Implications and Impacts of eSports on Business and Society: Emerging Research and Opportunities (Advances in E-business Research) 1799815382, 9781799815389

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Implications and Impacts of eSports on Business and Society: Emerging Research and Opportunities David J. Finch Mount Royal University, Canada Norm O’Reilly University of Guelph, Canada Gashaw Abeza Towson University, USA Brad Clark Mount Royal University, Canada David Legg Mount Royal University, Canada

A volume in the Advances in E-Business Research (AEBR) Book Series

Published in the United States of America by IGI Global Business Science Reference (an imprint of IGI Global) 701 E. Chocolate Avenue Hershey PA, USA 17033 Tel: 717-533-8845 Fax: 717-533-8661 E-mail: [email protected] Web site: http://www.igi-global.com Copyright © 2020 by IGI Global. All rights reserved. No part of this publication may be reproduced, stored or distributed in any form or by any means, electronic or mechanical, including photocopying, without written permission from the publisher. Product or company names used in this set are for identification purposes only. Inclusion of the names of the products or companies does not indicate a claim of ownership by IGI Global of the trademark or registered trademark.

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Names: Finch, David J., 1967- author. Title: Implications and impacts of eSports on business and society : emerging research and opportunities / by David J. Finch, Norm O’Reilly, Gashaw Abeza, Brad Clark, and David Legg. Description: Hershey, PA : Business Science Reference, 2020. | Includes bibliographical references and index. | Summary: “This book explores the implications of eSports and its future. It also examines topics ranging from the eSports marketplace to the direct and indirect impact on business and society”-- Provided by publisher. Identifiers: LCCN 2019030371 (print) | LCCN 2019030372 (ebook) | ISBN 9781799815389 (hardcover) | ISBN 9781799815396 (paperback) | ISBN 9781799815402 (ebook) Subjects: LCSH: eSports (Contests) | Video games--Competitions--Economic aspects. | Video games--Competitions--Social aspects. Classification: LCC GV1469.34.E86 F56 2020 (print) | LCC GV1469.34.E86 (ebook) | DDC 794.8--dc23 LC record available at https://lccn.loc.gov/2019030371 LC ebook record available at https://lccn.loc.gov/2019030372 This book is published in the IGI Global book series Advances in E-Business Research (AEBR) (ISSN: 1935-2700; eISSN: 1935-2719) British Cataloguing in Publication Data A Cataloguing in Publication record for this book is available from the British Library. All work contributed to this book is new, previously-unpublished material. The views expressed in this book are those of the authors, but not necessarily of the publisher. For electronic access to this publication, please contact: [email protected].

Advances in E-Business Research (AEBR) Book Series ISSN:1935-2700 EISSN:1935-2719 Editor-in-Chief: In Lee, Western Illinois University, USA Mission Technology has played a vital role in the emergence of e-business and its applications incorporate strategies. These processes have aided in the use of electronic transactions via telecommunications networks for collaborating with business partners, buying and selling of goods and services, and customer service.  Research in this field continues to develop into a wide range of topics, including marketing, psychology, information systems, accounting, economics, and computer science.  The Advances in E-Business Research (AEBR) Book Series provides multidisciplinary references for researchers and practitioners in this area. Instructors, researchers, and professionals interested in the most up-to-date research on the concepts, issues, applications, and trends in the e-business field will find this collection, or individual books, extremely useful. This collection contains the highest quality academic books that advance understanding of e-business and addresses the challenges faced by researchers and practitioners. Coverage • • • • • • • • • •

E-business strategies Web Service-Based Business Systems E-Services B2B e-marketplaces Virtual organization Trends in e-business models and technologies Economics of e-business Electronic Supply Chain Management E-CRM Online consumer behavior

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The Advances in E-Business Research (AEBR) Book Series (ISSN 1935-2700) is published by IGI Global, 701 E. Chocolate Avenue, Hershey, PA 17033-1240, USA, www.igi-global.com. This series is composed of titles available for purchase individually; each title is edited to be contextually exclusive from any other title within the series. For pricing and ordering information please visit http://www.igi-global.com/book-series/advances-business-research/37144. Postmaster: Send all address changes to above address. ©© 2020 IGI Global. All rights, including translation in other languages reserved by the publisher. No part of this series may be reproduced or used in any form or by any means – graphics, electronic, or mechanical, including photocopying, recording, taping, or information and retrieval systems – without written permission from the publisher, except for non commercial, educational use, including classroom teaching purposes. The views expressed in this series are those of the authors, but not necessarily of IGI Global.

Titles in this Series

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Tools and Techniques for Implementing International E-Trading Tactics for Competitive Advantage Yurdagül Meral (İstanbul Medipol University, Turkey) Business Science Reference • ©2020 • 395pp • H/C (ISBN: 9781799800354) • US $225.00 Handbook of Research on Strategic Fit and Design in Business Ecosystems Umit Hacioglu (Istanbul Medipol University, Turkey) Business Science Reference • ©2020 • 775pp • H/C (ISBN: 9781799811251) • US $295.00 Business Transformations in the Era of Digitalization Karim Mezghani (Al Imam Mohammad Ibn Saud Islamic University, Saudi Arabia & University of Sfax, Tunisia) and Wassim Aloulou (Al Imam Mohammad Ibn Saud Islamic University, Saudi Arabia & University of Sfax, Tunisia) Business Science Reference • ©2019 • 360pp • H/C (ISBN: 9781522572626) • US $215.00 E-Manufacturing and E-Service Strategies in Contemporary Organizations Norman Gwangwava (Botswana International University of Science and Technology, Botswana) and Michael Mutingi (Namibia University of Science and Technology, Namibia) Business Science Reference • ©2018 • 366pp • H/C (ISBN: 9781522536284) • US $205.00 Multi-Sided Platforms (MSPs) and Sharing Strategies in the Digital Economy Emerging Research and Opportunities Sergey Yablonsky (St. Petersburg University, Russia) Business Science Reference • ©2018 • 192pp • H/C (ISBN: 9781522554578) • US $165.00 Crowdfunding and Sustainable Urban Development in Emerging Economies Umar G. Benna (Ahmadu Bello University, Nigeria) and Abubakar U. Benna (Durham University, UK) Business Science Reference • ©2018 • 343pp • H/C (ISBN: 9781522539520) • US $205.00

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Table of Contents

Foreword.............................................................................................................. vii Preface................................................................................................................... ix Acknowledgment................................................................................................ xvi Chapter 1 eSports Today: Its Origins and Ecosystem.............................................................1 Chapter 2 eSports Stakeholders: Important Groups and Relationships.................................28 Chapter 3 The eSports Economy...........................................................................................44 Chapter 4 eSports Media.......................................................................................................66 Chapter 5 eSports Sponsorship: Current Reality and Future Potential.................................91 Chapter 6 eSports Gender, Race and Culture......................................................................107 Chapter 7 eSports Health and Wellness...............................................................................131 Chapter 8 The Future of eSports: Future Research Directions............................................149



Glossary............................................................................................................ clxv Related Readings............................................................................................... 171 About the Authors............................................................................................. 182 Index................................................................................................................... 184

vii

Foreword

Over the past 30 years, I have had the good fortune to work in and grow with the gaming industry from its infancy to the ‘glory years’ we are experiencing today with hundreds of millions of players globally, thousands of games, dozens of platforms and thousands of professionals. It is a growth trajectory that I am proud to have contributed to in my career and plan to continue to further into the future. But that is not the point of my foreword. Here I’m writing to acknowledge the value of this book, written by 5 academics from Canada and the United States on an off-shoot of the gaming industry – eSports – that is early in its growth curve but that is on a tremendous trajectory for a great future. When I first joined this industry in 1990, the idea of a professional sportlike aspect to gaming where players would be celebrities, where they’d have huge sponsorship deals, where the NBA would build a league, and where prize money would be in the millions, was largely a dream - but if you knew where to look, clearly a movement was underway even in these early days. I have had the support and encouragement from literally thousands of associates, bosses, mentors, partners in industry throughout my career (GT Interactive, Atari, Elephant Entertainment, Virgin Gaming, and now WorldGaming), family and friends, all who have emboldened me to push the boundaries and envelopes for gaming, from the physical to the digital, from device dependent to online and now cloud-based, from single player experiences to communities of millions of people playing games concurrently and socially. I say often that gaming is changing the world; it has changed how people engage with one another, what it means to be ‘social’, how stories are told, how entertainment is consumed, the cultural impact it has had as a media and doing so on a global scale, the people and personas emerging as our new heroes and celebrities.

Foreword

As the field formalizes, I am so pleased to see a book for students and young professionals who want to join the field. More importantly, it is great to see quality formalized content to help these people learn the key skills. I personally believe in universities and learning and believe strongly that there is a role for eSports in the curriculum of post-secondary institutions and in the collegiate space. In fact, due to our company’s college division (Collegiate StarLeague) and our leadership position in the creation and operations of collegiate eSports leagues in the US and Canada with over 2000 schools (and growing) participating, I speak often at major universities, such as the Wharton School of Business at the University of Pennsylvania, and recently addressing the White House Initiative for Historically Black Colleges and Universities (HBCU), to urge more broad-based support from colleges and curricula for building skills and knowledge for establishing careers in the business of eSports. Administrations and athletic departments at many colleges and universities are now ‘eyes wide open’, seeing the huge potential eSports can bring their schools to attract the best and the brightest in this new and very contemporary set of dynamics. The current stature of eSports, which is still so early in its development, is blowing the minds of the traditional mainstream yet forms a very essential foundation for the new mainstream: digital at birth (they know nothing but), eschewing convention and status quo, unwavering in their desire for transparency and authenticity, smart, savvy, social in ways we are only beginning to comprehend, global in thought and altruism. In sum, for me, it is exciting to see eSports coming up and being part of the curriculums of colleges and universities around North America, and the world. I’m looking forward to seeing this book and e-book well used and informing learning for our exciting industry. Sincerely, Wim Stocks CEO of WorldGaming, USA & Collegiate StarLeague, USA October 2019

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Preface

THE eSPORTS PHENOMENON In the last ten years, driven by technological advancements such as social networking and video streaming, the global gaming market has grown exponentially and now exceeds two billion participants (Merwin, Sugiyama, Mubayi, Hari & Terry, 2018). Within this larger market is competitive electronic sports (eSports), an organized competition in which individuals or teams compete (in leagues or tournaments) for money or prizes and open to spectators (in person and/or online). Today, there an estimated 110 million eSports participants (Newzoo, 2018). As scholars and educators in business, media studies, and sport management, we bring a unique lens to the study of the eSports phenomenon. This includes extensive experience as researchers and practitioners in fields such as sport marketing, finance, sponsorship, traditional media, social media and adaptive sport. In exploring the research in this fast-changing field, we noted that the field is highly fragmented, and there is a lack of comprehensive educational material on the broader implications of eSports on business and society. The field did not even have a commonly accepted and consistent terminology in terms of the most basic spelling of the topic under study (e.g. e-sport vs. eSports vs. esports). We embarked on a deep dive into the eSports industry to synthesize this rich but fragmented work into a single book that explores its historical roots, growing opportunities and emerging challenges. The industry reflects a diverse and interdependent ecosystem with 15 different stakeholders and components described as follows:

Preface

•

•

•

• • •

•

•

x

Fans as Participants: Unlike traditional sports, the casual fans and professional players in eSports compete uniquely on the same platform. In eSports, an individual can be both a fan and a participant. This scenario creates a unique social bond between casual gamers and professionals. Genres: Alike the diversity of traditional sports, eSports takes on many forms including strategy games, multiplayer online battle arena, Battle Royale, role-playing, fighting, racing, collectible card games and puzzles. we focus on four main genres: Real-Time Strategy (RTS), First-Person Shooter (FPS), Simulated Professional Sports (SPS), and Fighting Games. Publishers: The most powerful and influential actor in the eSports ecosystem is a game publisher. A game publisher is responsible for all aspects associated with the development, production, marketing and sales of a game, and often the production and dissemination of media content as well. Leagues: Leagues are either established or sanctioned by publishers to promote specific games. Examples include the League of Legends (LoL) or the Overwatch League (OWL). Investor: The significant growth of eSports has attracted a diverse array of investors including the NBA, Manchester United of the English Premier League and motor racing team McLaren. Teams: eSports teams are distinct from traditional sport teams because a single “team” may have franchises in different eSports. For example, Cloud 9 owns franchises competing in eleven eSports leagues. This scope would be equivalent to the New York Yankees competing in nine leagues ranging from MLB to the UFC and Formula 1. Facilities: Due to technical demands that influence the outcome of competition, dedicated eSports facilities are being built at a rapid rate with existing arenas including the facilitation of livestreaming and broadcasting. Events: Events and tournaments are central to competitive gaming and eSports. Today, tournaments happen at both a local and global level with prize money, in some cases, exceeding that of many major traditional sport tournaments.

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•

• •

•

• •

Media and Content: eSports is primarily viewed online through channels such as Twitch, where the audience can interact with spectators and participants in real-time. This unique social content is what some analysts view as offering the greatest potential for eSports monetization. Merchandise: As the eSports ecosystem grows, leagues and teams are mimicking revenue models similar to traditional professional sports. Associations: The eSports business model differs from traditional sports, as games are the exclusive property of publishers. This has led to a lack of an independent and recognized global eSports governing body to manage compliance, rules and regulations. This can be a barrier for the recognition of eSports by traditional sport governing bodies. Education: The education system is also addressing the growth of eSports. As one example, the National Association of Collegiate Esports (NACE) was established to coordinate varsity eSports across 130 different universities in the United States. At the same time, The National Collegiate Athletic Association has been reluctant to sanction video game competition. Networks: The growth of networked gaming is driven by a dramatic advancement in network capacity, enabling not only network gaming, but streaming services, such as Twitch. Hardware: Similar to an automotive manufacturer in Formula One, hardware can provide a significant competitive advantage in eSports. There are two major categories: the gaming platform and peripherals.

As we examine these 15 stakeholders and components, it became clear to us that the eSports industry needs further examination from a perspective of different factors such as financial drivers, socio-cultural implications and the impact on population health. While already a significant industry, as revenue streams expand through ticket sales, media rights, sponsorship and merchandising, some analysts expect the market to once again almost double to $1.8B by 2022 (Gray, 2018). The growth of the industry, however, may not be without challenges with a perceived growing toxic culture tied to high profile incidents of misogyny and racism. The lack of an independent and recognized global eSports governing body to manage compliance, rules and regulations could further complicate this growth not to mention the integration of eSport into major global sport events such as the Olympic and Paralympic Games (Elsam, 2018). The toxic culture is associated with violence, sexist depictions of female characters, misogyny, xi

Preface

racism and homophobia. Even though women and racialized groups make up a significant proportion of the gaming public, eSports viewership among those groups is proportionally much lower. Concerns are also being raised about the impact of eSports on the physical and mental health of participants. As players dedicate hours to improving their skills, their real-life health can suffer. Whether it is from sitting for an extended duration with poor posture, increased stress after a crucial loss, or a lack of consistent, restful sleep, the adverse effects of gaming can severely worsen a player’s overall health. In addition to these broader social implications, we also recognize and ponder the future of eSports within the broader sectors of sport and technology including trends related to 5G, virtual reality, big data, blockchain, betting and artificial reality among others.

ORGANIZATION OF THE BOOK To provide an overview of the eSports industry and address its future trends and challenges, the book is organized into eight chapters. Each chapter explores diverse themes associated with the implications and impacts of eSports on business and society. Below is a summary of each chapter and the questions it considers.

eSports Today: Its Origins and Ecosystem This first chapter explores the history and growth of eSports. This includes mapping the major components of the business ecosystem. Each following chapter goes into depth on the key themes highlighted in chapter 1.

eSports Stakeholders This chapter does a ‘deep dive’ into each of the stakeholder groups across the eSports ecosystem. This includes publishers, leagues, investors, teams, players and player associations. The questions it considers include: 1. Who are the major eSports stakeholders? 2. What is the power relationship between these stakeholders? How may this evolve in the future? 3. How do these stakeholders and the power structures differ from traditional sports? xii

Preface

The eSports Economy The eSport industry has grown exponentially over the past few years. For the first time, the global eSport economy exceeds the $1B dollar mark in 2019. The questions this chapter considers include: 1. How large is the eSports economy and what is its potential? 2. What are the different revenue streams? 3. How does the eSports economy vary from the traditional sports economy?

eSports Media and Content Driven by streaming platforms, such as Twitch and YouTube, analysts expect eSports content to bring with it growing revenue opportunities. This chapter explores the following questions: 1. What is the current and future landscape of eSports media? 2. How is eSports media and content monetized? 3. What is the financial relationship between the different eSports stakeholders including content producers, publishers, leagues, teams and players?

eSports Sponsorship and Marketing Potential With eSports shifting to the mainstream, corporate sponsors and partners view the industry as a new venue to reach audiences. This chapter considers the following questions: 1. 2. 3. 4.

Who are the major eSports sponsors today? What is the role of endemic vs. non-endemic sponsors in eSports? What is driving the eSports sponsorship? What is the crossover potential with traditional sports?

eSports Gender, Accessibility, Race, and Culture Gaming was traditionally perceived as a domain of young males but over the past decade there has been a shift, with increased gender balance and the age of the average gamer increasing. However, eSports, as a whole, still remains

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the domain of younger males, with less than 30% of professional players being female (Zampolini, 2018). This chapter considers the following questions: 1. What is the demographic profile of eSports fans, gamers and athletes today? 2. How do demographics, including race and gender, influence personas of streamers/players/casters on social media? 3. What efforts are being made to address toxic online behavior? 4. As an industry, is eSports concerned about the need to be representative?

eSports Health and Wellness Questions associated with the link between gaming and health and wellness continue. This chapter reflects on research surrounding the broad impacts of gaming on both physical and mental health. This includes exploring both the negative and positive dimensions of gaming. Questions this chapter explores include: 1. How does engaging in competitive eSports impact health and wellness? 2. What are the short- and long-term implications for gaming on a person’s health and wellness? 3. How can the health and wellness benefits from eSports be supported and enhanced and the negative impact minimized?

The Future of eSports Predicting the future is difficult, and arguably, an impossible task. The final chapter builds on the past and present and explores macro-level trends and how the trends may impact the future of eSports. This includes issues relating to data privacy, blockchain, artificial intelligence, virtual reality, 5G wireless, and major policy and regulatory issues that may challenge eSports. Together, these trends offer a framework to map out how eSports may impact both business and society.

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SUMMARY This book is designed for those within and new to the eSports industry. It is likely one of the most debated genres within, and while some may ignore it, doing so would be a disservice to those who participate and work in the broader sports community. Understanding eSport is important given its size, reach and potential growth, particularly to build upon its possible strengths and minimize the potential negatives. We recognize that we entered into this deep dive not as experts but as curious and enthusiastic observers. We want to acknowledge and thank all of the eSports players and aficionados who helped us on our journey.

REFERENCES Elsam, S. (2018, April 19). Esports medal inclusion for 2022 Asian games put on hold. The eSports Observer. Retrieved from https://esportsobserver. com/esports-asian-games-medals-on-hold/ Gray, A. (2018, July). The explosive growth of eSports. World Economic Forum. Retrieved from https://www.weforum.org/agenda/authors/alex-gray Merwin, C. D., Sugiyama, M., Mubayi, P., Hari, T., Terry, H. P., & Duval, A. (2018, October 12). The world of games eSports: From wild west to mainstream. Goldman Sachs. Retrieved from https://www.goldmansachs. com/insights/pages/infographics/e-sports/report.pdf Newzoo. (2018). Global games market report. Retrieved from https://newzoo. com/solutions/standard/market-forecasts/global-games-market-report/ Zampolini, P. (2018, January 26). Where are the women in eSports? CMF Trends. Retrieved from https://trends.cmf-fmc.ca/where-are-the-women-inesports/

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Acknowledgment

The authors would like to thank the funding support provided by Mount Royal University’s Institute for Innovation and Entrepreneurship. In addition, we would like to recognize the important contributions of several researchers that supported this project. This includes Erin Griswold, Anthony Mikkelson, Alexandra Swiston, Justin MacLaren, and Katelyn White from Mount Royal University. Moreover, we’d like to thank researchers Khalid Khwakhuzhai and Ryan Devlin from the University of Guelph for their significant contributions to this book.

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Chapter 1

eSports Today:

Its Origins and Ecosystem

ABSTRACT Today, gaming, from consoles to PCs to mobile devices, is a global phenomenon with over two billion active participants. In the past two-decades, a subsector of gaming has emerged. eSports has transformed gaming into a networked forum where participants compete with others from around the world. This first chapter provides an overview of the major eSports issues and themes. It will include mapping the history of eSports and the major components of its business ecosystem. Each subsequent chapter will do a deep dive into core themes within eSports and their implications on business and society.

INTRODUCTION Driven by technological advancements, social networking and video streaming, the global gaming market today exceeds two billion participants or 30% of the world’s total population (Merwin, Sugiyama, Mubayi, Hari & Terry, 2018). For perspective, Red Dead Redemption 2 generated $725M in sales in its first three days. If Red Dead Redemption 2 was a movie, it would rank as the third largest box office opening in history; larger than any Star Wars or Harry Potter movie (Box Office Mojo, 2019). In fact, as per Figure 1, three of the top five “opening weekends” in history are held by games, not movies. DOI: 10.4018/978-1-7998-1538-9.ch001 Copyright © 2020, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

eSports Today

Figure 1. Worldwide opening weekend revenue (in millions USD)

While eSports and gaming are often used interchangeably, competitive electronic sports (eSports) is really a subset of gaming, where individuals or teams compete in leagues or tournaments for money or prizes. Today, eSports represents only 5% of the overall gaming market, but it’s the untapped upside of it that appears to have created the incredible hype. Thus to better position and understand this industry, this book will explore the past, present and future of eSports. This first chapter provides a brief overview of the major eSports issues and themes and reflects on whether eSports is even a sport. The first chapter then maps out the history of eSports and its ecosystem, including market potential, disruption to current business and issues related to race, gender, health and wellness. Each subsequent chapter then addresses specific themes introduced in this first chapter.

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eSports Today

Figure 2. Esports addressable market

BACKGROUND The “Sport” in Esports “It’s not a sport — it’s a competition. Chess is a competition. Checkers is a competition. Mostly, I’m interested in doing real sports.” John Skipper, Former ESPN President (Chmielewski, 2014). Skipper made the above comment at a conference in 2014 following Amazon’s $1B acquisition of Twitch, a streaming platform specializing in eSports. The “real sports” quip followed him for the rest of this tenure at ESPN, but he was not alone in challenging whether competitive gaming meets the criteria of being a ‘real’ sport. The European Sport Charter defines “sport” as all forms of physical activity. This includes those activities that focus on physical fitness, mental 3

eSports Today

Table 1. GAISF sport federation membership Sport Associations

Members

Association of Summer Olympic International Federations

Archery, Athletics, Badminton, Baseball/Softball, Basketball, Boxing (amateur), Canoeing, Cycling, Equestrian, Fencing, Soccer, Golf, Gymnastics, Handball (team), Field Hockey, Judo, Karate, Modern pentathlon, Roller sports/Skateboarding, Rowing, Rugby union, Sailing, Shooting, Sports climbing, Surfing, Table tennis, Taekwondo, Tennis, Triathlon, Volleyball/ Beach volleyball, Weightlifting, Wrestling

Association of International Olympic Winter Sports Federations

Biathlon, Bobsleigh & Skeleton, Curling, Ice Hockey, Ice Skating, Luge, Skiing

Association of IOC Recognized International Sports Federations

Air Sports, American Football, Automobile, Bandy, Baseball-Softball, Basque Pelota, Billiards Sports, Boules Sports, Bowling, Bridge, Cheerleading, Chess, Climbing Mountaineering, Cricket, Dance Sport, Floorball, Flying Disc, Ice stock Sport, Karate, Korfball, Lacrosse, Life Saving, Motorcycling, Muay Thai, Netball, Orienteering, Polo, Powerboating, Racquetball, Roller Sports, Sambo, Ski Mountaineering, Sport Climbing, Squash, Sumo, Surfing, Tug of War, Underwater, University Sports, Waterski-Wakeboard, Wushu.

