit: Newzoo
GamesBeat: There’s a market researcher, Newzoo, that’s studied esports for a while. They estimated in 2018 that the audience for esports was around 380 million people worldwide, if you add up both the enthusiasts and the occasional viewers. They think that will go to 557 million people by 2021. You could say, “No, I don’t believe that, that’s crazy.” But one streamer, a guy named Tyler Blevins, better known as Ninja, has more than 50 million followers across his different channels. He made more than $10 million off that audience last year alone. It’s interesting to add up how large this is, how real it is. The revenues for esports are bigger than things like WWE now. They’re not closing in on the NBA yet, but they’re legitimate sports.
I want to ask a bit more about the broadcast side of things. Joe, if you want to start, how is broadcasting esports different from broadcasting traditional sports?
Lynch: We look at it in a different way than some others at EA. We have our two big competitive games right now, Madden NFL and FIFA. The general public has an understanding of what those games are. We have a base to work from. We don’t have to explain what the game is and how it works.
But still, when it comes to technology and storytelling, there are two completely different worlds. As we were talking about, the reasons people watch, going by all these stats that we’ve looked at—the vast majority of the people who are watching are watching to learn. They want to learn how to get better. Millions of players enjoy these games and they’re watching to learn how to score more, how to run this play, how to do this thing.
As broadcasters and storytellers, we have to spend a lot of time teaching. NFL football games don’t do that. They’re not going to teach someone how to tackle. They’ll do a little to explain the basic rules so you can enjoy the game, but they’re not going to go into the minutiae of how you wrap someone up and tackle them. Those are the things we have to do as storytellers, and that part is really different.
We were just having a conversation earlier about the authenticity of it. As you’re telling the stories, you need people in the community, in these games, to be telling these stories, or it’s going to fall flat. No one’s going to enjoy it, because they know it doesn’t hold water compared to what the community is doing. That’s one side of it.
From the tech side, the signal flow is a mess. The way we’re getting signals out of the game – audio, video, shadow consoles – is by far the biggest difference. We have a lot of cameras. We have studio cameras, POV cameras, all that stuff that regular games have, but then we have all the game signals as well. We have all of that coming through, and that’s the most complicated difference between the two.
Above: The Esports Arena at the Luxor hotel in Las Vegas.
Image Credit: Dean Takahashi
GamesBeat: In this case, too, the streamers are broadcasters. It hasn’t been that easy to be a streamer. You need one system to play a game and another system to stream it. That’s getting fairly complicated for people who are trying to make a living doing this at home.
Clevinger: Yes, there’s a big technology barrier to doing this, but it’s open. You can get the things you need and learn how to run the equipment. The bigger issue for streamers is that they have to do it every single day, for hours every day. If they take a day off and go do something else, they’re losing all that revenue coming in. A lot of people talk about what Ninja makes and what people pay him to do outside things. It’s because if he’s not streaming, he’s losing that money. The financial model is really interesting, and the commitment of time that these streamers have to put in to make it a viable career.
I do think there’s an interesting part of that where you can certainly make a correlation between how difficult it is to set up a box to go and stream—right now you have to have every platform you’re playing on, and then another box running a splitter, something like that. Then you’re sending it out to Twitch or YouTube or Facebook Gaming. There’s an opportunity to make that path much smoother, because the number of people who are streaming a game—regardless of the size of Twitch right now, that’s an increasable audience compared to the number of people that are playing games right now. That’s a much bigger audience. If you think Twitch is big now, and the game streamer audience is influential now, it’s really just getting started. We’re really in the infancy of that. It’s still complicated, but it’s not going to be complicated forever.
Lynch: As a developer, our teams are working on that every day. How do you make those tools easier? How do you press a button in a game and you’re good to go, so you don’t need to go through all of those steps? That’s a process that we’ll get to, but to your point, we haven’t even scratched the surface yet.
Ng: Last year we did a pilot after we launched our arena in Vegas, and we had Ninja there. At that time he was probably at one-third of his current popularity. He had maybe 4 million followers on Twitch. We did a six-hour show with him, and at the end we managed to pull off-peak concurrent viewership, just on his personal channel — we simulcast with our channel and his personal channel — of 680,000 users. After six or seven hours, we had 2.8 million unique viewers, again just from his personal channel.