Alliance of Independent Recognized Members of Sport

Aïkido, Bodybuilding, Casting, Fléchettes, Dames, Bateau-dragon, Fistball, Go, Eisstock, Ju-jitsu, Kendō, Kick-boxing, Lacrosse, Minigolf, Force athlétique, Sambo, Savate, Sepak takraw, Course de chiens de traîneaux, Soft tennis, Pêche sportive, Bras de fer

well-being, support social relationships or contribute to results in competition regardless of level (Council of Europe, n.d.). The International Olympic Committee (IOC) and the Global Association of International Sports Federations (GAISF), meanwhile, defer their definitions of sport to the major sport specific associations they represent. GAISF recognizes a diverse array of almost 100 sports including physical sports (e.g. rugby), motorized sports (e.g. powerboats), mind sports (e.g. chess), coordination sports (e.g. billiards) and animal-supported sports (e.g. equestrianism). See Table 1 for a full list of GAISF sport federation membership. Thus, based on the European Sport Charter and GAISF, eSports would appear to meet these criteria. Others, such as Witkowskai (2012), meanwhile, adopt a much narrower definition of sport arguing that a “sport” must possess four attributes: 1. 2. 3. 4.

Is physical Has accepted rules Is competitive Has a global governing body

The proposition that sport incorporates physicality is further supported in the literature (Coakley, 2008; Eitzen & Sage, 2009) but the definition of 4

eSports Today

‘physicality’ is also highly subjective. For example, both auto racing and equestrian events are recognized as sports because body movement influences the outcome of the competition (Butryn, 2001; Gumbrecht, 2006). Therefore, the question of whether eSports is a sport remains an open and perhaps endless debate. As legendary sport agent, Leigh Steinberg (2018) concluded: “What qualifies as a true sport may be the grist for endless arguments, and the only certainty may be in the eye of the beholder.”

What Is eSports? In 1997, internet entrepreneur, Angel Munoz, established the Cyberathlete Professional League, which was the first recorded use of sport terminology in a competitive gaming context. From this point on, the term eSports evolved and continues to be widely debated. Table 2 provides a timeline for the evolving use of sport terminology in a competitive gaming context. For consistency, eSports is defined in this book as competitive gaming that meets the following criteria: 1. Is organized competition in leagues or tournaments 2. Is competition that awards titles and/or prizing 3. Is competition open to spectators (in person and/or online) This book therefore excludes unstructured casual gaming and based on these criteria, it is estimated that there are 110 million eSport competitors today, compared to over two billion gamers (Newzoo, 2018).

THE ESPORTS ECOSYSTEM While unstructured casual gaming is not the focus for this book, the explosive growth of eSports is clearly rooted in the gaming ecosystem. Deloitte (2015) defines a business ecosystem as bringing: … together multiple players of different types and sizes in order to create, scale, and serve markets in ways that are beyond the capacity of any single organization—or even any traditional industry. Their diversity—and their collective ability to learn, adapt, and, crucially, innovate together—are key determinants of their longer-term success.

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eSports Today

Table 2. An evolving definition of eSports Definition

Focus

Source

Focus on competition and information technologies

Cyberathlete Professional League (2000: n.p.)

“ [eSports] is an area of sport activities in which people develop and train mental or physical abilities in the use of information and communication technologies.”

Focus on information technologies

Wagner (2006: 3)

“E-sports commonly refer to an organized and competitive approach to playing computer games.”

Focus on organized competition

Witkowski (2012: 350)

Focus on competition and information technologies

Borowy & Jin (2013: 2254)

Focus on competition, organization, goals

Newzoo (2016: 4)

Focus on competition and organization

Jenny et al. (2017: 4)

“a form of sports where the primary aspects of the sport are facilitated by electronic systems; the input of players and teams as well as the output of the eSports system are mediated by human-computer interfaces.”

Focus on information technologies

Hamari & Sjöblom (2017: 213)

“Electronic sports commonly known as e-sports, is in its simplest terms the phrase used to describe the playing of video games competitively”

Focus on competition

Olympic Council of Asia (2018: n.p.)

“Competitive “eSports” could be considered as a sporting activity, and the players involved prepare and train with an intensity which may be comparable to athletes in traditional sports.”

Focus on the athlete

International Olympic Committee (2017: n.p.)

“the activity of playing computer games against other people on the internet, often for money, and often watched by other people using the internet, sometimes at special organized events” “an individual computer game that is played against other people on the Internet”

Focus on the combination of competition and information technology

Cambridge Dictionary (2019; n.p.)

“A multiplayer video game played competitively for spectators, typically by professional gamers.”

Focus on professional competition

Oxford Dictionary (2019; n.p.)

“professional-level competitive gaming in an organized format (tournament or league) with a specific goal/prize, such as winning a championship title or prize money”

Focus on professional competition, organization, goals

Newzoo (2019: 7)

“Angel Munoz, formulated the term cyberathlete to convey his vision of a new breed of athletes that compete in computer generated game arenas”

“competitive player-versus-player digital game play” “Competitive gaming in an organized format; an event or league, organized by a third party, with a specific goal (i.e. winning a tournament or prize money), with a clear distinction between players and teams who are competing against each other for a chance to reach that goal.” “organized video game competitions.”

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This principle of an interdependent ecosystem is important, as it recognizes that the health of the overall ecosystem is dependent on the alignment and synchronization among its components. The eSports ecosystem is rooted in the overall gaming ecosystem that has created, scaled and grew the gaming sector over 50 years. Figure 3 maps out the evolution of eSports from the 1970s until today. Console gaming emerged in the 1970s with the commercial release of the Atari Video Computer System in 1977. This console sold 350,000 units in its first year and introduced ROM game cartridges developed by third-party developers such as Activision (Fulton, 2008). In 1980, Atari hosted the First National Space Invaders Competition in New York, attracting over 10,000 competitors (Borowy, 2013). Concurrently, gaming arcades grew enabling head-to-head competitions in games such as Street Fighter. Both tournaments and arcades in the 1980s introduced the important role of community and social gaming as a driver for both participants and fans. During the 1990s, with the release of Myst (1993) and StarCraft (1997), personal computer (PC) gaming expanded with the introduction of networked gaming (Borowy, 2012). The earliest form of networked gaming was ‘LAN parties’, where gamers met in single location to play on a network (Datapath, 2017). With the advent of the internet, network gaming expanded to allow Figure 3. The growth of gaming

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players in different geographic locations to play head-to-head. For the first time, removing geography from competition enabled the best to compete against the best. The 1997 Red Annihilation Quake Tournament in Atlanta is one of the first events to fly finalist to a single location for a championship. This event, which offered a Ferrari as a first prize, is considered by many, to be the launch of professional eSports (Baker, 2016). By 2004, Major League Gaming, the publisher of Halo, Counterstrike and StarCraft, hosted professional tournaments with prizes valued over $200,000, while broadcasting on its own network, MLG.tv (Fantastic, 2018). A decade later, Dota 2 International’s total prize pool was $25.5M and in 2019, Fortnite’s prize money was $100M, including $30M for the World Cup Finals (Epic Games, 2018). As per Figure 4, eSports prize money today exceeds the total prize pool of some of the largest traditional sporting tournaments in the world. To examine the components of the eSports ecosystem, this book adapts the Foster, O’Reilly and Dávila (2016) sport ecosystem for eSports. In Figure 5, the eSports ecosystem is composed of 15 interdependent components from publishers to leagues to media and content. The next section provides an overview of each component within the ecosystem. Figure 4. 2018 sport total prize pool (in millions USD)

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Figure 5. Esports ecosystem

The Fan/ Participant What perhaps makes eSports unique, is that casual fans and professionals compete on the same platform. Figure 6 and 7 provide a sense of the ratio between participants and viewers across major traditional sports and eSports. These charts measure the viewership of the largest event (e.g. Super Bowl) and highlight the contrast between traditional sport and eSports, where participants far exceed viewers. For example, for every single Fortnite Keemstar Tournament viewer, there are 28 people who play Fortnite (a ratio of 1 to 28). Similarly, for every single League of Legends League Champion Series viewer, there are four League of Legends players (a ratio of 1 to 4). In contrast, for every single person who watches the Stanley Cup finals in Canada, .03 people play organized hockey (a ratio of 1 to .03). Golf, meanwhile, is the closest to compare among the traditional sports with every person who watches the Masters, having three people who play (a ratio of 1 to 3).

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Figure 6. Dual role comparison

Figure 7. Ratios of participants to viewers

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Figure 8. Share of worldwide market revenue by region (2019)

The other unique dynamic of eSports fans and participants is the global scope with the United States, South Korea, China and Germany being the top four ranked countries in the world (Ballhaus, Weyßer, Wilke, Luchterhand, Prümm & Sagemüller, 2017). That said, ticket sales for eSports competitions have a European focus comprising 39% from Europe and only 28% from the United States (Statista, 2019). Figure 8 breaks down the 2019 global revenue by region. •

Genres: Similar to the diversity of traditional sports represented by the almost one hundred current GAISF members, eSports takes many forms including strategy games, multiplayer online battle arena, Battle Royale, role-playing games, fighting games, racing, sports, collectible card games and puzzle games. This book, however, focuses on four main genres. ◦◦ Real-Time Strategy (RTS). In RTS, the objective is for gamers to control their individual player from an aerial perspective (birds eye view) (Pizzo & Funk, 2017), while working with their teammates to defeat the opposing team by destroying units/bases. Leading 11

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◦◦

◦◦

◦◦

games in this genre include League of Legends or StarCraft (Pizzo, et al., 2017). First-Person Shooter (FPS). These games focus on gun or other weapon-based combat in a first-person perspective. Leading games in this genre include Halo, Counter Strike Go and Dota 2 (Pizzo, Baker, Na, Lee, Kim & Funk, 2018). Simulated Professional Sports (SPS). This includes virtual versions of professional sports leagues. John Madden Football by EA Sport was the first SPS game introduced in 1988 (IMDb, n.d.). This further expanded through licensing agreements with other professional sport entities including the PGA (1990), NHL (1991), FIFA (1993), NBA (1994), Major League Baseball (1996), NASCAR (1997), F1 (2000) and the UFC (2014). Today, RTS and FPS are the dominant genres of gaming. For example, of the top 15 monetizing PC and console eSports titles, 14 are RTS and FPS and one is SPS (FIFA) (Merwin et al. 2018). Fighting Games. Fighting games are rooted in the history of the arcade where individuals played against each other on the same machine. Examples include The Street Fighter, The King of Fighters, Mortal Kombat and Super Smash Bros.

Figure 9 provides a breakdown of the in-game revenues for the leading eSports genres. Table 3. Example of eSports game operations Goal of Game

Overview

Dota 2

Destroy the enemies ancient building before they destroy your team’s

Push- focus on destroying towers Gank- stealing from the enemies to gain advantages Farm- the process of obtaining and distributing gold to five heroes In-game cosmetic items such as Equipment, Couriers, Announcers and Tournament Items with real money.

Overwatch

The offensive teams aims to achieve a certain goal (escort a package, capture objective), while the defensive team attempts to halt the assault

In-game purchases are mainly focused on loot boxes (collectible items that contain a random selection of items, including alternate skins, highlight intros, emotes, voice lines, sprays, and more) but players can also buy Overwatch league tokens for esports cosmetic items

Fortnite

Be the last player/team alive No “teaming” (teaming up) with other in game opponents to help each other

Push- aggressive gameplay attempting to eliminate all other players Stealth- passive gameplay consisted of hiding and being covert Players can purchase weapons skins, player skins, emotes, and soundtracks

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Figure 9. Proportion of in-game revenue by genre (2017)

Publishers The most powerful and influential component of the eSports ecosystem is the game publisher. A game publisher is responsible for all aspects associated with development, production, marketing and sales of a game. In some cases, the publisher develops the game internally. At other times, it may contract the development to a third-party. Because the publisher assumes all the financial risk associated with a game’s development, it also controls the intellectual property and copyright associated with the game. This gives the publisher outright control over all aspects of the game, including rules, leagues, teams and content use (Merwin et al., 2018). This concentration of power is also what differentiates eSports from traditional sports and this lack of an independent governing body is also what is proving to be the greatest barrier to eSports being recognized by the IOC. As Chao (2017) states: “Esports governance is complicated by the fact that game developers create and hard code the rules of

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Table 4. Major publishers Publisher

Year Founded

Major eSports Titles

Revenues (2018)

1982

FIFA Madden NFL NHL Hockey

$5.15B

1991 Blizzard and Activation merger in 2008.

Overwatch, HearthStone Starcraft 2 Call of Duty: Black Ops 4 Heroes of the Storm

$7.5B

Riot Games

2006

League of Legends

$1.4B*

Epic Games

1997

Fortnite

$2.4B

Counter Strike Go

1999

Counter Strike Go

$414M

Valve

1986

Dota 2

$4.3B (2017)

Electronic Arts

Blizzard Activision

play into the game, and a game developer’s interests and claims of ownership under copyright may be misaligned with the interests of consumers, players and team owners.” Table 4 lists the largest eSports publishers today.

Leagues Originally, leagues were established by publishers to promote specific games. For example, Riot Games established League of Legends (LoL) leagues in both Europe and North America and Activision Blizzard followed, with the Overwatch League (OWL). OWL is the first global league with a city-based system and came with a business structure mirroring that of traditional sports leagues. LoL franchises sold for $10M and OWL franchises are valued at $60M today. Table 5 provides a summary of the largest eSports leagues in 2019. Table 5. Largest eSports leagues League

Year Founded

# Teams (2018)

Price Pool (2018)

Overwatch League

2018

20

$5M

ESL Pro League (CS:GO)

2015

48

$6M

The International (Dota 2)

2011

16

$25.5M

League of Legends Championship Series

2011

10

$6.5M

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Investors The significant growth of eSports has attracted a diverse array of investors. This includes hundreds of traditional sport teams and leagues, from the NBA to Manchester United to McLaren. In addition, high profile owners include Jerry Jones, Drake, Michael Jordan and Ashton Kutcher. Moreover, hundreds of venture capital firms, angel investors and accelerators have provided funding to eSports start-ups (Anekel, 2017). Anekel (2017) reports that up to 85% of these investors have only a single investment in eSports, suggesting that the market is viewing these as opportunistic.

Teams eSports teams are distinct from traditional sport teams because a single “team” may have franchises in different eSports. For example, Cloud 9 owns franchises competing in eleven eSports leagues: Rocket League, League of Legends, Counter-Strike: Global Offensive, Hearthstone: Heroes of Warcraft, Super Smash Bros. Melee, Fortnite, Overwatch, PlayerUnknown’s Battlegrounds, Rules of Survival, and Apex Legends. This scope is equivalent to the New York Yankees competing in MLB, NFL, NBA, MLS, NHL, UFC, the English Premier League and Formula 1. Refer to Chapter 2, for an analysis of some of the larger eSports teams.

Facilities Over the past five years, dedicated eSports facilities were built in places ranging from Las Vegas to Beijing. In 2017, Blizzard redeveloped the historic Tonight Show studio in Burbank, California for hosting eSports competitions (Landa, 2018). Though competitions are also held at multipurpose arenas and stadiums, eSports have challenging network demands that directly impact the outcome of the competition. This is because games, such as Fortnite and PUBG, may include up to 100 players competing concurrently, putting enormous demand on a network. The first week of the Fortnite Summer Skirmish Series in 2018, was shortened because network lag impaired competition (Reames, 2018). The recently opened Esports Stadium Arlington, meanwhile, embeds a onegigabyte dedicated symmetric line that can be split into two 500-megabyte lines. This one-gigabyte line can then be scaled to five-gigabytes as future demand warrants (Reames, 2018). 15

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Table 6. Examples of dedicated eSports facilities Name

Location

Year Founded

Capacity

eSports Stadium Arlington

Arlington, USA

2018

1000

HyperX eSports Arena

Las Vegas, USA

2018

1500

Santa Ana’s eSports Arena

Orange County, USA

2019

1400

eSports Arena

Oakland, USA

2018

800

Fusion Arena

Philadelphia, USA

2019

3500

Blizzard Arena

Burbank, USA

2017

450

Seoul OGN e-Stadium

Seoul, Korea

2015

1000

Zhongxian Stadium

Chongqing, China

2018

7000

Allied Esports SEG Arena

Shenzhen, China

2017

230

Lianmeng Dianjing Lgd Gaming Hangzhou Arena

Hangzhou, China

2017

600

Wangyu Dianjing Esports Arena

Beijing, China

2015

200

Blizzard Arena Taipei

Taipei, China

2017

200

The unique demand for dedicated eSports facilities extends to seating configuration. For example, the best seats for traditional sporting events tend to be close to the field of play. However, in eSports, the best sightlines to the screens tend to be higher up. Finally, the very design of competitions is irregular. There is not a standard and predictable four quarters as there is in basketball or American football. As a result, eSports facilities are designed to keep spectators engaged, with the ability to socialize between matches. Table 6 is a list of globally dedicated eSports facilities.

Events Events and tournaments are central to competitive gaming and eSports. Today, tournaments happen at both a local and global scale. In 2018, 737 major eSports events, generated $55 million in ticket revenue (Valentine, 2019). The International: DOTA 2 Championships in 2019 held in Shanghai with a prize pool of $25.5M (Batchelor, 2018-a) and the Fortnite World Cup held in New York City with a total prize pool of $100M (Webb, 2019). The 2017 Intel Extreme Masters Katowice with a total attendance of 173,000 remains the largest eSport event in history (Takahashi, 2017). Moreover, each event is a platform for streaming live content. The four largest eSports events in 2018 generated 190M hours of online viewing (Impey, 2018). 16

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Media and Content eSports media consumption is far more active compared to traditional sport consumption (Syracuse Staff, 2019). Today, traditional sports are primarily watched on television networks. In contrast, eSports is primarily viewed online, through channels such as Twitch, where the audience can interact with its spectators and participants in real-time. This unique social content is what some analysts view as offering the greatest potential for eSports monetization. To provide scale, the League of Legends World Championships and the Super Bowl in 2018 both reported 100 million unique viewers (Goslin, 2018). In March 2019, Twitch averaged 1.3M concurrent viewers, 57,600 concurrent channels and a total of 947 hours watched (Twitch Tracker, 2019). Twitch also enables micro-transactions that allow a viewer to tip a participant (Brathwaite, 2018). Twitch owns exclusive rights to some of the largest eSports leagues including the OWL, LoL and the NBA2K League. Other content streaming platforms include YouTube Gaming (Brathwaite, 2018), Facebook Gaming, Mixer and Caffeine.

Merchandise As the eSports ecosystem grows, leagues and teams are starting to mimic revenue models similar to traditional professional sports. Merchandising is one of the massive areas of growth in professional sports over the past two decades, facilitated through licensing agreements with apparel manufacturers and retailers such as Fanatics (Cohen, 2018). This strategy extends to both league and team level brand awareness for traditional sports leagues, such as the NBA. Chief Innovation Officer of the NBA notes that only 1% of their global fans ever attend a live NBA game, however, the global market appeal for branded merchandise is not limited by geography (2019 MIT Sloan Sports Analytics Conference, 2019). With a global audience of 427M (Newzoo, 2018), the market for eSports branded merchandise is enormous. Evidence of this is a recent agreement OWL signed with Fanatics, which will entail opening a dedicated digital shopping platform and an on-site retailer at the Blizzard Arena in Los Angeles (Cohen, 2018).

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Associations The eSports business model differs from traditional sports as the games are the exclusive IP of publishers. In traditional sports, such as soccer, FIFA does not own the exclusive rights for the production of a soccer ball or the design of a soccer pitch. In fact, soccer is played on beaches, parks and playgrounds. In contrast, a game publisher either owns leagues based on their platform (e.g. Overwatch League) or they license their IP to the owners of a league based on their platform (e.g. ESL). In essence, these publishers own the ball, the pitch and the rules to the game. As the proprietary owners, each publisher then owns exclusive control over who plays and the associated rules. As noted earlier, it is this lack of an independent and recognized global eSports governing body to manage compliance, rules and regulations that is proving to be a barrier for the recognition of eSports by organizations such as the IOC. The lack of a single global governing body may also have negatively impacted eSports, as demonstrated in the removal of eSports from the 2022 Asian Games (Elsam, 2018; Oak, 2019). Perhaps as a result of these impacts, attempts to establish a governing body have occurred but remain in their infancy. Similar to the publisher fragmentation, eSports associations are facing similar divisions. An example of this is the establishment in 2016 of the UK based World eSports Association (WESA) by eSports teams and league/ tournament organizer ESL. The WESA mandate is to support player representation, standardized regulations, and revenue sharing for teams and to align schedules for fans, players, organizers and broadcasters (WESA, n.d.). The International eSports Federation (IESF) was also established in 2016 with a goal of aligning and coordinating eSports (IESF, n.d.). A third group, the eSports Integrity Association (ESIC) was then formed to manage the integrity of eSports (ESIC, n.d.-a) which was supported by the ESL, CS: GO and Rainbow Six. However, two of the largest eSports Leagues, LoL and OWL, did not recognize ESIC. The ESIC mandate was to include issues of common interest for all stakeholders, including match manipulation, betting fraud, doping and other forms of cheating. It is suffice to say that no dominant international governing body has emerged to date.

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Education The education system is also starting to reflect the growth of eSports. The National Association of Collegiate Esports (NACE) was established to coordinate varsity eSports across 130 different universities in the United States, including 3000 athletes and $15M in eSports scholarships (NACE, n.d.). Today, NACE represents 94% of varsity eSports programs in the US. In addition, specialized eSports programs have emerged worldwide, which includes a Bachelor of Business Administration in eSports Business at Kajaani University (Finland) and a Bachelor of Science in eSports management at Becker University (U.S.).

Networks The growth of networked gaming is driven by a dramatic advancement in network capacity and speed, as the average network speed increased by five times between 2007 and 2017 (Akamai Technologies, n.d.). Simultaneously, internet users doubled to 4.4B users worldwide in the past decade (Internet World Stats, n.d.). These advancements not only enabled network gaming, but enabled streaming services, such as Twitch. At 8% of total global network traffic, gaming consumes a massive amount of network capacity, following online streaming (58%) and website (17%) traffic (Sandvine, 2018). To offer a sense of the impact of gaming on network capacity, downloading Call of Duty: Black Ops is equivalent to streaming 14 hours of 4K video (Sandvine, 2018). However, the network traffic impact of gaming extends into streaming as both Twitch and YouTube Gaming are massive users of network capacity. Today, Twitch is in the top 30 most popular websites in the world with 15 million daily unique visitors and over two million daily broadcasters. If Twitch was a traditional broadcast network, its concurrent viewership would have surpassed CNN, Fox News and ESPN in 2018 (Iqbal, 2019).

Hardware Similar to an automotive manufacturer in Formula One, hardware can provide a significant competitive advantage in eSports. There are two major categories: the gaming platform and peripherals. Platforms are further divided by consolebased, PC-based and mobile eSports. Today, the console market is valued at $40B, dominated by Microsoft’s Xbox One and Sony’s PS4. PC gaming is 19

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Figure 10. Gaming market by platform

valued at $30B but is far more fragmented, as competitive gamers generally custom build their PCs to maximize competitiveness (Gaming Factors, n.d.). The final hardware elements are associated with gaming peripherals and was valued at $2.5B in 2018 (Business Wire, 2018). This market includes controllers (e.g. Scuff), keyboards (e.g. Razer), headsets (e.g. Hyper X), Chairs (e.g. DXRacer) and monitors (e.g. Alienware). Figure 10 provides a breakdown of revenue by hardware platform.

CONCLUSION In this introductory chapter we have provided a brief overview of the complex dynamics and issues that have contributed to the massive growth of eSports over the past decade. This included providing an overview of the eSports ecosystem and the organizations driving expansion. The book is structured with dedicated chapters that will explore the themes introduced here. Below is a summary of each chapter and the questions it considers.

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Steiberg, L. (2018, July 28). What defines a “sport”. Forbes. Retrieved from https://www.forbes.com/sites/leighsteinberg/2018/07/28/what-defines-asport/#169ed7652d66 Syracuse Staff. (2019). With viewership and revenue booming, eSport set to compete with traditional sports. University of Syracuse. Retrieved from https:// onlinebusiness.syr.edu/blog/esports-to-compete-with-traditional-sports/ Takahashi, D. (2017, March 16). Poland’s Intel Extreme Masters was biggest event in eSport history with 173,000 spectators. Venture Beat. Retrieved from https://venturebeat.com/2017/03/16/polands-intel-extreme-masterswas-biggest-event-in-esports-history-with-173000-spectators/ Twitch Tracker. (2019). Statistics. Retrieved from https://twitchtracker.com/ statistics Wagner, M. G. (2006). On the Scientific Relevance of eSports. In International conference on internet computing (pp. 437-442). Academic Press. Webb, K. (2019, April 3). Epic Games is hosting its first-ever Fortnite World Cup, where it plans to award $40 million to the world’s best players. Business Insider. Retrieved from https://www.businessinsider.com/fortnite-world-cupprize-money-schedule-2019-4 Witkowski, E. (2012). On the digital playing field: How we “do sport” with networked computer games. Games and Culture, 7(5), 349–374. doi:10.1177/1555412012454222 World eSports Association. (n.d.). Home. Retrieved http://www.wesa.gg Zampolini, P. (2018, January 26). Where are the women in eSports? CMF Trends. Retrieved from https://trends.cmf-fmc.ca/where-are-the-women-inesports/

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ADDITIONAL READING Ballhaus, C., Weyßer, M. C., Wilke, N., Luchterhand, J., Prümm, L., & Sagemüller, M. (2017). Digital trends outlook 2017 – eSports (PWC). Retrieved from https://www.pwc.de/de/technologie-medien-und-telekommunikation/ digital-trend-outlook-2017-esport.pdf International Olympic Committee. (2017). The development of eSport. Retrieved April 19, from https://www.olympic.org/news/communique-ofthe-olympic-summit Merwin, C. D., Sugiyama, M., Mubayi, P., Hari, T., Terry, H. P., & Duval, A. (2018, October 12). The world of games eSports: From wild west to mainstream. Goldman Sachs. Retrieved from https://www.goldmansachs. com/insights/pages/infographics/e-sports/report.pdf Newzoo. (2019). Global eSport market report. Retrieved from https://newzoo. com/insights/trend-reports/newzoo-global-esports-market-report-2019-lightversion/fromhttps://en.oxforddictionaries.com/definition/e-sport Pizzo, A., & Funk, D. (2017). eSport vs. sport: A comparison of consumer motives. In meeting of the North American Society for Sport Management (NASSM).

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Chapter 2

eSports Stakeholders:

Important Groups and Relationships

ABSTRACT Chapter 1 introduced eSports and many of the key stakeholder groups involved in the industry. This chapter builds on the introduction, expands the stakeholder groups, explores more deeply the major stakeholders in eSports, and delves into the relationships and interactions between and amongst these groups. In particular, Chapter 2 focuses on the most important stakeholder groups. The purpose of the chapter is threefold: (1) to learn more about the stakeholders and identify those most important to the field and its growth, (2) to assess the power dynamics amongst those stakeholders, and (3) to compare these stakeholders, relative to traditional professional sports.

INTRODUCTION In any industry, the identification of its stakeholders is a key and important step towards understanding the industry. Table 1 describes a number of important stakeholders in eSports, provides a few examples for each group, and assesses their importance to the future growth and viability of the eSports industry. By definition, a stakeholder is any group, party or set of individuals/ organizations who have a ‘stake’ in the future of the industry. Thus, a list of stakeholders can range from those who are deeply connected to an industry and rely on it for their livelihood, such as those who work for an eSports league, to those who have an involvement in the industry that is not part of DOI: 10.4018/978-1-7998-1538-9.ch002 Copyright © 2020, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

eSports Stakeholders

Table 1. eSports industry stakeholder groups Stakeholder Group

Description

Examples

Importance

Publishers

These organizations own the intellectual property of the video games which eSports leagues, clubs and players compete in

• Riot Games Inc. • Valve Corporation • Activision Blizzard • EA Sports

Very High

Developers

These organizations are the creators of the games on which play occurs

• NetherRealm • EA Sports

Very High

Event Operators

Organizations or groups who organize and host eSports events

• ESL • FACEIT • Dreamhack

Medium to High

Leagues

The competitive set of events or tournaments, where teams compete for an overall title (championship)

• eSports Championship Series (ECS) • ESL’s Pro League • The American Collegiate eSports League (ACEL) • The National Association of Collegiate eSports (NACE) • NBA 2K

High

Teams/Clubs

Sets of players who compete as a group, as an identified team, in an eSports league

• Fnatic • Astralis • Complexity Gaming • College Teams (e.g., Harrisburg University)

Medium

One-off Competitions

Major competitive tournaments that are not affiliated with a league

• The International • Apex • League of Legends India Champions Cup

Medium

Streaming Platforms

Organizations who offer, manage and develop platforms for online media and streaming by fans

• Twitch • YouTube Gaming • Twitter

Very High

Broadcasters

Traditional cable broadcasters who also offer streaming and other media services and outlets

• ESPN • Turner Sports

High

Sponsors

Brands who invest resources into eSports in return for marketing rights to achieve their own objectives

• Intel • Red Bull • Samsun • Coca-Cola • Audi

Medium

Players

The athletes/participants who compete as individuals or members of teams in leagues or competitions

• Fatal1ty • NaDeSHoT • Ninja

High

Gambling Organizations

Firms who offer fans and gamblers the opportunity to bet on eSports competitions

• Unikrn • Bet365 • SkyBet

Low

Federations and Associations

The governing bodies, typically not-for-profit organizations, who are responsible for the stewardship of eSports, its rules and its development

• International eSports Federation

Medium to High

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eSports Stakeholders

Table 1. Continued Stakeholder Group

Description

Examples

Importance

Equipment and Apparel Manufacturers

The organizations who produce the equipment that players use to compete, the clothes they wear and the gaming accessories they use in competition and/ or training

• Turtle Beach

Medium

Ticket Sellers and Resellers

Organizations who sell tickets to eSports events in the primary market (i.e., direct from event itself) or secondary market (i.e., resale of tickets)

• eSports Tickets • StubHub • Vivid Seats • Specialized Ticket Brokers

Medium

Traditional Sport Clubs

Groups of players competing as a team in a non-eSports league, but who (as a club) have invested in the ownership or management of an eSports club

• FC Schalke 04 • West Ham United F.C. • The NBA Clubs in NBA 2K

Medium

Celebrities

Well-known figures from outside of eSports but who have invested in eSports through club or league ownership

• Stan Kroenke • Michael Jordan

Low

Fans

Followers of eSports leagues, clubs and/or players. They are often also amateur players themselves.

Very High

their core activities. An example here would be a celebrity actor investing in an eSports club. As reported in Table 1, seventeen (17) different stakeholders in eSports were identified. These include groups, organizations or individuals who have a ‘stake’ in the eSports industry and who are impacted by its success or failure. In reviewing Table 1, it is important to focus on those stakeholder groups who are ranked as “high” or “very high” in the importance category (far right column in Table 1). These are the organizations who drive (or have the potential to drive) the future growth of eSports. Similarly, those ranked as “low” or “medium” are less likely to be vital to the success of the industry, although they still may have a vested interest in the success of the eSports industry. Using Table 1 as a guide this chapter will build on the content of Chapter 1 by identifying and digging deeper into the major stakeholders, the relationships among them and the power structures throughout.

30

eSports Stakeholders

WHO ARE THE MAJOR ESPORTS STAKEHOLDERS TODAY? The Seven Most Important Groups in eSports In asking who are the major eSports stakeholders, a number of factors need to be considered: where does the power lie, who has the resources (cash, intellectual property, access to talent, etc.), who are the fans following and where do they fit within the overall industry trends? Much of this information is shared in Chapter 1, including outlining the technological advancements in gaming, the emergence of social networking and video streaming, the rapidly expanding global gaming market (Merwin, Sugiyama, Mubayi, Hari & Terry, 2018), as well as the growth of competitive gaming (eSports). As noted in Table 1, the publishers (owners of the intellectual property of eSports), game developers (creators of the core video games), streaming platforms (providers of access to high quality video/digital content), and fans (followers of eSports) are the stakeholders viewed as having “very high” importance to the industry. An additional 3 stakeholder groups are ranked as ‘high’ in their importance, including eSports leagues, broadcasters and players (athletes). It is these seven groups summarized in Table 2 who will then be the focus for the remainder of this chapter. Information was already shared in Chapter 1 on some of these key stakeholder groups in Table 2 providing details on six of the major publishers in eSports, including their major titles offered and 2018 revenues. Riot Games, for instance, is best known for its League of Legends game, while Blizzard Activision has the highest reported 2018 revenues of the publishers at US$7.5B. With respect to leagues, the most important stakeholder that is a direct producer of eSports content, is outlined in Table 4 in Chapter 1. This reviews four eSports leagues and competitions, reporting that the ESL Pro League (CS:GO) fielded the most teams (48) in 2018, while The International (Dota 2) offered the largest prize purse at US$25.5M. The reduction of the 17 groups (Table 1) to the seven major groups (Table 2) is not to suggest that the other stakeholder groups do not play a key role in the future of eSports. Instead they are not viewed to be as deeply associated with the success and/or the future growth of the industry. For instance, event operators that are ranked medium to high are clearly vital to eSports, but their services are offered by many organizations (Merwin et. al, 2018). Similarly, some of the stakeholders who provide resources for eSports, but 31

eSports Stakeholders

Table 2. Major eSports industry stakeholder groups Stakeholder Group

Importance

Rationale for ‘Very High’ or ‘High’

Publishers (e.g., Riot Games)

Very High

Own the IP (Intellectual Property) rights to much of the eSports content that is streamed. Thus, high control over eSports and as set-up to benefit significantly from potential future growth and expansion. Note that these stakeholders and the decisions they make will have a large impact on that potential future success.

Developers (e.g., EA Sports)

Very High

In some cases, these developers are ‘the sport’ which is contested by millions, by leagues and clubs around the world. They core game is the sport and is a major revenue generating asset for these developers.

Streaming Platforms (e.g., Twitch)

Very High

These stakeholders offer the infrastructure for the wide sharing of eSports content in a high-quality digital way that enables eSports to be consumed.

Fans

Very High

Akin to any sport, the size and affinity of its fan base is vital.

Leagues (e.g., NBA 2K)

High

Akin to any sport, the league is the steward of a set of teams, a large number of players, a schedule of competition and – importantly – the awarding of a championship.

Broadcasters (e.g., ESPN)

High

Mainstream (broader offering than just eSports) network that diffuses content to large audiences with credibility.

Players

High

The talent who compete and provide the product that fans are interested in. Some have celebrity status, leading to massive followings, sponsorship and media attention.

are not involved in the production of the competitions are very important to the industry and its growth as they generate resources but are ranked lower in their importance due to the fact that they exist as a function of the success of eSports. These could include sponsors (rank: medium), gambling organizations (rank: low), ticket sellers/re-sellers (rank: medium) and equipment/apparel manufacturers (rank: medium).1

Publishers The publishers are the parties that develop, design and market the games. Some publishers tend to organize their own events and competitions (e.g., Riot runs their own eSports tournaments) while others license to third-party organizations to organize the competitions. Overall, publishers must work closely with all the parties involved such as the players, broadcasters and leagues; thus, leading to centralized ownership. In contrast to more traditional sports, publishers in eSports possess significant power. For example, a publisher can exercise their power by choosing to restrict people or organizations from playing their game. 32

eSports Stakeholders

As noted in Chapter 1, publishers are arguably the most powerful in all of eSports, since they are responsible for each and every element, task and activity associated with the development, production, marketing and sales of the game. The NBA 2K video game, which is also the basis for the NBA 2K eSports league, is a good example of this as numerous developers and partners have been involved over the 20 years of the game’s development and redevelopment. The publisher and owner of the game is a company called 2K Games Inc., which retains the financial risk and also benefits if the game continues to be successful.

Developers The creators of the game are, in some cases, also the publishers (e.g., NetherRealm). In other cases, many different developers are involved with the game over its history (e.g., NBA 2k). The developers are responsible for the gameplay and the video game environment in which eSports happens. Developers are also involved in the creation of the game at its creation and often throughout its development. Given the rapidly changing technical environment of gaming, developers are heavily involved in game updates (often annual). NBA 2K, for instance has had nearly 20 years of regular updates and multiple developments. The changes are often characterized as sequels, updates and/or enhancements. Recently, developers have also taken to social media to seek player’s feedback for errors in gameplay in order to fix the issues and enhance playability.

Streaming Platforms Potentially the most influential stakeholder in terms of building fan engagement with a game or a player, is the streaming platform. The members of this stakeholder group include those specific to eSports (i.e., Twitch) and those that are broader in scope but have entered the eSports arena (e.g., Twitter, YouTube Gaming). In the digital world of eSports, streaming platforms act as the modern-day broadcaster who disseminate eSports content. This includes both competitive (e.g., league competitions) and non-competitive (e.g., celebrity players showcasing their talents) means. Some might even argue that the origin of eSports and its rapid growth can be attributed to these streaming platforms since they offered the ability to not only watch eSports athletes compete in 33

eSports Stakeholders

professional tournaments but also provided deep access to ‘behind the scenes’ content such as showing star players training or expressing daily rants. The comparison to traditional professional sport is having regular and ongoing opportunities to watch favorite athletes in the gym while they work out, at an intense training session on the field, recovering after a game, or just informally expressing their reflections from their day.

Fans Fans are the lifeblood of sport business and they drive the business case (which will be discussed in Chapter 3 on the eSports Economy). In eSports, global fan engagement is strong for both competitive contexts and also in non-competitive ones such as those noted earlier (Ballhaus, Weyßer, Wilke, Luchterhand, Prümm & Sagemüller, 2017). Where this is different from traditional sports and entertainment is that in eSports, fans can regularly interact directly with elite players through comments online or joining them in a game. Further, fans not only watch eSports content, but they also consume advertisements through the streaming platforms, purchase related merchandise and are exposed to sponsors, in a very integrative way. The fact that fans are often active participants in eSports is another important feature of eSports fandom. Both elite athletes and amateurs play the same games on the same platforms, occasionally concurrently. As noted in Chapter 1 (See Figures 1.5 and 1.6), the ratios of active participants to pure fans is much higher than in other sports, as high as 28:1 for Fortnite players versus tournament viewers.

Leagues Example of eSports leagues include Electronic Sports League’s ‘ESL ONE’ and Turner’s ‘Eleague’. In eSports leagues, many of the preliminary matches take place online before the hosting of the ‘playoffs’ typically takes place in a physical location, often an eSports specific venue. As reported earlier, leagues generate revenue through media rights fees, concessions, ticket sales and sponsorship. An example of a new league is the American Collegiate Esports League (ACEL), which is a non-profit eSports league in the United States that hosts competitions for post-secondary students. ACEL has adapted to the North American major sports model and uses a conference system to organize its competitions. 34

eSports Stakeholders

However, unlike most sports, there is no recognized governing body regulating eSports. For soccer FIFA exists, basketball FIBA, and Swimming FINA, and these governing bodies take the role of organizing, developing and growing the sport globally. They are not-for-profit organizations without ownership seeking profits. This changes the dynamic and has been shown to be successful, efficient and productive (Foster, O’Reilly & Davila, 2016). Where the absence of an international body has had a negative impact on eSports was its’ removed from the program of the 2022 Asian Games, after originally having been included (Oak, 2019). The other impact is that the absence of regulatory oversight, results in the tasks related to rule-setting, technical aspects, appeals and policy falling to the individual eSports leagues who manage their own game, clubs and athletes. As noted in chapter 1, the eSports Integrity Association (ESIC) was formed to manage the integrity of eSports (ESIC, n.d.-a) including match manipulation, betting fraud, doping and other forms of cheating but has had limited acceptance by leagues. In contrast, strict personal conduct policies exist in traditional sports at a league level governing the integrity of the game and league. For example, Table 3, are examples of personal conduct policies in the NFL, NBA and English Premier League. Table 3. Examples of personal conduct policies in traditional professional sports League

League Policy

National Football League (NFL)

Anyone with association to the NFL must refrain from conduct detrimental to the leagues integrity or damaging of public confidence. This includes owners, coaches, players, other team employees, game officials, and employees of the league office, NFL Films, NFL Network, or any other NFL business.

National Basketball Association (NBA)

Under the collective bargaining agreement, players have obligations to attend sanctioned NBA events. Practices, games (regular season and playoff), promotion, charitable causes, and more, all count towards this. Players may be suspended or withheld their compensation if these requirements are not upheld or are convicted of violent acts. Players are required to cooperate in any league investigations regarding misconduct or breach of agreement.

English Premier League (EPL)

At the Premier League, four league values define how players should operate and the league conducts its business- fair, ambitious, inspiring, connected. These values determine decisions which support clubs in their efforts to inspire fans, communities and partners alike to invigorate lives across the globe. This Statement of Principles outlines the standards and behaviours required to conduct our business ethically and to comply with the law. Everyone who works for or on behalf of the Premier League are expected to uphold these high standards.

35

eSports Stakeholders

Broadcasters Although the ‘traditional’ broadcaster is perhaps a dated and declining stakeholder, they remain vitally important to eSports, as this group provides the coverage that a new and developing start-up sport like eSports requires to grow. There is also a credibility benefit when a major broadcaster (e.g., NBC, BBC, Sky, etc.) includes content on their network. A recent example of a major broadcaster prioritizing eSports was US-based ESPN partnering with the Overwatch League to broadcast hundreds of hours of live gaming events to traditional cable television. The coverage included several stages of competitions and the playoffs. Results were modest but decent for the first Overwatch League finals in 2018, when viewership on ESPN reached about 215,000 (as reported in Chapter 1).

Players The players (or athletes) in eSports are another important stakeholder to the growth of eSports. In general, elite eSports players often compete in just one video game as they spend all their time training for that one game. Their income, like professional athletes, is from a variety of sources such as salaries paid from teams they play on, prize money earned from tournament performance and appearances, streaming advertising revenue (i.e., advertisers paying them while they stream in return for promotional content), sponsorship, fan donations and merchandise sales. For example, Ninja reached a record of 635,000 viewers (non-tournament record) when he streamed himself playing Fortnite with famous Canadian rap artist Drake. Previous research has also shown the importance of both celebrity star athletes and local heroes to the business success of professional sport clubs (Nadeau & O’Reilly, 2006). In the case of eSports, the celebrities are there, but the local heroes are not, yet. The celebrities (e.g., Fatal1ty or Ninja), generate more fan interest and revenue outside of competition while streaming and are well established. The local hero, meanwhile, may soon emerge as leagues are seeking to build affinity to local markets through their clubs. NBA 2KL is a good best example as the league is centralizing players and clubs in their home markets. In these cases, players are contracted to play for a team for specific competitions and are only able to represent that one team. The hope is that

36

eSports Stakeholders

franchises will be able to build affinity in their home/local markets, where local heroes will then emerge.

THE POWER RELATIONSHIPS BETWEEN MAJOR STAKEHOLDERS The seven major stakeholder groups (see Table 2) in eSports exists within the ecosystem as articulated in Chapter 1. An ideal ecosystem is described to be an interdependent, synchronized group of organizations within an industry that makes it healthy and sets it up for growth. That is certainly the case/ need amongst the seven groups listed earlier and evident by the industry’s history to date (Fulton, 2008; Borowy, 2012; 2013). The following sections describe the power relationships amongst the four most important (i.e., those ranked ‘very high’ in Table 2) and the 3 next most important (i.e., those ranked ‘high’ in Table 1). Figure 1 outlines the power relations amongst these seven groups. Figure 1. ­

37

eSports Stakeholders

As noted in Figure 1, publishers and developers are synchronous in many cases, either as the same organization taking on both roles or as a principalagent relationship where the developer is working directly for the publisher. These two stakeholders are joined by a solid line in Figure 1 and are viewed as aligned. Below these two are the leagues, where a two-headed arrow links them, indicating a power relationship where the league relies on a game platform that is world class and attractive to players, while the publishers/ developers count on leagues to expand the reach, following, use and profile of their games. A balanced power structure is presented. Below the leagues, a one directional arrow flows to the players, who at this early stage of the development of eSports, rely fully on the leagues for their opportunities to play, to earn prize money, to gain profile and to generate sponsor interest. Certainly, there are a few exceptions (such as Ninja), however for most players, this is their current reality. Figure 1 demonstrates the considerable power that both streaming platforms and broadcasters have in eSports, with one-directional arrows pointing to each of the publishers, developers, leagues and players. In each of those cases, it is the streaming platforms and broadcasters who hold the majority of the power dynamic as they control access to the fans. To outline the fact that the streaming platforms are in a much stronger position than the broadcasters (and to be indicative of the fact than many broadcasters are moving to become streaming platforms), a one directional arrow is placed between them. Finally, two, one-headed arrows from fans to each of broadcasters and streaming platforms outline the power position fans have as the drivers of the business success for all other stakeholders.

COMPARING STAKEHOLDERS TO TRADITIONAL SPORTS To conclude, this section compares each of the important stakeholder groups to the same groups in traditional professional sports as a means to show the similarities and the differences that exist. First, for leagues and clubs, as opposed to traditional sports where a club would compete in one league (e.g., Toronto Blue Jays in the MLB; Golden State Warriors in the NBA), eSports teams deploy different players in different leagues and competitions. For example, Cloud9 deploys teams to all the major titles including League of Legends, Counter-Strike, Overwatch, Rocket League, Super Smash Bros., PUBG, and Fortnite. This distinction 38

eSports Stakeholders

may disappear over time as eSports grows and teams focus on one particular league or set of competitions, as remuneration levels and coordination (i.e., a recognized international federation) increases. Second, eSports, likely due to the low cost of entry compared to traditional sports, attracts ownership and investors who are celebrities, either from traditional sport (e.g., Michael Jordan, Stephen Curry, Andre Iguodala, Steve Young) or from entertainment (e.g., Drake, Ashton Kutcher, Steve Aoki), or venture capital firms (Anekel, 2017). Investors who are owners of traditional sport properties (e.g., Stan Kroenke, owner of multiple sports franchises such as the Los Angeles Rams, Denver Nuggets, Colorado Avalanche, Colorado Rapids, and Arsenal Football Club) have also been attracted to eSports. Third, much like traditional sports, eSports is expecting to see considerable activity related to gambling. Notably, Grove (2016) projected that fans would gamble US$12.9 billion by 2020 on the outcome of eSports events. Fourth, in traditional professional sports, no entity owns the sport, but nonprofit associations oversee leagues. In eSports it is sometimes the publisher who both owns and manages the sport. This is changing, however and a number of other models of eSport governance are emerging which include national and/or international eSports federations and associations, leagues or teams that have set up or are acting as governing bodies, and players who have set up their own associations. In the case of player’s associations, although these were created to protect players’ rights similar to traditional professional sports, many are created by the game publishers/developers, as opposed to the players themselves. Some examples of these associations are listed below: •

• • •

National eSports federations and associations: Korean eSports Federation (KeSPA), eSport-Bund Deutshland (ESBD), Japan Esports Union (JESU), and General Administration of Sport of China, E-Sport Department. International/regional eSports federations and associations: International eSports Federation (IeSF) and the Asian Electronic Sports Federation (AESF). Video game industry associations: Entertainment Software Association (ESA) and Computer Entertainment Supplier’s Association (CESA). League and/or team associations: World Esports Association (WESA) and Professional Esports Association (PEA).

39

eSports Stakeholders

•

Player associations” Counter-Strike Professional Players’ Association (CSPPA), North American League of Legends Championship Players Association (NALCSPA), King Pro League (KPL) Union, and IeSF Athlete’s Commission.

Fifth, similar to traditional sports, fans purchase decisions will likely be influenced by the equipment or accessories that their favorite team or player use in competition (Foster, O’Reilly & Davila, 2016). For example, Fanatics Inc. (reported to be the world’s largest seller of licensed sports apparel) partnered with the Overwatch League to sell merchandise (i.e., apparel, collectibles, and game-used items).2 Another example is H4X (expressed as “hacks”), which is a Canadian company which partnered with DreamHack and sells merchandise that includes eSports related apparel (“H4X Pro Posture Corrector”), eSports equipment (“H4X All Pro Chair”) and other “performance” gear.3 Sixth, ticketing to eSports events is similar to that of traditional sports and an emerging secondary ticket market (i.e., via Stubhub, Vivid Seats or other resellers) has emerged. Seventh, in a manner that differs from traditional professional sport, eSports teams may have franchises in different eSports. A good example is Cloud9, which owns and operates franchises competing in eleven eSports leagues. Finally, in live eSports spectating, the experience for the fan is entirely different as the best seats are the ones with the best sight lines to the big screens and not to the live action. Thus, the most expensive seats are higher up in the bowl and in line with the giant screens (where configurations differ from venue to venue). Similarly, the length of matches and timing of events differs game by game and event by event, with some games having a variable game length unlike traditional sport, where most games are consistent (e.g. a basketball game is 48 minutes of stop time).