In that process we also talked to a lot of sponsors. They come to us and say, “Yes, we love Ninja, he has a lot of great eyeballs. Streamers have a lot of great eyeballs.” But they want to structure something that’s more formal, more than just putting a logo on a T-shirt during a stream. That’s the big thing that we as broadcasters and content providers have to figure out. Can we utilize our attractiveness to bring much deeper content that can be consumed by a much bigger audience? That’s what we’re trying to do.
Above: Newzoo’s vision for the esports business of 2021.
Image Credit: Newzoo
GamesBeat: We’re getting into the challenges of broadcasting esports as well. There must be a lot more of those.
Edelman: Another thing that’s unique about this category of sports—if you think about Major League Baseball, Aaron Judge is not broadcasting when he’s playing baseball. You can’t watch the Aaron Judge channel, or the Derek Jeter channel, even though he’s a retired player. That doesn’t exist.
In the streaming world, the choices that viewers have are almost infinite. There are viewers who would be just as excited, in some cases, to watch somebody they know, a friend of theirs, streaming gameplay, as they would be to watch a professional player in a professional match, and as they would be to watch a retired player who’s now a professional streamer and influencer. The importance of knowing how to connect with a viewer and capture their attention – and as Joe was saying, to convey a narrative that keeps their interest, whether it’s through a significant event like what Frank did with Ninja or grassroots events like ours that are happening in 20, 30, 40 communities around the country simultaneously in a given week – the storytelling is very new.
None of us have figured it out, other than knowing that you can get an audience when you have a great player playing and you have a publisher or a league presenting a professional match. We know you can get an audience for that moment. But knowing how you can get that same viewer the next day, the next week, with all the choices they have, is still a very complex ecosystem.
Lynch: To Frank’s point, airtime is a big difference between traditional sports and esports. We do anywhere from six to 10 to 12 hours a day for three to four hours a time, and then rinse and repeat a couple of weeks later. An NFL game is three hours, plus some pregame. You don’t have those kind of on-air hours. As you move from traditional sports to producing esports, when it comes to crews and TVs and directors and people you want to fill in your staff with, that’s a big learning curve, understanding what we do versus what traditional sports do.
Edelman: On that note, on airtime, that really speaks to volume, which goes back to what I was saying before about almost infinite choice. Over the course of the year, all the events that we run, we capture hundreds of thousands of hours of gameplay inside our platform. We’re running events based on other people’s intellectual property. We’re very fortunate that game publishers and developers have allowed us to create these programs with their IP, whether it’s League of Legends from Riot Games or Clash Royale from Supercell or Minecraft from Microsoft or Fortnite events in partnership with Epic Games and their sponsors.
Whatever it is, we’re accumulating an extraordinary amount of content. More content than any audience could possibly consume. It goes back to how you extract the right amount of value, how you figure out what the audience is going to be most interested in. How do you create the drama and the story that’s going to drive viewership, drive engagement, drive chat on platforms where chat is a key component of the experience? Twitch is the most noteworthy there.
Even the conversation about the speed at which things happen—maybe you have hundreds of thousands of hours of gameplay to draw from, but highlights happen in a matter of seconds, with almost no warning. It’s a very complicated broadcast and production experience.
GamesBeat: I spoke with a Los Angeles team, Gen.G, about the infrastructure they had to build to record video of a reality TV-like show for their League of Legends team. They needed a whole team of video editors just to be able to follow them at their house, watch them play, and take care of editing what was good to go on live and what had to be hidden. They’re in Los Angeles, so they had plenty of editors, but they couldn’t find people who knew about esports, and what content was important to the audience or not. That’s a huge human capital challenge right now, finding video people who know something about esports.
Clevinger: I would add to that, which is even that if you were able to find enough editors who know about esports, you’ll still never be able to churn out content as fast as you’d like to. It’s happening too quickly. Whether you’re talking about League of Legends or Madden or a battle royale type of situation, where you have players scattered over a map that’s miles wide and miles long, knowing where to focus and knowing what to extract becomes a really difficult problem.
Then you layer on top of that the fact that people aren’t just interested in players, but maybe I’m only interested in a character. If I’m watching Overwatch League, maybe I’m only interested in watching whoever’s playing Reaper. That brings on another layer of complexity. It’s not just about teams. It’s about the individual game characters.