CONCLUSION This chapter built on Chapter 1 and assesses the key stakeholder groups within eSports, identifying those with the most importance when considering the future growth and business potential of the industry. In Chapter 2, this book considers the eSports economy, understanding the stakeholders, their power dynamics and their role in the industry.

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FUTURE RESEARCH DIRECTIONS In researching and writing this chapter, the fact that very little is known publicly about these stakeholders and their interactions with each other became evident. As such, this is an area with considerable and vast research opportunity. Notably, qualitative study (e.g., interviews with founders, leaders, management teams and industry experts) is required for each of the stakeholder groups noted in Chapter 1 (prioritizing the high importance groups detailed in Chapter 2) to better understand the dynamics of these groups, their objectives, the details of their inter-relationships within and between stakeholder groups and identifying the drivers and barriers to industry growth. Building such a deep understanding could then lead to a variety of quantitative research studies to assess these differences and build our understanding of these chapters.

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REFERENCES Anekel, M. (2017). The list: The most active VC’s in esports. Retrieved from https://medium.com/tnlmedia/the-list-the-most-active-vcs-in-esports91027a1670ba Ballhaus, C., Weyßer, M. C., Wilke, N., Luchterhand, J., Prümm, L., & Sagemüller, M. (2017). Digital Trends Outlook 2017 – eSports (PWC). Retrieved from https://www.pwc.de/de/technologie-medien-und-telekommunikation/ digital-trend-outlook-2017-esport.pdf Borowy, M. (2012). Public gaming: eSports and event marketing in the experience economy (Doctoral dissertation). Communication, Art & Technology: School of Communication. Borowy, M. (2013). Pioneering eSport: The experience economy and the marketing of early 1980s arcade gaming contests. International Journal of Communication, 7, 21. Foster, G., O’Reilly, N., & Davila, A. (2016). Sports business management: Decision making around the globe. Routledge. doi:10.4324/9781315687827 Grove, C. (2016). Esports & Gambling: Where the Action is? Eilers & Krejcik Gaming. Retrieved from https://www.thelines.com/wp-content/ uploads/2018/03/Esports-and-Gambling.pdf Merwin, C. D., Sugiyama, M., Mubayi, P., Hari, T., Terry, H. P., & Duval, A. (2018, October 12). The world of games eSports: From wild west to mainstream. Goldman Sachs. Retrieved from https://www.goldmansachs. com/insights/pages/infographics/e-sports/report.pdf Nadeau, J., & O’Reilly, N. (2006). Developing a Profitability Model for Professional Sport Leagues: The Case of the National Hockey League. International Journal of Sport Finance, 1(1), 46–52. Oak, Y. (2019, April 9). Esports to be Excluded from the 2022 Asian Games. Inven Global. Retrieved from https://www.invenglobal.com/articles/7984/ esports-to-be-excluded-from-the-2022-asian-games

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ADDITIONAL READING Hamari, J., & Sjöblom, M. (2017). What is eSports and why do people watch it? Internet Research, 27(2), 211–232. doi:10.1108/IntR-04-2016-0085 Newzoo. (2016). Global eSports market report. Retrieved from https://newzoo. com/wp-content/uploads/2016/02/Newzoo_2016_Global_Esports_Market_ Report_Dummy.pdf Newzoo. (2018). Global games market report. Retrieved from https://newzoo. com/solutions/standard/market-forecasts/global-games-market-report/ Newzoo. (2019). Global eSport market report. Retrieved from https://newzoo. com/insights/trend-reports/newzoo-global-esports-market-report-2019-lightversion/ Pizzo, A. D., Baker, B. J., Na, S., Lee, M. A., Kim, D., & Funk, D. C. (2018). eSports vs. Sport: A Comparison of Spectator Motives. Sport Marketing Quarterly, 27(2).

ENDNOTES 1 2

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eSports sponsorship will be discussed in detail in Chapter 5. For examples of this merchandising refer to https://www.fanatics. com/overwatch-league/overwatch-league-gear/o-10708945+t09030102+z-965-3409454812 For examples of this merchandising refer to https://h4x.gg/products/ h4x-pro-posture-corrector

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Chapter 3

The eSports Economy ABSTRACT A decade ago, few people believed that eSports would be a billion-dollar business. However, over the past few years, the industry has grown exponentially, attracting fans, players, investors, sponsors, and governing bodies. The global eSport economy exceeded the $1B dollar mark for the first time in 2019. In this chapter, the size of the eSport industry in terms of investment, revenue generation, and major costs will be discussed. The chapter also presents the risks and concerns associated with the eSports industry.

INTRODUCTION The eSports industry has been attracting an increasing number of investors, sponsors, viewers, players and governing bodies. Originally, considered a fringe hobby, the industry now boasts millions of fans and nearly a billion dollars in revenue. Specifically, the eSports industry generated an estimated total revenue of $905M in 2018, up from $493M just two years before. North America (and mostly the United States), China, and South Korea take the majority with 60% of the revenue generated from the three regions (Gray, 2018). Companies in this young industry are raising funds from corporations, ticket sales, media rights and merchandising, continually buying and selling teams and players, constructing training facilities, and building their fan bases through increasingly sophisticated marketing efforts.

DOI: 10.4018/978-1-7998-1538-9.ch003 Copyright © 2020, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

The eSports Economy

As discussed in Chapter 1, prize money is growing significantly in eSports and now rivals other professional leagues and tournaments. Gray (2018) noted that the total prize pool of some eSports tournaments (e.g., The International, in 2018, had a reported prize purse of US$25.5M) and is currently higher than that of the National Basketball Association (US$13M) (who reward their players largely based on base salary) and that of the most PGA golf tournaments, including The Masters (US$11M) and the US Open (US$12M). As a result, the eSports industry is tracking for future growth in a way that emphasizes performance-based pay, much like more traditional sports such as tennis. In terms of viewership, the industry is capturing the interest of viewers and streamers attracting an estimated 400 million worldwide viewers by the end of 2019 (Gray, 2018). Of particular note, is the movement towards streamers over television watchers. For instance, the Super Bowl in 2019 had an estimated 2% of viewership via streaming versus traditional television, while the number in eSports, although not specifically documented, is well into the majority. SullyGnome.com estimated that Twitch hit 1.2 million streamers in 2018. With the growing size of the industry, and as already noted, the global eSports economy will exceed the US$1B dollar mark for the first time in 2019 (Refer to Figure 3.0). This is the first time that revenue will have exceeded the billion-dollar revenue mark, and it is estimated by many sources that about one third of this revenue will come from the United States. This will include sponsorships and media rights being the two main sources (Merwin 2018). Again, although modest in size compared to other industries, these early indicators of market-based revenues are positive for the industry. On this current trajectory, the eSports market is expected to generate $1.8 billion by 2022 (Gray, 2018). Reflecting on the industry’s popularity and rapid growth, Jack Etienne, the owner of the world’s most valuable eSports company (Cloud9), stated, “To me it feels like we have broken a barrier that we have never attained before in eSports [in the past few years]” (Pei, 2019). Indeed, many investors are looking at the industry as a new investment opportunity and are founding new eSport teams to compete in official tournaments. Summarily, eSports is described as having a small but rapidly growing economy with many very positive indicators. To understand the eSports economy in more detail, this chapter will discuss the industry’s different revenue streams, major costs, capital investments, and the risks/concerns that

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Figure 1. eSports revenue

exist. The objective of the chapter is to provide an overview of the industry from an economic perspective and to allow for a broad understanding that will lay a foundation for later chapters that will address specific applications and issues within eSports.

INVESTMENT IN THE ESPORTS INDUSTRY Not even a decade ago, eSports team owners and league managers had considerable difficulty attracting and convincing investors to take a chance on their businesses and support its growth with financial investment. However, over the past few years, a host of investors have and are continuing to join the eSport industry with a series of investments in existing leagues/clubs/games and new/start-up leagues/clubs/games. These investors range from celebrity artists, professional athletes in other sports, traditional professional sport team owners to educational institutions. For example, NBA star Kevin Durant and NFL celebrity Odell Beckham Jr. have invested in Echo Fox, music celebrity Drake in 100 Thieves, and actor/performer Will Smith in Gen.G Esports. In the early days of eSports, only a few individuals owned the majority of the world’s top 10 most valuable eSports companies but over the past four years, these owners have started raising investment capital through rounds of 46

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financing to grow from six deals worth US$34 million in 2008, to 74 deals (the majority from angel and venture capital investors) worth $1.52 billion in 2017 (Ozanian & Settimi, 2018). As reported in Table 1 and Figure 2, the 2018 eSports companies’ valuation by TNL Media show that the average value of the world’s top 10 eSport companies is $157M, a marked increase over previous years. Table 1. Most valuable eSport companies (by the end of 2018) Team (Founded)

Primary Owner/ Investors

Valuation (M)

Primary Games

# Players/ Teams

Cloud9 (2012)

Jack and Paullie Etienne (founders) and financed by Series A Investors (in 2017 - $25M) and B Investors (in 2018 - $50M)

310

League of Legends, Overwatch, Fortnite, Counter-Strike: Global Offensive, Rainbow Six Siege, Clash Royale

92/11

Team SoloMid (2009)

Andy Dinh (Principal Owner) and Series A Investors ($37M; Bessemer Venture Par tners accounted for $25M of the funding)

250

League of Legends, For tnite, PlayerUnknown’s Battlegrounds, H1Z1, Clash Royale, Hearthstone

39/7

Team Liquid (2000)

aXiomatic Gaming (Parent Company), and Series A Investors ($16.5M), B Investors ($25M), C Investors ($26M), and $21.5M (from undisclosed investors)

200

League of Legends, Counter-Strike: Global Offensive, DOTA 2, Fortnite, Hearthstone, Rainbow Six Siege, Clash Royale, PlayerUnknown’s Battlegrounds

65/14

Echo Fox (2015)

Rick Fox (Founder), and New York Yankees ($10M invested in 2017), and $38M (from various sources)

150

League of Legends, H1Z1, Dragonball FighterZ, Injustice 2, Super Smash Bros, Street Fighter, Shadowverse

23/8

OpTic Gaming (2006)

Infinite Esports & Entertainment (Parent Company), and Texas Rangers co-owner Neil Leibman

130

League of Legends, Overwatch, Call of Duty, Counter-Strike: Global Offensive, Fortnite, PlayerUnknown’s Battlegrounds

52/6

Fnatic (2004)

Sam and Anne Mathews (Founder), and Serie A investors ($19M in 2019)

120

League of Legends, Fortnite, CounterStrike: Global Offensive, DOTA 2, FIFA, Clash Royale, Rainbow Six Siege

45/11

Gen.G Esports (2017)

Primary Investors: Kevin Chou, Kent Wakeford, Michael Li, Philip Hyun, and Arnold Hur)

110

League of Legends, Overwatch, PlayerUnknown’s Battlegrounds, Heroes of the Storm, Clash Royale

50/7

G2 Esports (2013)

Carlos Rodriguez Santiago, Jens Hilger (co-founder) and Serie A Funding ($24.6M)

105

League of Legends, Counter-Strike: Global Offensive, Hearthstone, Fortnite, Rainbow Six Siege, Rocket League, Clash Royale

53/11

Immortals (2015)

Meg Whitman and the family of Michael Milken, and Serie B funding ($30M)

100

Overwatch, Counter-Strike: Global Offensive, Clash Royale, Rainbow Six Siege

22/4

Mike Rufail and Ken Hersh

95

Overwatch, Call of Duty, CounterStrike: Global Offensive, Fortnite, Player Unknown’s Battlegrounds

69/7

Envy Gaming (2007)

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Figure 2. Most valuable eSport companies (by the end of 2018)

The top 10 most valued companies noted in Table 1, include Cloud9, Team SoloMid, Team Liquid, Echo Fox, OpTic Gaming, Fnatic, Gen.G Esports, G2 Esports, Immortals, and Envy Gaming. Cloud9, the most valuable eSport company in the world, is estimated to have a worth of US$310M, while the 10th most valuable company (Envy Gaming) is suggested to be at US$95M. In the case of Cloud9, the organization started initially as a family business and has attracted investors from the traditional sport and entertainment industry over the past few years. Notably, Cloud9 raised the largest funding offer from investors in the history of the eSports industry, with a reported investment of US$50M (Merwin, Sugiyama, Mubayi, Hari, Terry & Duval, 2018). Gen G Esports is a multigame eSports organization and parent company of the Overwatch League’s Seoul Dynasty Team, which raised US$46M from rounds of financing, which is second only to Cloud 9 (Merwin et al. 2018). While eSports is a young industry by most definitions, more than 350 firms (e.g., venture capitals, individual investors, financials firms) invested in eSports start-ups as of mid-2019 (Anekal, 2017). Of those investments, over half (57%) were from the US, followed by Europe (13%). Further, less than 1/5th of the investors financed more than one eSports start-up, suggesting that most 48

The eSports Economy

of these investments are part of a larger portfolio or one-offs, as opposed to a coordinated eSports industry investment plan (Merwin et al. 2019). As can be observed in Table 1, the average number of years that the top 10 most valuable eSport companies have operated in the business is 8 years; five of those companies are 6 years old or less as of 2019. The reality then is that these are young firms, early in their development. In terms of resources, these ten companies manage a total of 86 teams and 510 players, and each company participates in at least 5 different primary games. From a general investment perspective, these are positive signs of a young and growing economy that is attracting investment dollars.

Investment: Traditional Sport Investing in eSports A number of traditional sport team owners are investing in eSports, which is an interesting development from a number of perspectives. Examples include the co-owners of the Los Angeles Dodgers (MLB) and the Golden State Warriors (NBA) investing in Cloud9, owners of the Washington Wizards (NBA) and the Tampa Bay Lightning (NHL) in Team Liquid, co-owner of the Texas Rangers (MLB) in OpTic Gaming, owner of the New England Patriots (NFL) in Activision Blizzard, the New York Yankees’ (MLB) owners in Echo Fox, and a number of others. This long list is indicative of the large sports industry viewing eSports as part of the overall industry and is further evidence of the potential long-term investment value of eSports. The majority of the traditional sport team owners’ investments in eSports are staying close to their core business, as evidenced by the types of eSports games that they invest in. Akin to many business investment recommendations, related areas are recommended and thought to lead to improved returns for existing as well as new areas. The decision of these investors to stay close to their core business can be seen by categorizing eSport into three main genres based on the nature of the competition in that eSports game. The two most recognized genres of eSports are real-time strategy (RTS) (e.g., StarCraft) and First-Person Shooter (FPS) (e.g., Dota 2) games. The third genre is simulated professional sports (SPS) (Pizzo, et al., 2018), which is the virtual version of a traditional professional sport (TPS). Today, RTS and FPS are the dominant genres of eSports from an industry perspective (although not from a traditional sport investment one). For example, Merwin et al. (2018) reported that of the top 15 monetized PC and console eSports titles, 14 were RTS and FPS and only one (FIFA) was SPS. This analysis of the investments 49

The eSports Economy

made by traditional sports teams from 40 different countries in the eSport industry globally by 2019 suggests that, out of 374 total investments, 67% was invested in SPS, 16% in RTS, 13% in FPS, 3% in the other, and 2% in Fighting (Refer to Figure 3.0). Considering that SPS makes up a small fraction of the eSports market, this suggests that the majority of traditional sport team investments in eSports are staying close to their core business. The Dallas Mavericks NBA club, for instance, is investing more in its SPS Mavs Gaming, than into RTS games (e.g., StarCraft) and FPS games (e.g., Dota 2).

REVENUE IN ESPORTS INDUSTRY The eSports industry boasts millions of viewers and, now, a billion-dollar revenue stream. However, the reader may wonder about the sources of revenue in the eSports industry. While a varied set of revenue sources are expected to Figure 3. Investment holdings by game genre

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The eSports Economy

emerge as the industry evolves, one way of understanding revenue generation in eSport is by examining the sources of income of the major stakeholders. This includes the players, teams, leagues, and agencies, as well as the game developers. A brief discussion follows here of the most important of these stakeholders’ sources of income to provide an overview of revenue generation in eSports.

Revenue: Sources for Players eSports players generate income from at least six sources:

Salary Salary from the team that players sign with; this could be described as a base salary, like many employees receive in many jobs.

Prizing Cash prizes (aka prize money) from competing for cash prizes at tournaments. For example, a German professional Dota 2 player, Kuro Salehi Takhasomi, Figure 4. Player revenue sources

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The eSports Economy

earned over $4 million in tournament prizes with over $2 million won from a single tournament in 2017 (Berkeley Economic Review, 2018)

Subscription Revenues Subscription based revenues accrued to players who work with online platforms such as Twitch to live stream their games and viewers pay a monthly subscription fee. Twitch offers streamers several potential sources to generate revenue. Advertisements are the most common source of revenue for these streamers.

YouTube Views on YouTube can indirectly generate revenue for players. In these cases, streamers upload their recorded streams to YouTube and earn income through views that result, provided they are sufficient enough to generate the interest of sponsors or advertisers. Typically, when these revenues result, they come from endorsements that run during the player’s stream, as snapshots on their page, or from product placement (i.e., the equipment or accessories they use in their videos). A well-known and widely recognized example of product placement is the Mountain Dew fridge behind Ninja while he streams.

Donations Donations from loyal fans. As players stream/play, fans who are watching are known to give donations that range from a few dollars to thousands of dollars. These are often instigated by incentives provided by players/ streams encouraging their fans to follow in return for their attention. This is a source of revenue that exists in eSports that is very rare in other sports and entertainment industries.

Sponsorship or Athlete Endorsements For players with large followings or very successful performance records, brands will seek them out to sponsor the athlete. Brand will provide a financial revenue source/investment with the player in return for the right to associate with the player, use their likeness in their marketing, and seek to build on

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The eSports Economy

Figure 5. Team revenue sources

the images of that player for their own business objectives. Chapter 5 of this text examines eSports and sponsorship.

Revenue: Sources for Teams Below is an overview of the five general sources of revenue for teams (or clubs) in eSports. Sponsorship. Similar to player’s sponsorship, this source is generated from brands who seek to associate with the team/club. One form of sponsorship in eSports is jersey sponsorship, where a brand purchases the right to have their logo on the jersey of players on that team. For example, the energy drink company Red Bull and the smartphone company HTC have purchased jersey sponsorships for Cloud9.

Ticket Sales eSports organizations sell tickets to major events and generate revenue from those sales. In 2018, there were over 700 major events with generated ticket sales revenue close to US$55M (Merwin et al. 2018). Merwin et al. (2018) also reported that only 3.6% of the ticket revenue came from the biggest

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The eSports Economy

tournament of the year: The League of Legends (LoL) World Championship, suggesting a relatively balanced landscape of events.

Revenue Sharing from the League This source is similar to what is found in major North American team sports, where the league (e.g., NFL, NHL) will collect revenues and share them equally amongst the member clubs. League of Legends, for example, distributed a total of $4.9 million from their World Championships in 2018 to teams based on their final standings (eSports Earnings, 2018).

Subscription Revenue Subscription based revenues accrued to teams/clubs often via rights fees paid at the league level. For example, 43 million viewers watched the LoL finals (Neilson, 2019). In comparison, 31 million tuned in for Game 7 of the 2016 NBA finals. Newzoo (2019), the global eSports audience is projected to reach 400 million viewers by the year 2020, with roughly half of the viewers being made up of eSports Enthusiasts and the other half of Occasional Viewers. As noted earlier, China, the U.S., Brazil, and South Korea have the most eSports Enthusiasts.

Merchandise Sales by Club and or League This source is driven by the sales of club/league merchandise or licensed club/league merchandise, where a percentage of the sale will go back to the club. This includes merchandise items of many descriptions, including (but not limited to) branded jerseys, keychains and hats.

Revenue: Sources for the Game Developers Game developers are a key demographic in the eSports industry and tend to be organizations which generate revenues from the much broader field of video games. Specific to eSports, they often host tournaments with a cash prize pool, and they depend on at least six major sources of revenue to offset their costs and generate income from these events:

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The eSports Economy

Figure 6. Game developer revenue sources

Advertising Advertising revenues selling promotional space to brands. This advertising revenue is normally paid per impression (i.e., number of clicks or ratings points on viewership, etc.) via eSports content that is streamed or watched live.

Broadcast Rights Broadcasting rights from media companies for eSports content. In 2016, for example, Riot Games sold streaming rights through 2023 to BAMTech (a streaming company owned by Major League Baseball and Disney) for a reported $300M (Robichaud, 2016).

In-game Purchases In-game purchases from players playing and purchasing skins or other ingame benefits. In 2017, for example, Activision Blizzard reported $4 billion in revenues from in-game purchases (Chalk, 2018). One of the main in-game purchases is team-customized digital skins (different visual appearances for on-screen characters).

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The eSports Economy

Crowdfunding Crowdfunding from followers of celebrity players or major teams. This is a significant source of revenue to eSports prize pools. These go towards prize money for winning teams/athletes at events/leagues. It is also relatively unique to eSports. For example, the first tournament to utilize this model was Dota 2’s The International (TI). Here, the tournament organizers called upon fans to provide crowd funding to support its $20M prize purse to attract the best gamers in the world. Importantly, fans who donated to the event would receive in-game products such as skins, taunts, or banners that pertain to their favorite professional team, as part of the package to attract them to donate.

Ticket Sales eSports organizations sell tickets to major events and generate revenue from those sales. In the case of game developers, in 2016, a total of US$32 million revenue was generated via eSports events ticket sales worldwide (Forbes, 2018).

Sponsorship For games with large followings or very successful tournaments, brands will seek them out to sponsor the events/game, where they provide a financial revenue source/investment to the game developer in return for the right to associate with the game and/or event.

Revenue: eSport vs Traditional Professional Sport Leagues It should be noted that, in line with the definition of eSports adopted in this book, the eSports market includes revenues and viewership from professional competitive gaming content only. With that note, the highest eSport revenue source is sponsorship followed by media rights, sales of merchandise, and tickets (Merwin et al. 2018). In 2018, 38% of the eSport revenue was generated from sponsorship, 14% from media rights, 9% from ticket sales, and 39% from other sources, such as merchandise sales and game publisher fees (Merwin et al. 2018). It is interesting to note that the proportion of revenue coming from sponsorship is much higher than that observed in other sports. For instance, on average, the proportion of sponsorship revenue from the total 56

The eSports Economy

generated in the ‘4 Bigs’ is 10%, almost 4 times less than eSport sponsorship revenue of 38% (Pro Sports, 2018). Sponsors in the eSport industry come from different sectors of the global economy, namely, apparel and retail (e.g., Nike), hardware (e.g., Intel), automotive (e.g., KIA), telecom (e.g., T-Mobile), payment processing (e.g., Mastercard), insurance (e.g., State Farm), soft drink (e.g., Coca Cola), gaming (e.g., Secret Lab), and streaming platforms (e.g., Spotify). According to Naz Aletaha, the Head of eSports Partnerships at Riot Games, “our audience is predominantly digital first and that gives us different opportunities to engage in meaningful ways” (Pei, 2019). Over the next three to five years, meanwhile, media rights revenue in eSport could grow by 11.5% to roughly $449 million by 2022, which is more than twice the growth rate of sponsorship and advertising, at 5.5% (Merwin et al., 2019). Media rights revenues are typically generated through a media property and the resulting revenue is paid to the industry stakeholders in order to broadcast or stream eSports content. Merchandise and ticket revenues are also increasing as the popularity of live events grows and as eSports enthusiasts buy an increasing amount of merchandise and sponsor products (Refer to Figure 7).

COSTS IN THE ESPORTS INDUSTRY With eSports increasingly becoming a stable business with considerable long-term potential, large sums of money – as noted - are being invested in the industry and a significant amount is coming as long-term investments. Efforts towards team marketing and team performance are crucial for a promising return on investment in the industry. As such, the costs involved are related to “on-the-field” performance (e.g., training facilities) and offthe-field performance/marketing (e.g., expanding fan base). Four specific areas of costs can be identified. The first two (namely, salaries and training) are investments towards the performance of the team on “the field.” The third area of cost is the building of fan bases through marketing and content creation. As much as teams generate revenue from sponsorship and ticket sales, they are also generating income from sources such as subscription and merchandise sales. These are taken care of by a team of behind-the-scene professionals who work on content creation that appeals to fans; a significant amount of investment goes into marketing/off-the-field performance. There are also, of course, behind the scene game day operators and event manager similar to those found in more traditional sports who make the games actually 57

The eSports Economy

Figure 7. eSports revenue breakdown

take place. The final area of costs in eSports is the initial investment that investors have to make to gain an ownership stake—this is no different than any other traditional sport business. Each of these areas of cost are briefly discussed below.

Salaries and Player Remuneration With the popularity, acceptance and rapid growth of the eSport industry, teams and leagues are vying for best players. With an increased demand for the best players, salaries and remuneration have also increased. The average starting North America League of Legends Championship Series (NA LCS) player salary is now over $320,000, with more than 70% of the players performing on multi-year contracts (Heitner, 2018). By comparison

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The eSports Economy

in 2019, “the minimum annual salary for a rookie NFL active roster player with a one-year contract was $480,000” (CNBC, 2019). Salaries to coaches and other supporting staff also add to the cost, although these numbers are not publicly disclosed.

Training Facilities eSports teams are investing in training facilities and gaming houses to help players compete at the highest level. While some teams invest in training facilities such as Alienware Training Facility for Team Liquid, other teams arrange gaming houses for their players with full living and training services (i.e. accommodation, meals, cleaning and medical service).

Off-The-Field Performance Off-the-field performance is as important as on-the-field performance in any sport, including eSports. This is particularly true in eSports due to the role off-the-field performance plays in maintaining and expanding the fan base. Off-the-field performance refers to investment that goes towards the marketing and content creation efforts, done by internal staff, player agents, or team/league marketing agencies, that carry out video editing and graphic design for social media platforms with the goal of promoting players, and selling in-game merchandise such as customized digital skins. For example, Flyquest, a team owned by the Milwaukee Bucks’ co-owner Wesley Edens and Fortress Investment Group, creates content around its veteran players and maintains its popularity, despite not being one of the top performing teams in 2019.

Initial Capital Outlays Not so long ago, eSports team owners struggled to raise funds from investors. As previously described in this chapter, over the past few years, a number of celebrities, traditional sport team owners, and high-profile athletes have been earnestly investing in eSport. These initial cash outlays are a cost of doing business in eSports.

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Research and Development Research and development is a major area of investment in eSports that takes a significant amount of investors’ money in the early phases of the game developing business. Particularly, while game developers introduce different games, not all games capture players’ interest and make a profit. The reality is that games often games fail to generate interest. As such, the cost of research and development is increasing as more developers seek to create and market games that become popular and develop into eSports leagues. In 2018, for example, the cost of R&D for Electronic Arts rose to $1.3B, up 10% from the previous year (Berkeley Economic Review, 2018).

RISKS AND CONCERNS IN ESPORTS INDUSTRY Publisher Power In eSports, the publishers (i.e., video game developers) have a considerable amount of power. For example, Riot banned teams from competing in its competition without any explanation or chance of appealing in 2016 (Volk, 2016). Most bans are based on merit, however, toxicity in the community can lead to false claims and unfairly banned accounts. The rules are set for 99.9% of all tournaments and sanctioned leagues. While it may differ from the core gameplay, each game has a set of “Professional Grade” rules that are implemented to promote a fair playing field and equal competition. Further, publishers determine if eSports can or cannot be sanctioned by the community and some have even showed resistance towards competitive play (e.g. Nintendo) (Doolan, 2018).

Inconsistent Player Bans Since banned accounts are facilitated by the developer (publisher), players who are banned are, for the most part, banned from competitive play, unless they are participating in an unsanctioned event. However, even at those events, players will never be able to turn “pro” as the developer will always block accounts if they find banned players trying to enter sanctioned tournaments. Valve’s VAC banned system is an example of how bans can be formulated systematically (Steam, n.d.). 60

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There Is No Clear Structure for Players to Make it to a ‘Professional League’ Contrary to professional sports with minor or development leagues, there is no clear pathway for gamers. The industry is still evolving and there are some procedures that scouts use to recruit and contract eSports players, but regulations are few and controls are limited. These recruiting efforts include scouting players from Twitch, identifying tournament winners, hosting tryouts, and player searches through leaderboards of a specific game. There is some talk of a coordinated effort to overcome this challenge. One example put forward by Esports.com involves the creation of a ‘university’ that will educate gamers and focus on their development into professional players by offering classes that focus on different aspects of gaming.

Sponsor Uncertainty Brands are still not confident to enter the industry as sponsors due to the “leap of faith” required. There is still not enough certainty for many of these brands. That being said, as the industry is still growing, the uncertainty that exists between sponsors, eSports athletes, and tournaments is slowly subsiding; but until there is clarity, sponsors will have concerns. For example, the eSports industry is much bigger in scale on the international level which may create issues for sponsors used to regional markets and who have to determine how they can segment the industry or their target market.

Game Popularity Turnover The turnover rate of games can be very high. The measure of turnover questions whether fans will remain loyal to game developers in the long run. Thus, past business models of developers that create games with a short-term plan (e.g., a new game every year) is now under scrutiny. Developers are constantly trying to update their games to evolve, while utilizing new and old aspects of the game. Casual players reap the benefits of new features, but professionals are constantly trying to adapt and learn new aspects of their respective game. The professionals (high performance players) are clearly in a different context than the casual player.

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Metas are Challenging for Professional Gamers The metagame (or metas) are approaches that happen in a game, but that the player does not see or follow. They are either between matches or away from the storyline. This may be fun and interesting to the casual player, but it is a challenge (perhaps unfairly) to the professional one. Recently, the notion of Metas has also seen a shift in the eSports industry, as they are constantly being advanced by their developer to appease fans and add new aspects to the game (Cocke, 2018). These constant changes may come at the cost of the performance of professionals who need to adapt rapidly in order to be/ remain at the highest level. This would be akin to changing the basketball to a tennis ball two weeks before the NBA finals.

Player Naivety and Turnover Many eSport gamers compete in their rooms or smaller lounges when qualifying for tournaments. There are several concerns with these settings. For example, the performance of players in their room might not necessarily translate to the big stage. This issue has recently been given attention and team owners are working to build training facilities for teams. In connection to this, the turnover and volatility of players is another challenge in eSports industry. The playing careers of top gamers can vary with some top gamers seeing more lucrative options in streaming and in being influencers or media figures, than in competing for professional teams (Nordmark, 2018).

CONCLUSION This chapter introduces and describes the eSports economy as it is today. It is an early stage, growing industry with strong future indicators. For the stakeholders within the industry, there are considerable risks and uncertainties to build contingency plans around. What remains is a long list of discussions and future research related to the economy of the industry and the economic outcomes of its stakeholders.

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FUTURE RESEARCH DIRECTIONS The eSports economy has exploded into a billion-dollar business, and many analysts believe it remains largely untapped. As a result, eSports has attracted new investors, sponsors and fans, but many questions remain about its ability to monetize its growth and the implications of future technologies on the eSports economy. Below are simply a few research questions that introduce diverse avenues of research. 1. As it grows, will eSports follow a similar monetization pathway as traditional sports? 2. How will Artificial Intelligence influence the future of eSports? 3. How will emerging mobile technologies influence the future of eSports? 4. How will Virtual Reality influence the future of eSports? 5. What role will eSports gambling play in the future?

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REFERENCES Anekal, M. (2017, August). The list: The most active vc’s in esports. Medium. Retrieved from https://medium.com/tnlmedia/the-list-the-most-active-vcsin-esports-91027a1670ba Berkeley Economic Review. (2018, October). The explosive growth of esports. Retrieved from https://econreview.berkeley.edu/the-explosive-growth-ofesports/ Chalk, A. (2018, February). Activision Blizzard earned more than $4 billion on in-game purchases in 2017. PC Gamer. Retrieved from https://www. pcgamer.com/activision-blizzard-earned-more-than-4-billion-on-in-gamepurchases-in-2017/ CNBC. (2019). Here’s what the average NFL player makes in a season. Retrieved from https://www.cnbc.com/2019/02/01/heres-what-the-averagenfl-players-makes-in-a-season.html Cocke, T. (2018, October). Audience? Esports execs weigh in. The eSports Observer. Retrieved from https://esportsobserver.com/hive-recap-esportsorganization-recap/ Doolan, L. (2018, July). Masahiro Sakurai isn’t concerned about competitive aspect of super smash bros. Nintendo Life. Retrieved from http://www. nintendolife.com/news/2018/07/masahiro_sakurai_isnt_concerned_about_ competitive_aspect_of_super_smash_bros eSports Earnings. (2018). Summary. Largest prize pools. Retrieved from https://www.esportsearnings.com/leagues/190-lol-world-championship Forbes. (2018, July). How much can the eSports market grow in 2018? Retrieved from https://www.forbes.com/sites/greatspeculations/2018/07/11/ how-big-can-esports-grow-in-2018/#6067853b6a36 Gray, A. (2018, July). The explosive growth of eSports. World Economic Forum. Retrieved from https://www.weforum.org/agenda/authors/alex-gray Heitner, D. (2018, May). A look inside Riot Games, from $320,000 player salaries, to using esports as a catalyst for sales. Forbes. Retrieved from https://www.forbes.com/sites/darrenheitner/2018/05/02/a-look-inside-riotgames-from-320000-player-salaries-to-using-esports-as-a-catalyst-forsales/#31fc72d12c6a 64

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Merwin, C. D., Sugiyama, M., Mubayi, P., Hari, T., Terry, H. P., & Duval, A. (2018, October 12). The world of games eSports: From wild west to mainstream. Goldman Sachs. Retrieved from https://www.goldmansachs. com/insights/pages/infographics/e-sports/report.pdf Neilsen. (2019). Esports playbook from Brands. The Neilsen Company. Retrieved from https://www.nielsen.com/wp-content/uploads/sites/3/2019/05/ esports-playbook-for-brands-2019.pdf Newzoo. (2019). Global eSport market report. Retrieved from https://newzoo. com/insights/trend-reports/newzoo-global-esports-market-report-2019-lightversion/ Nordmark, S. (2018, July). Live streamer of competitive gamer- which career makes the most sense? Dot eSports. Retrieved from https://dotesports.com/ general/news/esports-vs-streaming-money-career-31144 Ozanian, M., & Settimi, C. (2018, October). The world’s most valuable esports companies. Forbes. Retrieved from https://www.forbes.com/sites/ mikeozanian/2018/10/23/the-worlds-most-valuable-esports-companies1/#d0bf4fa6a6e7 Pei, A. (2019, January). Here’s why esports can become a billion-dollar industry in 2019. CNBC. Retrieved from https://www.cnbc.com/2019/01/20/ heres-why-esports-can-become-a-billion-dollar-industry-in-2019.html Pro Sports. (2018, January). NFL sponsorship revenue totals $1.32 billion in 2017-2018 season. IEG Sponsorship Report. Retrieved from http://www. sponsorship.com/Report/2018/01/29/NFL-Sponsorship-Revenue-Totals-$132-Billion-In-20.aspx Robichaud, A. (2016, December). League of Legends stream sold for $300M. TSN. Retrieved from https://www.tsn.ca/league-of-legends-streaming-rightssold-for-300m-1.633240 Steam. (n.d.). Valve anti-cheat system (VAC). Retrieved from https://support. steampowered.com/kb/7849-RADZ-6869/ Volk, P. (2016, May). Riot bans renegades, team impulse and team dragon knights from sanctioned League of Legends play. Rift Herald. Retrieved rom https://www.riftherald.com/2016/5/9/11637402/renegades-tip-tdk-leagueof-legends-ban

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eSports Media ABSTRACT eSports media, in contrast to legacy media (print, linear broadcasting), are almost exclusively creators and disseminators of digital content. They can take the form of live competitions on streaming platforms such as Twitch, videos of gameplay and interviews on YouTube, or coverage of the latest League of Legends Spring Championship. The gaming industry is bullish on the potential for eSports growth out of the endemic online culture associated with gaming. However, the value of eSports media rights compared to traditional sports pales in comparison. This chapter considers the current and future landscape of eSports media, starting with an examination of Twitch’s pivotal role in promoting and supporting competitive gaming on the streaming platform. It will describe the integration between game publishers and their extensive “do-it-yourself” media operations, as well as the ways independent endemic and mainstream media cover the industry and monetize content.

INTRODUCTION In 2007, Justin Kan attached a webcam to his head and began live-streaming every second of his day, including an interview with National Public Radio: “This is really what it’s like to be Justin Kan or ... follow Justin Kan around all day every day” (Sydell, 2007). At a time when MySpace was just as significant as Facebook, Kan’s Justin.tv seemed to be more aligned with the phenomenon of reality television than a pioneering digital DOI: 10.4018/978-1-7998-1538-9.ch004 Copyright © 2020, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

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innovation. Nonetheless, just three weeks into the venture the website was already bringing in steady advertising revenue. Kan told NPR that he had plans to expand and had already received a $50,000 investment from a venture capitalist, who explained “their ultimate plan is to make a sort of a Web TV channel that has hundreds of different people walking around with cameras on their heads” (Sydell, 2007). However, instead of an army of reality TV stars, it was gamers such as Tyler “Ninja” Blevins who began to use the site to share video gaming activities in real time, and Justin.tv pivoted to eSports, launching Twitch in June 2011. Three years later, Twitch was purchased by Amazon, outbidding rival offers from Google. Amazon chief executive, Jeff Bezos, explained to The New York Times what might not have been obvious to a mainstream business audience: “Broadcasting and watching gameplay is a global phenomenon and Twitch has built a platform that brings together tens of millions of people who watch billions of minutes of games each month” (Wingfield, 2014). This investment has paid off as Twitch has become a giant in ecommerce. In 2018, Twitch had the 6th highest streaming traffic worldwide after Netflix, HTTP Media Stream, Raw MPEG-TS, and Amazon Prime; more than Facebook Video (Geeter, 2019). In considering the nexus between eSports and media, Twitch is not only a highly profitable pioneer in eSports dissemination, it has established itself as an intrinsic component of the business model for game publishers, leagues, players and the emerging independent media that cover professional gaming. Some credit the explosion in the popularity of eSports with the advent of Twitch: “When it comes to the broadcast of big events, they have a stranglehold on the market… just refer to them as the ESPN of eSports” (Breslau, cited in Hoppe, 2018). This chapter considers the relationship between eSports and the unique mediasphere in which it has emerged; one that is digitally native, deeply integrated, often user-generated in the true spirit of Twitch streamers, and distinct from traditional media forms. It brings together millions of content providers with hundreds of millions of viewers in an online dialogic relationship that has never existed, until now.

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BACKGROUND Twitch and the Streaming Model Twitch is to eSports and gaming what Google is to search engines. There are other platforms that offer similar services, but they lag behind in just about every measure of impact. In Alexa’s ranking of global websites, Twitch comes in just behind Netflix and LinkedIn at number 26, one spot ahead of Pornhub. com (Alexa.com, 2019). None of its main competitors in eSports and video game streaming appear in the top 50. At the time of this writing, Twitch averages 2.2 million daily broadcasters or streamers and 15 million daily viewers; 41,000 concurrent broadcasters/streamers and 1.1 million concurrent viewers (CCV) (Iqbal, 2019). At peak hours its CCV numbers outpace some of the top-rated US cable channels CNN and MSNBC (Taylor, 2018). An analysis in early 2018 that looked at growth in the numbers of concurrent streamers and viewers, underscored Twitch’s domination by its chief rival, Google owned YouTube Gaming Live, and while YouTube witnessed growth of 343%, Twitch also grew by 197%, and YouTube Gaming still represented about a third of the Twitch totals (Hicks, 2018). Refer to Figure 1 to compare eSports media to other media platforms.

What Exactly Is Twitch? At its essence, Twitch is a live-streaming platform “where people watch gamers play games,” (Wulf, Schneider, & Beckert, 2018, p. 2). People (streamers) can launch their own channels and with a webcam and often a headset microphone, livestream themselves playing games and offering commentary for audiences that might number in the single digits or many thousands. Twitch uses algorithms to make content suggestions to users, facilitating “navigation through several streams via a sidebar with an overview of (a) followed streamers who are online, (b) streams that friends are currently watching, (c) recommended streams (selected by algorithms), and (d) a search bar for further stream search” (p. 3). Twitch is also interactive, allowing viewers to comment or ask questions in a chat sidebar, and streamers, in turn, can react to the posts. Thus, Twitch also becomes a forum for gaming and eSports fans to share their views with each other.

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Figure 1. Twitch and Youtube gaming larger than most platforms

Twitch has built features into the program to monetize viewer interests in a several ways. Twitch has a mechanism whereby viewers can make donations to the streamers they follow. As part of the interaction that occurs, streamers will offer to complete certain tasks or play certain games in exchange for a contribution. There is also a ‘Cheer’ function allowing “viewers to collect ‘Bits’ [worth one cent] on their accounts by either watching ads or buying them directly from Twitch… and those can be donated to streamers as another way to tip them” (Miceli & Lax, 2019). Streamers can also draw revenue through a base subscription to their channel for a fee of $4.99 and this allows subscribers to comment in the channel’s chat. If the streamer has engaged the Twitch settings that way: “With a sense of community being one of Twitch’s most essential aspects, having access to participate in a channel’s chat is often seen as valuable to a viewer” (Miceli & Lax, 2019). Streamers can also include advertisements in their streams as another source of income, though as in linear broadcasting, too frequent commercials will drive viewers away from the channel. Brand sponsorships are another source of income for individuals or organizations that stream on Twitch. Twitch 69

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recognizes streamers with significant audiences bring thousands of viewers to the platform and rewards them as revenue sharing ‘Twitch partners’ who number 27,000 (Iqbal, 2019).

Twitch and eSports Today Twitch is still a place where people go to watch gamers play games, but often on a grander scale and with a definite focus on eSports. An analysis of the top 100 Twitch streamers in 2018 (Social Blade, 2019), featured more prominently in Chapter 6, finds 54 of those channels belong to eSports athletes or former competitors, game publishers, individual eSports leagues, or eSports ‘casters’ (the vernacular for on-air gaming host and commentators). Twitch is where eSports fans go to see the top competitions live-streamed, or to find videos of those events posted as video-on-demand. They can also find highlights and interviews with the competitors, similar to mainstream media coverage featured on web sites such as Sports Illustrated’s si.com. Moreover, both endemic media – those dedicated to eSports and gaming and (to a lesser extent) mainstream media provide content on Twitch through their own channels. This includes organizations such as Dot Esports, Polygon, Kotaku and even ESPN. However, the most viewed channels on Twitch relate to eSports competitions, the live broadcasts of professional competitions and tournaments. These channels are often owned by the game publishers, who might also own the eSports leagues and provide the casters and technical crews to produce the live events. In fact, it is the game publishers who are deeply integrated in the dissemination of eSports media content: They often have a stake in league ownership, organize and oversee live events, produce the live feeds of the competitions, and draw additional viewers with produced content available on demand on their channels. Twitch and YouTube Gaming shared in the streaming of the world’s four most watched eSports events in 2018: League of Legends World Championship Finals 2018; the ELEAGUE Major: Boston; The International 2018 from DOTA 2; and the Overwatch League Finals, drawing “a mammoth 190.1 million hours (21,700 years) worth of live streams” according to eSports analytics firm Newzoo (Impey, 2018). To put it in context, eSports pundits like to compare the viewership for the biggest gaming audience, the LoL World Championship, with the most watched sporting event in the United States annually, the National Football League’s Super Bowl. In 2018 the LoL Worlds drew 99.6 million viewers for the final 70

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series, compared to 103 million for the 2018 Super Bowl (Mickunas, 2019). Refer to Figure 2. for an overview of the growth of Twitch viewership hours between 2013-19. For traditional, mainstream media the audience data are impossible to ignore. However, while ESPN, Disney and TBS have started to bring the traditional sports broadcasting lens to eSports, Twitch has staked a position as the gatekeeper and dominant media hub for gaming and eSports; its “consumer-driven, grassroots rise” establishing it as “the de facto source for gamer-spectator entertainment” (Burroughs & Rama, 2015, p. 2). However, the range of content on Twitch and the nature of the experience, is quite different than, for example, Monday Night Football. On Twitch, audiences have the opportunity to interact with the broadcast and broadcaster in a variety of ways, principally through the chat stream but also through other features specific to game viewing. Figure 3 compares eSports to traditional sport league viewership.

More Than Simple Broadcasting Research has found that Twitch’s popularity is driven by the many purposes it serves for gaming and eSports, as a “sportscast, social network, video game, and teaching video – Twitch is a complex medium and by far more than just a broadcasting platform” (Wulf, Schneider, & Beckert, 2018, p. 2). Rolling Stone magazine has described Twitch Chat as the “definitive language to talk about the games industry”; the ratings company Nielsen highlights the Figure 2. Total hours watching Twitch

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Figure 3. eSports media vs. traditional sport media

access that chat provides: “Due to an eSports athlete’s ability to both play professionally and stream their own content, fans have the chance to experience watching their favorite player compete as well as virtually hanging out with them while they stream” (Nielsen Esports, 2017, p. 18). From a research perspective, it is difficult to separate how much of Twitch’s success is due to the popularity of eSports, or how the rise of eSports is tied to the growth of Twitch. However, scholars have underscored aspects of the Twitch experience that are unique from a media perspective, and appeal to its participants. At its broadest level, Twitch offers a sense of belonging, “a site for participatory play and emerging forms of community” (Hamilton, Garretson, and Kerne (2014) cited in Burroughs & Rama, 2015, p. 2). One study looking at consumer behavior among gamers, notes that watching television has typically been a “unidirectional and passive activity,” but streaming on Twitch offers “a unique relationship between the media creator and media consumer, thus facilitating communication between the two” (Sjöblom, Hamari, Hassan, Macey, & Törhönen, 2019, p. 7). That research suggests, in some cases, that social engagement is what the audience is looking for; especially for those who follow channels with fewer than 500 viewers (p. 12). The researchers contend this has become a condition of digital existence: 72

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We constantly spend more time engaged with online services that form the basis of a digital ecosystem, one that has become a second home for the generations of digital natives. Through the development of digital collaborative culture, social media services and continuously developing technology, online behaviour on these online services has become a functioning hybrid of passive consumption and active production of media content. (p. 23) Wulf, Schneider and Beckert (2018) find this sense of community a kind of “social collective” not unlike “sports fandoms” in other sports, such as soccer (p. 6). They used an online survey to measure the perceptions of Twitch by the people who use it. On one level, viewers watch and interact with similarly interested fans, as well as experts who are generally past or present professional eSports players. Because the Twitch audience not only knows the games being streamed but plays them regularly, there is a desire to learn how streamers have mastered gameplay, a desire that serves as a big part of the draw: “Interacting with experts and the community, users may become comfortable, entertained, and because of discussing game strategies, they may learn and gain deeper understanding of the game” (p. 12). This is a distinct and important feature of eSports media consumption. One eSports executive explained to an audience of media industry personnel that the learning component simply is not a part of the fan experience in traditional sports such as football, where broadcasters are not “going to teach someone how to tackle… Millions of players enjoy these [video] games and they’re watching to learn how to score more, how to run this play, how to do this thing” (Takahashi, 2019). Similar to traditional media, the interactivity associated with Twitch, creates a “parasocial relationship (PSR),” a feeling of familiarity or “friendship” often connected with TV anchors or on-air hosts, a phenomenon associated with enjoyment (Wulf, Schneider, & Beckert, 2018, p. 5). Twitch’s regular live streaming schedules further allow this bond to build over time “similar to characters of a periodic TV show” (p. 5). In the case of eSports figures, this serves to build audience, not just for a specific channel, but associated leagues, game developers and live competitions, and as with other digital platforms, algorithms take cues from the established viewing patterns. While Twitch does allow for the posting of videos, it is most associated with live streaming in the same way YouTube is associated with recorded media. Its “liveness” “shapes the entertainment experience,” similar to traditional

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sports broadcasts, where “being part of a real-time live event is highly relevant for the audience’s suspense” (p. 4). The PSRs established through the Twitch experience further enhance that sense of suspense as viewers feel they know the players they watch in competition.

The Growth of Twitch The popularity of Twitch parallels other emerging digital media forms in that it is user-generated, draws on parasocial relationships established online and establishes intimacy in new ways. The raw authenticity of YouTube videos and many podcasts inform approaches to media content across platforms. Streaming always features strong elements of voice, usually players, streamers or casters speaking extemporaneously, unscripted and familiar, especially for their regular viewers. Their perspective is almost always in the first-person, and their voices become familiar: “Voice is the intimate key to audiences’ hearts. By listening to detailed personal experiences of ‘others’, listeners become connected to the people whose stories they share” (Lindgren, 2016, p. 27). Online media platforms are not subject to the regulatory prohibitions on content seen in the terrestrial broadcasting world, removing additional filters on what people can say to an audience. Psycholinguists suggest the use of curse words are “especially meant to communicate the situation we are confronted with deeply affects us,” and sharing that vulnerability of emotion can be an expression of intimacy (Vingerhoets, Bylsma, & de Vlam, 2013, p. 290). Swearing is frequently featured in any number of Twitch streams (despite provisions of the Terms of Service) and generally regarded as authentic rather than offensive. In fact, a review of content in online news site, VICE, its salty discourse was described as “witty and sarcastic, comfortable with swearing… familiar as a pub discussion with your hilarious — maybe already tipsy — but still well informed mates” (Sampaio-Dias & Dennis, 2017). Twitch viewers might similarly regard their time on their favourite Twitch channels as familiar, hilarious and informative encounters with their gaming pals. However, with Twitch, there is a much higher degree of interaction: “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 and emote. They can’t stop” (Takahashi, 2019). Figure 4 demonstrates the growth of both Twitch viewers and channels between 2013 and 2019. 74

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Figure 4. Twitch key performance indicators: viewers and channels

Twitch and the eSports MediaSphere Twitch is the hub of the eSports mediasphere. Game publishers, who benefit from the increased popularity of their products, are also responsible for significant amounts of news and information circulated online and in social media about the competitive gaming industry. In the era of user-generated media content – blogs, YouTube videos, “selfies” and podcasts – game publishers have taken on the role of media producers. They provide live broadcasts of events with their own staff and facilities, and produce feature content for eSports fans interested in stories, opinions, and developments in the competitive gaming world, thus filling a void left by traditional media uncertain about competitive gaming. Game developers have had a hand in establishing eSports leagues, teams, tournaments and sponsorship deals. They have become de facto media organizations, not just promoting their products, but establishing alternative revenue streams related to their eSports media content. In fact, game developers such as Riot Games, or the leagues featuring their games (Fortnite, Overwatch), operate some of the most popular channels on Twitch. In this model, eSports’ key stakeholders have invested heavily in all aspects of media production, owning the venue for events, studios and media production facilities to broadcast competitions and associated programming, and hiring and maintaining professional media personnel – writers, color commentators, and casters – to produce and disseminate the content. They 75

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Figure 5. Top 25 games by live viewing on Twitch

avoid the traditional media gatekeepers and share content directly with the audiences. To give you a sense of scope, Figure 4 provides an overview of the most popular eSports by viewership and platform.

Vertical Integration Today, there is significant vertical integration through eSports leagues to media content. The structure is replicated throughout, but for discussion purposes consider the Overwatch League, owned by gaming giant Blizzard Entertainment. In 2017, the company opened Blizzard Arena in Burbank, California, retooling space that used to house The Tonight Show with Johnny Carson, just one component of a 74,000 square foot, five-level media complex that includes: …a second studio for additional programming, two control rooms and an “observer room”, a shoutcaster announce booth, nine edit suites, private practice rooms for all 12 Overwatch teams, “dugouts” for both competing 76

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teams, multiple press rooms, vast stretches of office space (including Jay Leno’s former digs), and much more. (Dachman, 2018) A full staff of technicians, producers and casters utilize the creative space to produce both the live and on-demand content in-house for the Overwatch Twitch channel, the Overwatch app, and the website, OverwatchLeague.com. Blizzard’s ability to promote its own league – it takes in $20 Million per franchise – and bolster game sales adds substantially to the company’s bottom line. However, high-end media production facilitates lucrative agreements for media rights, such as Blizzard’s $90 Million dollar, two-year streaming deal with Twitch (Dachman, 2018). The Overwatch League is also starting to air on mainstream networks in recent years (see below). In traditional sports there are many examples of professional teams having a stake in media operations supporting their leagues and franchises both at a national (NFL Network, NHL.com) and local level (the New York Yankees’ YES Network.com). Canadian telecommunications companies Rogers Communication and BCE Inc. are the principal stakeholders of Maple Leaf Sports and Entertainment Ltd., which owns a number of sports assets, including the Toronto Blue Jays of Major League Baseball, the National Hockey League’s Toronto Maple Leafs and the Toronto Raptors of the National Basketball Association. Both companies broadcast games for these franchises on their television networks. Rogers also holds the Canadian NHL broadcast rights.

The Challenge of Monetization The difference with eSports entities such as Blizzard is that the integrated media operations are almost entirely self-generated, endemic to eSports, and focused solely on its properties and brands; it is not producing programming about NASCAR or tennis and does not have the staff or facilities to do so. However, through their extensive operations, game developers generate the largest audiences for eSports, usually through livestreaming, most often on Twitch. This is in stark contrast to conventional sports media models, where sports leagues and organizations generate billions of dollars by selling media rights to existing media organizations that already possess the means of production and distribution. eSports events might generate live audiences rivalling the Super Bowl, but the revenue for broadcast rights is still a fraction of the NFL. According to Newzoo, eSports media rights generated $161 Million in 2018 and are 77

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projected to increase to $396 Million in 2021 (Newzoo, 2019). The broadcast rights to NFL games just on Thursday nights, will cost Fox Sports about $600 Million a year, $60 Million per game (Reuters, 2018). While the NFL stands out as the most valuable sports media property globally, eSports is still a long ways from drawing the kind of revenue seen in most major sports. In fact, eSports media rights do not even show up among the “top 20 properties by global media rights value” in 2018, where the 20th entry is the Indian Premier League (Sports Business Consulting, 2018, p. 4). Figure 6 is a forecast of media rights growth in both absolute dollars and as a percentage of eSports revenues. Conventional television networks have been cautious in taking on eSports broadcasts. MTV, USA Network and DirecTV tried to bring “competitive video gaming” to the airwaves in the early 2000s, but “the idea flopped” (Dave, 2015). G4 TV, another initiative to capture gaming culture, also could not figure out how to tap into the growing popularity of live eSports events in the broadcast world, before shutting down in 2014 (Brinks, 2015). The first real US primetime airing of eSports competition was in 2016 when CBS-owned network CW broadcast a series about competitors vying for the Mortal Kombat X championship (Castillo, 2016). Figure 6. eSports media rights spending

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That same year, Turner Broadcasting launched a much more significant venture, when it teamed up with William Morris Endeavor’s IMG Sports and Media Division to form a Counter-Strike: Global Offensive (CS:GO) series known as the ELEAGUE (Heitner, 2015). That fall, TBS began broadcasting CS:GO competitions on Friday nights. As noted above, the ELEAGUE Major: Boston is one of the top four most viewed eSports competitions on record, at the time of this writing (though most of audience was livestreaming the event). The ELEAGUE website prominently displays upcoming broadcasts on TBS and Twitch, and includes additional information through a “news” tab. NBCUniversal first became involved with eSports in 2017 with a Rocket League Tournament (NBC Sports Group, 2017). The competition was live-streamed on NBC Sports’ Twitch channels and was so well received that NBC returned the next year. The networks under the Disney corporate ownership umbrella, ESPN, Disney XD and ABC, have also started to embrace eSports broadcasting. In 2018, Disney signed a deal with Activision Blizzard “for live TV coverage of the Overwatch League” (Aielo, 2018). Playoff coverage aired on Disney XD and ESPN, but more significantly, the grand finals coverage became “the first broadcast of an esports championship on Disney’s flagship TV network, ABC” as well as on ESPN in primetime (Aielo, 2018). However, ESPN has embraced eSports with a more conventional approach to sports journalism. ESPN. com has a Web page devoted to extensive news of eSports. It has tabs for LoL and Overwatch, but dedicates a lot of space to all the major leagues and tournaments. The digital package features interviews and recorded instudio segments and analysis by ESPN hosts that are posted on a dedicated YouTube channel. Much of the content focuses on the professional ranks, but as the first broadcaster of a collegiate eSports tournament in 2017, ESPN dedicates space to the amateur college competitors, in line with its commitment to other NCAA sports, especially football and basketball. In fact, ESPN streams coverage of collegiate eSports on a dedicated Twitch channel. TBS’s approach has been born out of its experience in the world of entertainment; as a stakeholder in eSports ownership it does not seek to cover eSports but rather to promote its own interests, namely ELEAGUE events and broadcasts, either terrestrial or on Twitch.

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eSports News and Information Content The eSports mediasphere outside the user-generated streaming model can be broken down along endemic and non-endemic lines, that is, differentiated by whether the media are native to gaming culture or part of a wider focus. The distinction is best explained in the context of sponsorship, where support from a company such as Nintendo would be considered endemic, whereas a deal with Red Bull or Subaru is non-endemic. The endemic, independent media covering eSports are almost exclusively digital and often provide content on Twitch and YouTube, in addition to text, videos, still photos, graphics and podcasts on their websites. These organizations recognize eSports audiences are largely made up of digital natives, who seek their information online and in social media. There are differing approaches to the subject matter, as some focus more on gaming developments, news about popular streamers, while others cover the eSports leagues, teams, players and competitions in great detail. Representative of this model are operations such as Dot Esports, Polygon, The Verge, Dexerto, Kotaku, RPGamer, VP eSports, Blitz Esports, PC Gamer, The Esports Observer, Esports Insider, Twin Galaxies and Daily Esports. Revenue models are based on advertising, and in some cases include subscriptions, sponsorships and branded content. Media content is often aggregated from other sources, such as wire services, but also from eSports teams and leagues, game developers and eSports sponsors. It is important to point out eSports media are connected to the gaming industry in a way seldom seen elsewhere. The casters that provide the comment and analysis for streams or broadcasts are almost always paid employees of the game developers, and unlikely to say anything that might even be perceived as critical of the league or the competition. As with sports reporters in traditional media, eSports writers are often fans of the games, teams and players they cover leading to accusations of boosterism. To date, there has not been any scholarly analysis of the critical nature of eSports news coverage, nor its ethical grounding. However, concerns about the mental and physical health of eSports competitors, the concentration of power in the hands of the gaming companies, and toxic online behavior prompted eSports journalist Richard Lewis to state, “I love this industry, but someone has to talk about what’s wrong with it” (Barnett, 2018). In such a new field, and one facing uncertainty around business models,

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less controversial content might well be seen as a way to ensure access to eSports celebrities and traffic to web sites. The digital media world often relies on a precarious business model of chasing clicks, but some these eSports news ventures draw on activities that are eSports related but outside the front-facing media operations. For example, The Esports Observer entered a partnership agreement with Sports Business Journal in 2017. It positions itself as “the world’s leading source for eSports business news and insights… [offering] real-time business intelligence and reports, in addition to planning and hosting industry events and conferences” (The Esports Observer, 2019). The website is subscription based, and alongside its prolific digital newsgathering, offers data analytics related to streaming, audience and social media. Dot Esports aims to lead the news cycle on professional video gaming, but recognizes the wider gaming community as well. Its website states, “Dot Esports covers a cultural phenomenon, not just a sport,” providing its audience with “quality breaking news, investigative reporting, tournament coverage, and analysis of every important event within the esports world” but also “high-quality gaming guides, reviews of gaming gears, and interviews with top streamers” (Dot Esports, 2019). The “flagship” eSports news operation is part of the GAMURS network of websites. Those platforms sell data analysis and training materials for specific eSports competitors and enthusiasts (GAMURS, 2019). Blitz Esports not only covers eSports and gaming but markets its own app for League of Legends players, a “completely seamless robo-coaching experience for PC gaming” (Blitz Esports, 2018). One industry report contends there is “increased demand” for all forms of “performance data at both game and player level” (Nielsen Esports, 2017, p. 17), a demand generating income for some eSports media already. In a sense, endemic eSports media resemble video games publishers in drawing on revenue streams from a variety of integrated activities. Esports Insider generates news content on competitive gaming but also offers event planning services and acts as agents for eSports between businesses and rights holders (Esports Insider, 2019). In spite of the growing interest in eSports and opportunities for profitability, the eSports digital media environment has had its casualties, most prominently Joystiq, an early gaming site that came under the auspices of AOL, and Yahoo! Esports, which was shut down in 2016. Despite, the backing and institutional knowledge associated with some of the best known names in online commerce, neither entity could maintain the sort 81

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of sustainability their corporate leadership was looking for. However, struggles with financial viability are certainly not limited to eSports content providers. BuzzFeed and HuffPost, once seen as blueprints for nascent digital news media, have faced losses and layoffs. The duopoly of Facebook and Google continue to increase their share of online advertising sales, and industry experts say digital media companies need to find “multiple distribution channels” and additional revenue streams (Nicolaou & Nilsson, 2019). That seems to be the approach taken by games publishers and some of the endemic media organizations describes above. Among non-endemic media, aside from the broadcast/streaming ventures already referenced, mainstream news organizations such as The New York Times, The Guardian, are increasingly turning their attention to eSports. eSports generally does not garner the day-to-day incremental coverage of major league sports in North America, however, major news publications increasingly cover the “big” stories, such as the popularity of live events, the growing digital audiences, gender issues in eSports, or “firsts” such as the NBA 2K Draft. Publications with a technology focus, such as Motherboard and Wired, have long dedicated newsroom resources to eSports content. Other media that report on technology from a business or entertainment focus such as Forbes or Variety direct their journalistic attention to eSports as well. Additionally, news organizations are setting up subject tabs on their web sites for eSports and establishing “beat reporters” to stay on top of the latest developments. Even the Associated Press, the long standing news cooperative for the United States, has journalists dedicated to competitive gaming news.

CONCLUSION The promise of eSports as an industry often leads to bold predictions about specific areas for growth including media. Undoubtedly there are characteristics of eSports media that provide important lessons for all digital media at a time when business models are, more often than not, uncertain. At the same time, there are inherent challenges in disseminating eSports content that remain unresolved. The final section of the chapter examines the future of eSports media. eSports media serves an audience that is very well suited to the forms of digital content generally being disseminated. Consumers tend to be young; According to Statista, 75% of eSports viewers are between the ages 82

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of 18 and 35 (Statista, 2017). The well-known broadcast rating company Nielsen released a detailed report on eSports media opportunities in 2017, and provided comprehensive data on eSports consumers in the United States. It looked at data from the US and the United Kingdom, France and Germany and determined 7 in 10 eSports fans are male (Nielsen Esports, 2017, p. 6). What are more revealing are the entertainment preferences among eSports fans. They tend not to have much interest in traditional sports, spend more time playing video games than any other activity and most significantly, were “eSports fans are avid streamers and don’t watch linear TV” (p. 8). In other words, traditional media is less likely to reach an eSports audience. Millennials typically seek to maximize their digital access, and turn to live-streaming which “goes beyond the ability of other media to reach viewers wherever and whenever, whether from a home computer or a mobile device,” thus delivering “the constant connectedness expected by consumers today” (Sell, 2015, p. 40). The streaming and digital models at the core eSports media, easily connect with a younger demographic. This affords eSports media – in the form of a live-stream of an eSports championship, or a podcast devoted to LoL strategy – a tremendous advantage in delivering a desirable audience to advertisers and sponsors. Naz Aletaha, head of eSports partnerships at Riot Games, explained to a reporter “our audience is predominantly digital first and that gives us different opportunities to engage in meaningful ways” (Pei, 2019). The trend away from traditional linear television viewing is predicted to gain momentum, “and that means the broadcast and cable networks will need to make changes to their business models down the line” (Fitzgerald, 2018); eSports media are already there. However, there are some inescapable realities related to eSports media, especially live-streaming. Competitions can go on for many more hours than traditional sports broadcasts. For media producers, the challenge resides in the storytelling, finding a compelling narrative in the hours of content. eSports executives wrestled with this challenge as part of a recent panel discussion at the National Association of Broadcasters conference in Las Vegas. Matt Edelman, chief commercial officer at Super League Gaming, described the hurdles:

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…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?... 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. (Takahashi, 2019) Media producers for linear broadcasts can use editing techniques to pick the most compelling moments to include. Perhaps eSports media might incorporate more mediated content into what they stream. While most of the metrics related to eSports reflect ongoing growth and popularity, there is one area that has witnessed a decline. According to Nielsen, “the average eSports fan spent slightly less time watching eSports in 2017” (Nielsen Esports, 2017, p. 9). As an issue to resolve, however, this one will likely be addressed in due course, as eSports media craft matures. Milestones in the evolution of eSports have often been associated with ‘firsts’ related to traditional sports. The first millionaire streamer, the first television broadcasts, the first non-endemic sponsorships. Those firsts reflect a time when media, audiences and advertising were much different. For now, some eSports executives might envy the scale of a media rights contract for say, professional golf. However, in the coming years, linear cable networks will need to address shrinking audiences while the demand for streaming grows unabated. Given the shifting patterns of media consumption, eSports media might be better positioned for the new digital mediasphere than their legacy media brethren.

ESPORTS MEDIA: FUTURE RESEARCH DIRECTION This chapter has described the scope of media operations related to eSports, including endemic, in-house and independent organizations. It underscores the importance of Twitch, and more broadly eSports place

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in the online community. As with all media in the 21st Century, key questions around sustainable business models abound. At the same time, journalistic independence in eSports newsgathering is warranted, given the volume of content produced by in-house and endemic media teams. Future studies of eSports media content should assess the nature of the news discourse related to important issues, especially around racism, misogyny and homophobia (see Chapter 6). Further key research questions to consider include: 1. Which business models show the clearest signs of sustainability? 2. How are eSports streamers and broadcasters advancing their production techniques to capture audience? 3. What are the predominant forms of content being produced, and how are they evolving? 4. To what extent do eSports media groups adhere to journalistic codes of conduct?

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REFERENCES Aielo, C. (2018, July 11). Overwatch hits the big time with ESPN broadcast deal. CNBC. Retrieved from https://www.cnbc.com/2018/07/11/espn-to-livebroadcast-activision-blizzard-esports-overwatch-league.html Alexa. (2019, April 3). The top 500 sites on the web. Alexa.com. Retrieved from https://www.alexa.com/topsites Barnett, E. (2018). Esports: The price of the grind. CBS News. Retrieved from: https://www.cbsnews.com/video/esports-the-price-of-the-grind/ Blitz Esports. (2018). We are Blitz. Blitz Esports. Retrieved from https:// blitzesports.com/about Brinks, M. (2015, January 31). How the tragic downfall Of G4 TV explains why video game culture cannot survive on television. Ranker. Retrieved from https://www.ranker.com/list/what-happened-to-g4-tv/melissa-brinks Burroughs, B., & Rama, P. (2015). The eSports trojan horse: Twitch and streaming futures. Journal of Virtual Worlds Research, 8(2), 1–5. doi:10.4101/ jvwr.v8i2.7176 Castillo, M. (2016, January 26). eSports is coming to primetime. CNBC. Retrieved from https://www.cnbc.com/2016/01/26/esports-is-coming-toprimetime.html Dachman, J. (2018, March 7). Behind the scenes at Blizzard Arena: Inside the home of Overwatch League, the hottest property in Esports. Sports Video Group. Retrieved from https://www.sportsvideo.org/2018/03/07/behind-thescenes-at-blizzard-arena-inside-the-home-of-overwatch-league-the-hottestproperty-in-esports/ Dave, P. (2015, September 23). Competitive video gaming is set to return to TV in 2016. Los Angeles Times. Retrieved from https://www.latimes.com/ business/la-fi-turner-img-esports-20150924-story.html Dot Esports. (2019, January 3). About. Dot Esports. Retrieved from https:// dotesports.com/about Esports Insider. (2019, April 30). About us. Esports Insider. Retrieved from https://esportsinsider.com/about-us/

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Fitzgerald, T. (2018, November 28). Wow: Millennials watch more online video than traditional television. Forbes. Retrieved from https://www.forbes. com/sites/tonifitzgerald/2018/11/28/wow-millennials-watch-more-onlinevideo-than-traditional-television/#5e635ff54138 GAMURS. (2019, January 2). Shaping the future of gaming. GAMURS. Retrieved from https://gamurs.group/ Geeter, D. (2019, February 26). Twitch created a business around watching video games — here’s how Amazon has changed the service since buying it in 2014. CNBC. Retrieved from https://www.cnbc.com/2019/02/26/historyof-twitch-gaming-livestreaming-and-youtube.html Heitner, D. (2015, December 4). New Counter-Strike:Global Offensive (CS:GO) League announces $1.2 million prize pool. Forbes. Retrieved from https://www.forbes.com/sites/darrenheitner/2015/12/04/newcounter-strike-global-offensive-csgo-league-announces-1-2-million-prizepool/#4c5b3791613f Hicks, A. (2018, January 25). Streamlabs livestreaming Q4 report: Tipping reaches $100M for the year; YouTube dominates in streamer growth, increasing by 343% as Twitch rises 197% in 2017. Streamlabs. Retrieved from https:// blog.streamlabs.com/streamlabs-livestreaming-q4-report-tipping-reaches100m-for-the-year-youtube-dominates-in-4bf450fae536 Hoppe, D. (2018, June 9). The Rise and Importance of Twitch in eSports. Gamma Law. Retrieved from https://gammalaw.com/the_rise_and_ importance_of_twitch_in_esports/ Impey, S. (2018, December 7). Most-watched esports events record 190.1m streaming hours. SportsPro. Retrieved from http://www.sportspromedia.com/ news/esports-tournaments-record-live-streaming-hours Iqbal, M. (2019, February 27). Twitch Revenue and Usage Statistics (2019). Business of Apps. Retrieved from http://www.businessofapps.com/data/ twitch-statistics/ Lacey, K. (2013). Listening publics: The politics and experience of listening in the media age. Cambridge: Polity. Lindgren, M. (2016). Personal narrative journalism. The Radio Journal – International Studies in Broadcast & Audio Media, 14(1), 23-41. doi:10.1386/ rajo.14.1.23_1 87

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Miceli, M., & Lax, M. (2019, April 19). How streamers monetize Twitch popularity. The Esports Observer. Retrieved from https://esportsobserver. com/essentials-twitch-streamers/# Mickunas Mickunas, A. (2019, February 4). How does League’s Worlds viewership compare to the Super Bowl? Dot Esports. Retrieved from https://dotesports. com/league-of-legends/news/league-of-legends-vs-superbowl-viewernumbers NBC Sports Group. (2017, August 4). Twitch to livestream NBC Sports Group and Faceit’s Universal Open Rocket League esports tournament. NBC Sports Group Press Box. Retrieved from http://nbcsportsgrouppressbox. com/2017/08/04/twitch-to-livestream-nbc-sports-group-and-faceitsuniversal-open-rocket-league-esports-tournament/ Newzoo. (2019, January 12). Money spent on eSports media rights will triple by 2021. Newzoo. Retrieved from https://newzoo.com/insights/trend-reports/ Nicolaou, A., & Nilsson, P. (2019, January 25). Digital media struggles to make the numbers add up. Financial Times. Retrieved from https://www. ft.com/content/96c39e52-2013-11e9-b126-46fc3ad87c65 Nielsen Esports. (2017). The Esports Playbook: Maximizing your investment through understanding the fans. Nielsen Esports. Pei, A. (2019, January 21). Here’s why esports can become a billiondollar industry in 2019. CNBC Markets. Retrieved from https://www.cnbc. com/2019/01/20/heres-why-esports-can-become-a-billion-dollar-industryin-2019.html Reuters. (2018, January 31). Fox to pay more than $3 billion to broadcast ‘Thursday Night Football’ for five seasons, report says. CNBC. Retrieved from https://www.cnbc.com/2018/01/31/fox-reaches-5-year-deal-with-thenfl-to-broadcast-thursday-night-football.html Sell, J. (2015). E-Sports Broadcasting. Cambridge, MA: Massachusetts Institute of Technology. Sjöblom, M., Hamari, J., Hassan, L., Macey, J., & Törhönen, M. (2019). Esports: Final report. Tampere University. Retrieved from http://www.tut. fi/tutcris

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Social Blade. (2019, January 13). Top 100 Twitch Streamers - Sorted by Most Followed. Social Blade. Retrieved from https://socialblade.com/twitch/ top/100/followers Spangler, T. (2018, May 16). ‘Saturday Night Live’ 48-hour marathon to stream on Twitch. Variety. Retrieved from https://variety.com/2018/digital/ news/saturday-night-live-twitch-free-streaming-marathon-1202811813/ Sports Business Consulting. (2018). Global Media Report 2018: Executive summary and preview. London: SBG Companies Limited. Statista. (2017). Distribution of eSports fans in the United States in 2017, by age group. Statista. Retrieved from https://www.statista.com/statistics/532322/ esports-viewers-by-age-usa/ Sydell, L. (2007, April 11). Live From San Francisco, It’s Justin Kan’s Life. NPR. Retrieved from https://www.npr.org/templates/story/story. php?storyId=9516623 Takahashi, D. (2019, April 13). Our deep dive into how esport broadcasting is different from traditional sports. Venture Beat. Retrieved from https:// venturebeat.com/2019/04/13/our-deep-dive-into-how-esports-broadcastingdiffers-from-traditional-sports/ Taylor, H. (2018, February 14). Twitch surpasses CNN and MSNBC with record-breaking viewership. gamesindustry.biz. Retrieved from https://www. gamesindustry.biz/articles/2018-02-14-twitch-surpasses-cnn-and-msnbcwith-record-breaking-viewership The Esports Observer. (2019, April 15). Contact us. The Esports Observer. Retrieved from https://esportsobserver.com/contact-us/ Vingerhoets, A., Bylsma, L. M., & de Vlam, C. (2013). Swearing: A Biopsychosocial Perspective. Psihologijske Teme, 22(2), 287–304. Vox Media. (2019, April 30). Go deeper: About. Vox Media. Retrieved from https://www.voxmedia.com/a/go-deeper/about

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Wingfield, N. (2014, August 25). What’s Twitch? Gamers know, and Amazon is spending $1 billion on it. The New York Times. Retrieved from https://www.nytimes.com/2014/08/26/technology/amazon-nears-adeal-for-twitch.html?smid=fb-nytimes&WT.z_sma=TE_WTG_2014082 5&bicmp=AD&bicmlukp=WT.mc_id&bicmst=1388552400000&bicm et=1420088400000&_r=1&fbclid=IwAR07WeF9d1Z2rTqSppgLf3PL5fe 49AvrTQLl2C-YQ6V52My0f Wulf, T., Schneider, F. M., & Beckert, S. (2018). Watching Players: An exploration of media enjoyment on Twitch. Games and Culture, 1–19. doi:10.1177/1555412018788161

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Chapter 5

eSports Sponsorship:

Current Reality and Future Potential

ABSTRACT Previous chapters have articulated that eSports has arrived and is worth deep investigation and consideration. Billions of participants, a competitive gaming market, technology advances, and celebrity athletes are among many other positive characteristics. As seen in other properties with characteristics like this, sponsorship becomes a viable revenue source as brands are able to reach engaged consumers/fans and seek to achieve their own business objectives. This chapter introduces the marketing tactic of sponsorship, applies and examines it in eSports and assesses its future potential.

INTRODUCTION Sponsorship is an established tactic within the marketing mix of brands who are seeking to promote their products, services and ideas to specific target markets. Sponsorship is used by properties seeking revenues in many fields beyond professional and amateur sport, including festivals, events, music, municipalities, arts, causes/charities, and venues. However, within sponsorship, most studies report that the majority of sponsorship spend by brands is in sport sponsorship.1

DOI: 10.4018/978-1-7998-1538-9.ch005 Copyright © 2020, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

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Figure 1. Sponsorship spend

IEG (2018) estimates that sponsorship spend globally in 2018 would grow by 4.9% over 2017 to be US$65.8B of which US$40.2B was on sport sponsorship. Based on their estimates, IEG (2018) suggests more that another US$130B is spent globally on activating sponsorships (i.e., additional investments to insure the sponsorship is effective). PwC (2014) estimates that approximately 25% of the revenues in the sport industry are from sponsorship. By definition, a sponsorship is a promotional activity when one organization (the sponsor) provides an investment in the form of a financial and/or a product or service contribution to another organization (the sponsee/property) in exchange for the ability to promote their brands to their target group(s) (Meenaghan, 1991). In terms of the business aspects, sponsorship is the amount that a particular organization (normally a brand) invests directly as a ‘rights fee’ that is paid directly to the property in return for the right to associate with that property towards the pursuit of some marketing objective (O’Reilly, 2009). Well known examples are Nike’s sponsorships of many elite athletes (e.g., Michael Jordan, Raphael Nadal, Serena Williams) or beverage companies with major events (e.g., Coca-Cola and the Olympics Games). In these partnerships, the investor, or sponsor, pays the rights fee and is typically a corporation but these can also be a not-for-profit organization, government, association or agency. The property (sometimes called the sponsee) receives the investment as revenue to support their own operations and activities. In the sport industry, properties include professional sport, Olympic sport, amateur sport, grassroots sport and, now, eSports. It is important to note that the investment made by sponsors and the resulting resources received by properties, include cash as 92

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well as value-in-kind contributions (e.g., products or services), such as shirts provided for volunteers, food provided for participants, and a car provided to a sponsored athlete (Crompton, 2004).

Activation Activation, as noted above, is the further investment beyond the rights fee on various related activities (e.g., television commercials, accompanying web-based efforts, new packaging) to enhance the impact of the sponsorship. It is often measured by the ‘activation ratio’ which is a ratio that represents the spend beyond the rights fee (O’Reilly & Lafrance Horning, 2013). For example, if a sponsor was to purchase the rights to sponsor a particular eSports club for $100,000, then invest an additional $75,000 on activating that sponsorship, the activation ratio would be 0.75:1. Similarly, if a sponsors endorsed an eSport athlete with an annual rights fee of $10,000 but then spent $40,000 activating around that athlete, the ratio would be 4:1. Often the case with modern and digitally oriented properties such as eSports, activation has grown to be a two-level construct, that includes activation tactics that one would describe as ‘standard’ and those which could be called ‘innovative’ or ‘value-adding’ (Foster, O’Reilly & Davila, 2016). A traditional example, say for a sponsorship of a professional ice-hockey club, would see standard activation tactics such as rink board signage, commercials during telecasts, product placement, and in-venue sales promotions, while value-adding tactics might include a separate website designed to promote the partnership or an integrated social media campaign. The key learning about activation in sponsorship is that it must take place in order for a sponsorship to be effective, otherwise it would better be defined as an advertisement. This cannot be stressed enough, as of the important sponsorship concepts, activation is the most critical to undertaken in an effective way. Effectively administered activation will lead to positive evaluations, a focus on servicing and, in turn, increased investment from the sponsor. If done properly, strong activation leads to the clean portrayal of the sponsor and its association with the property that can breakthrough clutter and achieve sponsor objectives. As noted, activation techniques have become increasingly sophisticated over time, with most sponsorships now including standard tactics, such as packaging or accompanying media buys, included within any sponsorship budget. The innovative, creative or value-adding activation tactics are what most sponsors and properties are 93

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Figure 2. Activation tactics

focusing on today, such as creative promotions and social media activations that drive sales, branding and awareness for the sponsor. Weeks, Cornwell & Drennan (2008) describe these two types of activations as (i) activational communication (i.e., related contests or web-based promotions to promote involvement in the sponsored event) and (ii) nonactivational communication (i.e., passive activation such as signage or naming rights). Examples of activations include tactics related to the following areas: • • • • •

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Mass Market Awareness. Advertising (TV, radio, print, outdoor), event signage, public relations, banners, uniform logos, offsite events/ promotions, vehicle signage Spectator/Participant Awareness. PA announcements, logo placement, scoreboard promotions, on-site activations, direct marketing Digital. Social media, mobile, digital promotions, blogs, websites Experiential. Product sampling, hospitality, VIP passes/entertainment, product demonstrations Retail. Point of purchase (POP) displays, sales promotions, contests to drive in-store traffic, coupons, in-store displays

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• •

Image Transfer. Licensing, merchandising, sweepstakes, games/ video games, player/athlete sponsorship, coach sponsorship, league sponsorship Sponsor Internal. Employee programs, staff rewards/hospitality, contests

Servicing The second key concept in sponsorship, after activation, is servicing. Servicing is highly important because research shows that properties are often guilty of under-delivering on to their sponsors (O’Reilly & Huybers, 2013). Accordingly, servicing is the fulfillment of the expectations that the sponsor has of the partnership. Servicing involves the efforts of the property and, on occasion, agencies supporting the property to ensure that all elements of the sponsorship contract are delivered upon. Normally, it is the staff of the property or their agency who is responsible for these efforts. Typical service aspects include items required in the contract, such as offering access to database of participants, providing the signage requested, providing the media promised, and offering a final report.

Evaluation The third, of three, key practical concepts in sponsorship, is evaluation. Evaluation is the measurement of a given sponsorship’s ability to attain the objectives sought by the sponsor (or sponsors in some cases). Thus, a key aspect of evaluation is to clearly understand the objectives that a sponsor is trying to achieve with the sponsorship, of which at least 150 have been identified that are specific to sponsorship, ranging from sales to brand to community building to employee satisfaction to relationship building (O’Reilly & Madill, 2009). It is important to note that these objectives typically vary from the objectives sought by advertising, and thus normally lead to different methods and metrics of sponsorship evaluation than are seen in advertising, which are media based only (e.g. views, clicks), although some sponsorships do seek those objectives (O’Reilly & Madill, 2009). Scholars have noted that, in some cases, sponsorship is a promotional tactic to achieve a particular marketing objective, however the concept of sponsorship-linked marketing, where a larger strategy is implemented around sponsorship (Cornwell, Weeks & Roy, 2005) has received much attention. 95

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On the property side, these organizations (and eSports would be similar) have a limited number of objectives beyond revenue generation to support programming and activities. In some cases, larger properties might have most complex objectives but the generation of revenue (cash) and resources (e.g. value-in-kind) would be primary in almost all case (O’Reilly & Madill, 2012). Sponsorship evaluation is the effort of the sponsor, the property or an agency, to measure the ability of the sponsorship to deliver value to the sponsor (return on investment- ROI) and the property (revenue generated). In the case of evaluating the sponsorship for the sponsor, ROI is typically assessed in terms of sales generated, branding outcomes/changes, or other metrics related to business outcomes for the sponsor.

Sponsorship in the Context of Marketing Strategy In modern marketing efforts, promotional activities are rarely done in isolation, and they are typically part of a larger, integrated marketing plan, where one promotional activity is designed to work with others. For example, a large retailer may follow a sponsorship with a television advertising, a public relations effort, and a new online portal. It is widely acknowledged that an integrated, coordinated approach around sponsorship is the key to successful promotions in today’s competitive and cluttered marketplace (Cornwell & Maignan, 1998). Importantly, sponsorship has been shown to be a valued element in an integrated campaign and a strategy/tactic that is effective in fighting through the clutter with clear and focused messages (Meenaghan, 2013). As a tactic within marketing strategy overall, there are a few key aspects of sponsorship that need to be understood before extending to the context of eSports. These are explained quickly here. For further information on sponsorship, there are a number of books and articles available to learn more2. •

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Exclusivity. The clean market status that many sponsors seek in a sponsorship, whereby none of the competitors are allowed to be involved or showcased by the property. For example, around the Olympic Games, its sponsors (Coca-Cola, VISA, etc.) are profiled and can activate, while the competitors of their sponsors (Pepsi-Co, MasterCard, etc.) are not present in any form.

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•

•

•

Sponsorship Category. The industry classification that defines the sponsor and defines its exclusivity. Bank (e.g., Bank of America), airline (e.g., Emirates), and coffee (e.g., Starbucks) are examples of categories. The definition of categories varies by property. Association and Image Transfer. A core aspect of sponsorship is the association that is created between the sponsor and the property, where the link between the two is promoted with the goal of transferring images inherent to the property to the sponsor. For example, if a sponsored athlete has attributes such as ‘charisma’, ‘attractiveness’, ‘high performance’, and ‘integrity’, these images can be transferred to the sponsor through a well activated sponsorship (Gwinner, Larson & Swanson, 2009). Interestingly, the more disconnected the sponsor, often, the more valuable the sponsorship is to the property (i.e., increased revenue possible) (Murumets, O’Reilly, Tremblay & Katzmarzyk, 2010). Ambush Marketing. Is when an organization who is not the official sponsor (or who holds no sponsorship status with the property) acts in such a way as to suggest to consumers and potential consumers that they are actually a real sponsor.

ESPORTS SPONSORSHIP Building on this foundation of sponsorship knowledge, the remainder of the chapter focusses specifically on eSports sponsorship and considers a series of questions.

Who Are the Major Esports Sponsors Today? Although sponsorship is clearly in its ‘infancy’ in eSports, a number of brands – both endemic and non-endemic to eSports - have launched major sponsorship campaigns around the sport. Table 1 provides a sample of these sponsors, organized by their industry, and their status as endemic (i.e., based in the eSports industry) or non-endemic (i.e., a non-eSports brand marketing through eSports with sponsorship). For instance, as noted in Figures 1 & 2, Twitch, the social media platform specific to eSports, is classified as an endemic sponsor, while Audi, a manufacturer of luxury automobiles, is positioned as an example of a non-endemic sponsor. 97

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Table 1. Major eSports sponsors Endemic Sponsors Hardware Manufacturers: Intel, HyperX, Sony

Non-Endemic Sponsors Beverage Brands: Coca-Cola, Mountain Dew, Red Bull, Monster Energy Mobile Phone: T-Mobile

eSports Applications/Software: Twitch, Microsoft

Automobile Manufacturers: Audi, Mercedes-Benz Credit Card: MasterCard Restaurant Chain: McDonalds Publishers: IGN

Notably in Figures 1 and 2, energy drinks and caffeinated drinks are classified as non-endemic as these beverages have much broader market appeal than just eSports. However an argument can be made that these sponsors are endemic to eSports, given that ‘need’ that many gamers have for nutrition to keep them focussed and awake while playing for long hours. No information is publicly available on the details of these sponsorship agreements (i.e., rights fees, activation spend, length of contract, etc.), however the fact that blue-chip, global brands are increasing their involvement is indicative of the sponsorship potential in eSports and the fact that revenue is already being generated via sponsorship. However, as per data presented in Chapter 1 (see Figure 2, Chapter 1), although the eSport market is very small compared to other industries in sport (e.g., the NFL has total league revenues that are more than 5 times the size of the entire eSports market projected for 2021 with only 20% of those revenues are reported to be from sponsorship (Foster, O’Reilly & Davila, 2016)), the fact that sponsorship is one of the major contributor to eSports revenues (along with advertising) is strong indication of future potential.

What Is the Role of Endemic Sponsors in Esports? In any property situation in sport or otherwise, finding endemic sponsors is always easier than finding non-endemic ones (O’Reilly et al., 2015). Conversely, the revenues possible for a property are also typically considerably less from endemic than non-endemic sponsors (Foster, 98

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O’Reilly & Davila, 2016). Thus, the securing of non-endemic sponsors is considered evidence of a high value property and should be the objective for sponsorship by properties. Achieving endemic sponsors is also vitally important for any eSports property, as this is indicative of support from the industry itself. Endemic sponsors represent the ‘lowest hanging fruit’ (i.e., easiest to sell) from a sponsorship sales perspective. Thus, for any start-up, or early stage eSports league, club or athlete, seeking endemic sponsors is a recommended first step within the sponsorship portfolio. Endemic sponsors are brands that sell products that are specifically and only used in the production of eSports or the playing of eSports. Per Table 1, this list includes hardware, software and game manufacturers. As an example, one of the most active sponsors in eSports, Intel, provides high performing technology that powers the consoles and other hardware forms that eSports athletes play on. Intel sponsors a number of eSports properties, including the Intel Extreme Masters (IEM) which is one of the longest running global eSports tournaments, and a number of eSports teams who compete in eSports leagues and tournaments. Some of the clubs that Intel sponsors are Edward Gaming, CLG Red (one of the top female gaming teams) and Invictus Gaming. Another example (also in Table 1) of an endemic sponsorship is HyperX, a provider of high-tech equipment to gamers. HyperX has a large portfolio of sponsored properties in eSports, including both events and teams. Examples of teams they sponsor include Lunatic-Hai, Geek Fam, Team Liquid, and Team SoloMid. HyperX also is a sponsor and hosts a number of competitive and amateur level eSports events at the HyperX eSports Arena Las Vegas. This is an example of a naming rights deal, inherent to eSports and in this case, the assumption that HyperX is supporting clubs, events and venues with its sponsorship investments, while also positioning itself to drive sales, usage, awareness, and likely other objectives amongst eSports players and fans. A third example of a major endemic sponsor in eSports is Twitch, the online eSports streaming platform that has entered into sponsorship agreements with many eSport properties, and athletes in particular, to drive fans and players to the Twitch platform.

What Is the Role of Non-Endemic Sponsors in Esports? As presented in Table 1, a number of non-endemic brands have been increasingly entering eSports. Coca-Cola, for example, has sponsored 99

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events (e.g., EndGameTV), partnered with Riot Games, mainly hosting League of Legends tournaments. Coca-Cola has also partnered with EA Sports and their FIFA game, with a number of innovative activations. Specific to the FIFA activation, the unique element is in-game content for Coca-Cola via a player character within the game. The idea is that this is an element of the game that players can relate to. Coca-Cola is thus seamlessly integrated within the story of the game. As part of this, a player makes the choices for that character (e.g., customize outfits, select their dialogues, and decide which club to join), and are then rewarded for their play with a sponsorship from Coca-Cola. Mountain Dew, another carbonated drink sponsor, has been in the eSports industry from its start. They are well known for their associations to eSports and have sponsored many eSports properties over the past decade. This includes a long-standing partnership with ESL and Ninja (including the legendary Mountain Dew fridge that sits behind Ninja while he streams). Two major energy drink brands have also sponsored eSports for much of the past decade, namely Red Bull and Monster (a Coca-Cola brand), both leading brands in their industry. Although these are classified as non-endemic sponsors, there is a very intimate link to eSports (i.e., many eSports athletes consume energy drinks to stay alert while training and competing) that they can leverage, through sponsorship, to achieve their business objectives. In the case of Red Bull, they have an extensive portfolio of eSports sponsorships and innovative activations around leagues and competitions, including “Red Bull Player One” for League of Legends, “Red Bull Gaming Ground” for Dota2, and “Red Bull Quest” for Destiny. Red Bull also has a portfolio of leading athletes they sponsor from different games (e.g., Bjergsen from League of Legends, DeMoN from Dota2, and Agge from FIFA). Bjergen, for example, has more than one million subscribers on Twitch. Further, Red Bull sponsors some eSports teams, including Team SoloMid and Cloud9. These four examples (Coca-Cola, Monster, Red Bull and Mountain Dew) are very close fits with eSports and, although non-endemic from our view (per Table 1), they have a close fit to eSports and related images and associations that make sense from a sponsorship perspective. However, there are examples of non-endemic sponsors in eSports who are seeking properties where there is more of a ‘disconnect’ that can, perhaps be leveraged for business gain by the sponsor. Here are a few examples: 100

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• •

• • •

T-Mobile sponsors the Overwatch League and the Houston Outlaws, an Overwatch League club. Audi sponsors RFRSH Entertainment and their team Origen who compete in League of Legends tournaments, and formerly Bayern Ballers Gaming in NBA2K, the eSports team of the famous football/ soccer club Bayern Munich. Mercedes and McDonalds both sponsor ESL. Mastercard has a multi-year deal with Riot Games and League of Legends tournaments. McDonalds sponsors LaLiga eSports.

An example of activation on an eSports sponsorship can be seem with McDonald’s, who have catered its menu items to event attendees at eSports events and they offered some Counter-Strike branded menu items at McDonald’s stores in Denmark.

What Is Driving Esports Sponsorship? An area in need of future research, is understanding the drivers that are attracting brands, both endemic and non-endemic, to eSports. Although it is very early days in a small market compared to other major sport properties, some very positive signed are in place. There are six major drivers of eSports sponsorship:

Audience An opportunity to reach the young male market. Young men (under 40) are a challenging market for brands to reach in any engaged way. For those who game, and as has been outlined in detail in previous chapters, they are engaged. Esport is characterized by long hours, deep passion, and time investment. How to activate this group is still in the works.

Engaged Environment For those who game, all ages and genders, the environment is highly engaged. Gamers are focussed on their task and engaged in the game. The opportunities for integrated activation such as the Coca-Cola FIFA example noted earlier, are evidence of this. 101

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Technology Forecasts Every year the quality of games and applications available to gamers improves and numerous firms are seeking to develop new and better hardware, software and accessories. This bodes very well for sponsorship opportunities down the road, particularly in terms of platforms for activation.

Growth As noted in Chapter 1, as reported by Newzoo, the eSports economy is growing at a massive rate, including sponsorship, which was reported to have increased by $359.4M (53.2%) in 2018 over 2017.

Low Cost At this point in time at least, in comparison to other high value sponsorship properties that reach young male markets (e.g., professional sport, music festivals, etc.), sponsorship of eSports properties are open to smaller brands and lower budgets.

What Is the Crossover Potential with Traditional Sports? Led by the move of the National Basketball Association (NBA) into eSports with their own(ed) property, there is a case for major traditional sport to extend their brands into eSports as a means to reach that elusive young (2135) market, to build fans in that age-group for the traditional sport, to expand the celebrity of star players through their digital version, to create new stars/ celebrities in the gaming environment, and perhaps most importantly offer more potential options and activation platforms for sponsors. Second, as was reported in Chapter 1, in referencing Nielsen’s eSports report, the majority of eSports fans look at brand involvement in eSport favourably. Perhaps as a result a large number of firms are sponsoring eSports, including hundreds of sponsorships with IT, retail, online services, non-alcoholic drinks, online media, hardware, gaming and energy drinks. That said, sponsorship in eSports has evolved in the same way as sponsorship in most areas, with rights fee purchases and activation plans. In a typical and effective eSports sponsorship, just like a traditional sponsorship, the two main players, sponsor and property, work together to build an association to 102

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the benefit of both seeking ROI for the sponsor, revenue/resources for the property and enhanced exposure for both.

CONCLUSION This chapter introduces sponsorship and some of the key concepts and elements of the marketing tactic. Notably, exclusivity, servicing, activation, evaluation and image transfer are introduced and explained. The remainder of the chapter then responds to 5 specific questions about eSport sponsorship outlining that it is a key aspect of the business model of most eSport organizations to date, has vast potential for growth, and that it has developed in a similar way to traditional sponsorship.

FUTURE RESEARCH DIRECTIONS Considerable future research in this area is needed and below is an outline of potential future areas in need of investigation. These are not listed in any order of priority or ranking.

Investment There is very limited public information on the investment side of eSports sponsorship. How much is being spent? How long are the contracts? What objectives are being sought? Are properties generating the resources that they need? This research and understanding will be key to assessing the future of sponsorship, comparing it to traditional sport sponsorship and identifying the activation, servicing and evaluation needs of the field.

ROI Assessment This research will be very important to sponsors who are facing renewal decisions and to properties who are facing pricing decisions. Evaluation assessments of eSports sponsorship versus the sought objectives of sponsors (and properties) need to be undertaken to determine if it is working, if it is being priced property, and if the appropriate activations are being use.

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Activation Experiments A set of experiments testing various activations in eSports would be an important contribution to the field to determine what activations work, how they could be improved, and what new and innovative activation tactics might be considered or tested.

Agency Interviews As is well known in many marketing scenarios, agencies who represent the key stakeholder groups have a strong grasp on the reality of their businesses and the trends/challenges to be on the look for. Interviews with agencies work in eSports sponsorship could help identify these items.

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REFERENCES Cornwell, T. B., & Maignan, I. (1998). An international review of sponsorship research. Journal of Advertising, 27(1), 1–21. doi:10.1080/00913367.1998 .10673539 Cornwell, T. B., Weeks, C. S., & Roy, D. (2005). Sponsorship-Linked Marketing: Opening the Black Box. Journal of Advertising, 34(2), 21–42. doi:10.1080/00913367.2005.10639194 Crompton, J. L. (2004). Conceptualization and alternate operationalizations of the measurement of sponsorship effectiveness in sport. Leisure Studies, 23(3), 267–281. doi:10.1080/0261436042000183695 Foster, G., O’Reilly, N., & Dávila, A. (2016). Sports business management: Decision making around the globe. Routledge. doi:10.4324/9781315687827 Gwinner, K. P., Larson, B. V., & Swanson, S. R. (2009). Image transfer in corporate event sponsorship: Assessing the impact of team identification and event-sponsor fit. International Journal of Management and Marketing Research, 2(1), 1–15. IEG. (2018). IEG Sponsorship Report: What Sponsors Want & Where Dollars will go in 2018. Downloaded February 1st, 2019 from http://www.sponsorship. com/IEG/files/f3/f3cfac41-2983-49be-8df6-3546345e27de.pdf Meenaghan, T. (2013). Measuring sponsorship performance: Challenge and direction. Psychology and Marketing, 30(5), 385–393. doi:10.1002/mar.20613 Murumets, K., O’Reilly, N., Tremblay, M., & Katzmarzyk, P. (2010). Private Public Partnerships in Physical Activity and Sport: Principles for Responsible, Successful Partnerships. Journal of Physical Activity & Health, 7(Spring), 317–319. O’Reilly, N., & Huybers, T. (2015). Servicing in Sponsorship: A Best-Worst Scaling Empirical Analysis. Journal of Sport Management, 29(2), 153–169. O’Reilly, N., & Lafrance Horning, D. (2013). Leveraging Sponsorship: The Activation Ratio. Sport Management Review, 16(4), 424–437. doi:10.1016/j. smr.2013.01.001 O’Reilly, N., & Madill, J. (2009). Methods and Metrics in Sponsorship Evaluation. Journal of Sponsorship, 2(3), 215–230. 105

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O’Reilly, N., & Madill, J. (2012). The Development of a Process for Evaluating Marketing Sponsorships. Canadian Journal of Administrative Sciences, 29(1), 50–66. doi:10.1002/cjas.194 O’Reilly, N., Pound, R., Burton, R., Seguin, B., & Brunette, M. (2015). Global Sports Marketing: Sponsorship, Ambush Marketing and the Olympic Games. Fitness Information Technology. PwC. (2014). At the gate and beyond: Outlook for the sports market in North America through 2018. Retrieved from http://www.pwc.com/us/en/industry/ entertainmentmedia/publications/sports-outlook-north-america.jhtml Weeks, C. S., Cornwell, B. T., & Drennan, J. C. (2008). Leveraging sponsorships on the Internet: Activation, congruence, and articulation. Psychology and Marketing, 25(7), 637–654. doi:10.1002/mar.20229

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IEG Sponsorship Report (2018). http://www.sponsorship.com/IEG/ files/f3/f3cfac41-2983-49be-8df6-3546345e27de.pdf; and the Canadian Sponsorship Landscape Study (2019). http://www.sponsorshiplandscape. ca For example: O’Reilly, N, Pound, R, Burton, R., Seguin, B., & Brunette, M. (2015). “Global Sports Marketing: Sponsorship, Ambush Marketing and the Olympic Games”, Fitness Information Technology, USA.

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eSports Gender, Race and Culture ABSTRACT Gaming culture has often courted controversy, whether for its association with sloth, its violent content, or sexist depictions of female characters. In the narrower context of eSports, instances of misogyny, racism, and homophobia remain an ongoing concern. Despite the fact that women and racialized groups make up a significant proportion of the gaming public, eSports viewership among those groups is proportionally much lower. Moreover, analyses in this chapter show that women and people of color comprise a fraction of the top streamers on Twitch, as well as the broadcast face of eSports media coverage, the casters. Despite efforts to educate users and regulate the conduct of players and streamers, the eSports community continually runs into controversy. While the industry grapples with its image related to social justice and equity, the clear lack of diversity in eSports excludes a large and important demographic, and thus limits its economic growth. Reforms have been slow to come, and some argue have had impact.

INTRODUCTION A recent study on eSports and gaming by researchers at the University of Oxford concluded, as have many previous analyses, that gaming is in no way connected to violence in society (University of Oxford, 2019). What it does observe, however, is a toxic culture of “anti-social behavior” DOI: 10.4018/978-1-7998-1538-9.ch006 Copyright © 2020, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

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including trolling and “trash-talking.” Gaming might not be a direct catalyst for violence, however other reports have highlighted an ominous connection between gaming sites and the alt-right as emerged in the aftermath of the mass shooting at a Mosque in New Zealand in March, 2019 (Duff, 2019). Women and people from racialized groups make up a significant portion of the gamers in North America and many parts of the world, but eSports viewership among those groups is proportionally much lower. Incidents of racist and sexist behavior are documented with remarkable frequency in eSports media, despite industry efforts to boost inclusion and punish those who step out of line. Diversity advocates argue the perceptions of a hostile culture itself prevents broader participation in eSports by marginalized groups. Moreover, eSports teams, leagues, game publishers and media cannot take full advantage of the market when major demographics do not engage. More importantly, the individuals and groups targeted by toxic rhetoric continually suffer from marginalization and abuse in the absences of any broad, measured reforms. This chapter documents the ongoing issues related to equity and social justice faced by eSports and underscores the lack of diversity. It also examines the efforts to target harassment and provide a more inclusive culture.

BACKGROUND The Masculine, White World of Twitch The global gaming community is huge, as indicated in previous chapters, and almost half the population of the world plays video games. In North America this means high rates of participation for both men and women, as well as racialized groups. On the gender front there seems to be fairly consistent data estimating female gaming at about 45 per cent of the total in the United States (Entertainment Software Association, 2018). In Canada, the most recent analyses suggest an even split (50%) between male and female gamers (Entertainment Software Association of Canada, 2018). Statistics on the racial breakdown of the gaming demographic are much harder to come by. One report cites data from a 2017 ESPN Fan Survey in which African-Americans make up 22% of total “who identify as avid fans (African-Americans are 13% of the U.S. population overall)” (parenthesis in the original, Peterson, 2018). Hispanics in the United States 108

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comprise 21% of the “avid fan” group. Though eSports is an emerging social phenomenon, there has not been much research dedicated to measuring racial diversity and inclusion, whether in audiences, professional competitors, media personalities or streamers. The perception, given the volume of writing around misogyny, homophobia and racism in the gaming world, is that eSports is not very diverse at all. Moreover, if, as Chapter 4 suggests, Twitch is the face of eSports, then it fails to reflect its broad fan base. An analysis (below) of the top 100 most followed channels on Twitch for this volume highlights the lack of diversity among eSports broadcast crews, eSports competitors and well-known streamers.

Diversity on Twitch as a Measure of eSports Diversity Social Blade is a data analytics firm that measures the influence of its clients across a number of social media platforms including Twitch (Social Blade, 2019). For the purposes of this study the top 100 most followed channels were selected for analysis. Viewership experienced ebbs and flows; however, the number of followers offered a consistent insight into the popularity of a particular stream. Social Blade continuously updates these rankings and for this analysis the top 100 list was based on the data posted on April 7, 2019. Each channel was coded as either a group or individual account. Individual accounts were then coded for gender identity, ethnicity, and background, (e.g. eSports competitor, eSports media personality, or video gaming/chat streamer such as Ninja, PewDiePie, kittyplays). Gender identity and ethnicity were coded according to traits often identified explicitly on social media platforms associated with the individual accounts, as well as other cues such as surname, speech patterns, attire, and appearance (hair, skin colour and facial features). Measuring race has always been fraught and must be put in proper context. Henry and Tator (2002) point out that race is a social construct “based on the false assumption that physical differences… are related to intellectual, moral, or cultural superiority,” but nonetheless argue for its consideration since racial categorizations have “significantly affected the lives of people of colour” (p. 11). Based on established coding methodologies from previous analyses of ethnicity, a minimum number of categories was employed, specifically White, Person of Color African/Black, Person of Color Asian, Person of Color Other/Undetermined (see Martin, 2004; Clark,

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Figure 1. Gender identity in the top 100 Twitch streams 2018

2013, 2014: Fraser & Anderson, 2018). Since gender is another social construct, Twitch accounts were coded into self-identified categories of female, male, or other. Out of the top 100 Twitch channels, eight are group accounts. When repeat channels are accounted for, there are 72 accounts available for analysis. While ethnicity counts point to some degree of racial diversity, gender coding shows profound dominance by male accounts as demonstrated in Figure 1 and 2. Ninety-four % of individual accounts belong to males. There are only four individual female Twitch streamers coded out of the entire top 100. Pokimane is the first ranked at 14th, however she is a video gaming chat account, not a figure in eSports. The next ranked female comes in 52 spots after Pokimane, ariplaysgames. She is contracted by Luminosity Gaming to create content for their brand. Similar to Pokimane, ariplaysgames is considered more of a video gaming/chatting account. Kittyplaysgames

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Figure 2. Race in the top 100 Twitch streams 2018

is another female account that is considered to be just a gaming/chat and ranks 84th. She is now a caster for Fortnite and has been signed with Allied Sports to create live content. Ethnicity codes show some diversity among individual accounts, even as White streamers make up 58% of the top ranked channels. Given Twitch’s global reach, it is not surprising to see significant participation among people of color, given the popularity of eSports in Asia and South America, where many of the non-White individual streamers are based. To broaden the analysis, additional coding was conducted on the group accounts, which largely consisted of games publishers, their specific games or the associated eSports league. The intent with this aspect of study was to determine the characteristics of the people consistently being watched on these accounts, the casters and on-air hosts. Using a combination of websites, company news releases, social media (Twitter in particular) and posted Twitch videos associated with the accounts, lists of current casters were developed and then subjected to the same gender and racial coding. These accounts 111

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included Riot Games, esl_csgo, Fortnite, eLeagueTV, FaceITTV, Games Done Quick, Dreamhackcs, and Overwatchleague. The researchers were unable to reliably identify casters for Games Done Quick and Dreamhackcs. Once again, the coding was based on the perception of the coders, and in some cases there were some inconclusive results around ethnicity resulting in codes of “undetermined”. In this phase of the analysis, as represented in Figure 3 and 4, there is generally more diversity both from gender and race perspectives. There are 114 casters coded in total, though researchers recognize that this represents just a sample of casters in the eSports world. Out of the 114 casters that were analyzed, 14 of them are female and one is “Other.” Males still represent a disproportionately high 87% of the sample, though the caster group has slightly better female participation than in the individual accounts. The Overwatch League had the best representation of female casters at about 14% across both the North American talent team and its International Talent team. Fortnite’s female participation rate comes in higher at 20%, however that represents one female on a broadcast team of five. From an ethnicity standpoint, the Overwatch League had the highest representation of people of color because its International Talent team spans China, France, Korea, Latin America and Russia. In total, there were 35 People of Colour coded among the group accounts, 22 from the Overwatch League alone. At almost 31%, total people color comes in lower than the 41% recorded in the individual accounts. Finally, data from both the individual and group channels were combined, including casters, to give a broader overview of the ethnic and gender participation rates in the top Twitch streams, represented in Figure 3 and 4. These overall numbers document the popular perception of eSports as not particularly diverse, and heavily male-dominated. The faces and voices most commonly seen on Twitch are overwhelmingly male – 90% in the top 100 streams – and almost two-to-one White over any other race. Of particular notice among the racial data, is the low participation rate among African/ Black streamers, at just 4%. As noted above, African Americans represent up to 22% of the eSports fan base, while the United States is home to the most Twitch viewers worldwide, over 20% of the entire audience and climbing (Iqbal, 2019). However, to what extent the African/Black representation in the Top Twitch stream analysis represents under-representation is difficult to quantify with any precision. Since the internet is borderless there are no demographic benchmarks against which to compare racial participation rates. In the United States, people who 112

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Figure 3. Caster gender identity in the top 100 Twitch streams including casters (2018)

Figure 4. Race in the top 100 Twitch streams including casters (2018)

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identified as Black or Black in combination with another race made up 14% of the population according to the last census (Rastogi, Johnson, & Hoeffel, 2011, p. 3). Other countries in the top 10 for Twitch viewership either have proportionately small populations of racially African/Black citizens such as the United Kingdom, do not measure ethnicity in census data (Germany), or have nuanced, distinct racial labels in their society, as in the case of Brazil. This appears to make any exercise in assessing ethnicity seem like a ‘fool’s errand,’ however, this analysis does lead to this clear finding: eSports, at least as represented by Twitch, is overwhelmingly male, and White. With that conclusion, supported by data, the controversial issues of sexism, homophobia and racism faced by eSports are now contextualized. The next section explores the history of abuse in the gaming and eSports world.

Racism, Misogyny and Homophobia When 51 people were killed in a mass shooting at a mosque in New Zealand in March of 2019, and social media teemed with expressions of grief and support for the families of the victims, the name of the most famous gamer in the world – PewDiePie – was trending along with the hashtag #NewZealandStrong. The gunman had live-streamed his rampage “in a first-person shooter style reminiscent of a video game, for viewers to comment on in real time” (Duff, 2019). According to one news account: Followers on the internet chat room he frequented – a site that began out of a harassment campaign known as GamerGate, to target high-profile women in the gaming industry with trolling, rape and death threats, and doxing – cheered along and encouraged him as innocent people died. (Duff, 2019) During the livestream the gunman is heard to utter the phrase “Subscribe to PewDiePie,” referencing Swedish internet celebrity Felix Kjellberg, a video game commentator with over 90 million subscribers on YouTube. “I feel absolutely sickened having my name uttered by this person; My heart and thoughts go out to the victims, families and everyone affected by this tragedy” Kjellberg tweeted (Forani, 2019). However, this was hardly the first time PewDiePie’s name was linked with toxic racism. He had previously courted controversy for endorsing a neo-Nazi YouTube channel, fueled racist social media discourse over his fight for subscribers with India’s T-Series website (hence the gunman’s reference), and stoked antisemitism in 2017 114

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when he paid two men to hold up a banner reading “Death to all Jews.” He also issued an apology after a digital backlash for using the N-word to describe another gamer. While PewDiePie is more representative of broader YouTube gaming culture, there are many examples of racist behaviour associated with professional eSports. In 2017, Toronto Esports’ Matt “Dellor” Vaughn was playing a ranked match in Overwatch, and when his opponent started to take control, blurted out the N-word an estimated 60 times, all while streaming on Twitch. Vaughn was fired from Toronto eSports. Twitch also shut down his channel for Terms of Service violations. eSports news site Kotaku described Vaughn’s reaction: In classic esports fashion, Vaughn gave his version of events on TwitLonger, where he both expressed remorse— “I [expletive] up and deserve to be dropped from Toronto Esports”—while also seeming to miss the point. His laundry list of excuses for why he repeatedly said the N-word—he was tired, his internet was lagging, the Widowmaker was cheating, he was angry—leads to his point: He is not racist, just upset, and so he said the most offensive thing that came into his mind. (Van Allen, 2017) Even team owners and executives have been targeted. In 2019, Rick Fox, a former professional basketball player, African American and the founder of Echo Fox, threatened to leave the organization over racist remarks by another shareholder. In an email to the organization Fox cited an “outrageous and abhorrent display of pure racism made by a significant Echo Fox shareholder as well as threats to my family,” that apparently included use of the N-word in reference to Jace Hall, another company stakeholder of African American descent (Lewis, 2019). Media reports suggest this was not the first such incident with the offending investor. The company released a statement in support of Fox, and Riot Games and the LCS launched an investigation. However, at the conclusion of the LCS’s inquiry, the league demanded Echo Fox take “appropriate corrective action within 60 days” (Ashton, 2019). At the time of this writing, Echo Fox indicated it was working to remove the investor from its ownership group. There are web pages and web pages of racist behaviour that follow a familiar media script: competitors use racist language, frequently aimed at their opponents, followed by team or tournament officials issuing suspensions, warnings and fines, and finally a tepid apology from the offender. A similar 115

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narrative has played out among casters in eSports streaming as well. Such an incident occurred in the middle of a League of Legends World Championships broadcast in 2017, when an excited caster used the N-word (YouTube, 2017). In 2018, while playing and streaming on Twitch, Counter-Strike: Global Offensive commentator Matthew “Sadokist” Trivett used that racial slur, and then targeted another gamer yelling “go [expletive] yourself. Maybe put a belt around your neck and jump off a cliff with that belt still attached” (Van Allen, 2018). After All-Stars 2016, two LAS casters, Diego “Vendetta” Ramirez and Bastian Guzman, were fired by Riot Games for racist comments directed at Seongwoong “Bengi” during the live broadcast (Kim & Lee, 2017). However, it is the chat stream alongside the competition screen that can be the source of the worst racist vitriol. Typically, anonymous account holders are free to offer their authentic points of view. A well-documented case in the eSports arena in 2016 involved African-American player Terrence “TerrenceM” Miller, who was competing for Gale Force eSports at a DreamHack Hearthstone competition in Austin, Texas. As Miller battled to a second-place finish in the event, he became “the subject of a torrent of racist abuse on the [Twitch] stream’s chat panel... [including] hateful language targeting African Americans, as well as graphic descriptions and imagery” (Campbell, 2016). Scholars have documented how racist online trolling in the form of YouTube comments, Twitch chat or social media posts are “mobilized against gamers of color in whites’ attempts to harass them” (Ortiz, 2019, p. 2). Kishonna Gray writes of the “othering” that occurs in Twitch chat, whereby African-American streamers are cast as “them” compared to the dominant (white) “us” gamers and reflected in this (rather tame by comparison) chat post: “They’re just too urban. I mean, if they would just be more normal, like regular gamers, then they would get more followers” (Gray, 2017, p. 361). She points out that “people of color” and women are often deemed “deviant” in “spaces traditionally dominated by privileged bodies” (p. 357), fostering the racist and misogynistic discourse, seen on Twitch chat streams in gaming generally. The place of women in the world of eSports has also been an ongoing source of controversy, the origins of which date back to the early 1980s. An overabundance of gaming consoles at that time led to a new marketing approach in which video games were sold in toy stores, and consistent with a gender-based, “boys or girls” retail strategy at the time, industry players “chose the boys’ toy department” (Zampolini, 2018). Gender-based marketing of video gaming took hold, the products often overtly sexualized, 116

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rendering “the presence of women in the videogame environment … optional if not outright intrusive… [evolving] into a sort of object of division, a sort of bubble in which a fundamentally male public reigned violently” (Zampolini, 2018). Discussions as early as the late 1990s questioned the “inherent masculinity of the video game industry” and promoted girls to get involved in video gaming, as it was seen as linked to an “interest in STEM and STEM-related careers” (Chess & Shaw, 2015, p. 209). Women who have taken on senior roles in the gaming industry, or who have challenged the prevalence of sexism in the online gaming community, have experienced harassment and threats, including one video blogger who tried to launch a web series on sexist themes, and “received, and still receives, rape and death threats” (p. 209). However, the viral harassment campaign known as “GamerGate” is the best-known case of the abusive masculine gaming culture targeting women. As with other online conspiracy theories, it was based on a false premise that a female, independent video game developer, Zoë Quinn, was in a romantic relationship with Kotaku eSports writer, Nathan Grayson. The vitriol that would ensue, driven by angry online posts by an ex-boyfriend, was based on the notion that Quinn had slept with Grayson in order to receive a favorable write-up for one of her games. In fact, Grayson had never written any such review. Quinn became “the target of the massive online attacks” but GamerGate then transformed into outrage over eSports journalism ethics and its close ties to games publishers, though this too, was viewed as a reason to attack Quinn online (Mantilla, 2015, p. 84, 86). Other women working in the industry started to speak out about the absurdity and rampant misogyny of the controversy. They too would be doxed and threatened with rape, violence and death. Brianna Wu, a software engineer and developer of “video games with female protagonists,” received tweets such as these: “If you have any kids, they are going to die too. I don’t give a-[expletive]. They’ll grow up to be feminists anyway…Your mutilated corpse will be on the front page of Jezebel tomorrow and there isn’t jack shit you can do about it” (p. 87). She was forced to leave her home after her address was posted by trolls, who also tried to destroy her professionally by setting up fake Twitter and email accounts in her name (Wu, 2014). A number of women decided to give up their work in gaming rather than face the onslaught. Wu wrote about it in an op-ed in The Washington Post: We’ve lost too many women to this lunatic mob. Good women the industry was lucky to have, such as Jenn Frank, Mattie Bryce and my friend Samantha 117

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Allen, one of the most insightful critics in games media. They decided the personal cost was too high, and I don’t know who could blame them. Every woman I know in the industry is terrified she will be next. (Wu, 2014) The tide seemed to turn after Quinn began targeting members of the online mob and campaigns of support for women in gaming sprung up in support. However, it is against this cultural backdrop that professional eSports remains overwhelmingly dominated by men, especially in the top competitions. For example, in the last couple of years, the Overwatch League has featured just one female competitor, and League of Legends has not had any since 2016 (Seiner, 2019). In March of 2019, the NBA 2K League drafted its first woman when Chiquita Evans was selected 56th overall by Warriors Gaming Squad (Associated Press, 2019). Out of 198 players eligible for the draft, two were women. In its inaugural season the NBA 2K League had no female competitors. Women in eSports are often reluctant to step too far into the spotlight for fear of the kind of online harassment documented above, including “remarks about their appearance, the tone of their voice, and more than anything, a dismissal of their ability and knowledge in the game” (Seiner, 2019). They face questions about their legitimacy as competitors that men never face, and it often manifests as abusive comments and trolling. Stephanie Harvey, a professional player based in Los Angeles, told The Guardian, “I’d say the worst (part of the job) is cyberbullying” (Featherstone, 2017). The general manager of Overwatch League champion London Spitfire, Susie Kim, has said there are women who are more than talented enough to play, but the culture of online harassment is a tremendous disincentive: “But they’re just like, ‘It’s a headache. I don’t want to be part of all this.’ I don’t blame them” (Seiner, 2019). In a gaming blog for a website promoting female participation in gaming and IT, the female author argues the toxic culture “causes a feedback loop; women tend to pursue Esports less because of this online harassment, but since less women pursue Esports, the online harassment tends to continue;” she puts responsibility for change on the gaming community itself, “We need to eliminate any online harassment which will encourage more females to continue playing and get involved in all areas of the industry” (Ronan, 2019). In a similar vein, the eSports community erupts from time to time over homophobic remarks uttered by competitors, team officials or casters. A

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case from the summer of 2018 is in some ways typical, both for its obvious intent and the ensuing debate. It began when former CS:GO professional Mohamad “m0E” Assad typed the word “faggot” as an insult during a game on his stream and subsequently receiving a month-long ban from Twitch for “hateful conduct” (Sacco, 2018). While Assad raged on social media about a “witch hunt” notable eSports commentators jumped to his defence, one noting that the word can be defined as “a bundle of sticks” and another decrying attempts to enforce a “tyranny of language” (Myers, 2018). These defences were met with pushback, but they also had their supporters. Assad remained largely unapologetic, explaining in his original stream, “I use the word ‘faggot’ to call people ‘retards.’” In an apology issued later he contended that his “intent was never hate filled. If you know me at all you would know that homophobia is one word that has never been associated with me before” (Myers, 2018), this is despite the fact that he clearly used the word as an insult. In the fallout from the episode an award-winning caster, Frankie Ward, used her thank-you speech at the UK eSports Awards, to call for inclusion for all, stating “I want to pledge this right now by saying there is no room for homophobic or racist or misogynist language in the esports industry” (Sacco, 2018). Nonetheless, similar online debates ensue whenever an inappropriate action or comment manifests in the world of eSports. After the racist trolling of African-American player Terrence “TerrenceM” Miller in the 2016 DreamHack Hearthstone event in Austin, a Blizzard community discussion forum registered hundreds of comments in the span of a little more than a week. Some of the comments advocated for stronger measures and the strict application of terms of service on the part of Twitch and tournament organizers: “Official statements cost practically nothing. Actually moderating your chat channels would cost a lot” (Blizzard Entertainment, 2016). Others dismissed the concerns expressed over the racist chat stream as overblown and political correctness run amuck, demonstrated by this post: “Doesn’t anyone have any real problems anymore to worry about? Not freaking out because people online wrote naughty words in a chat stream? Or do these people think if they ban it, that means people will stop thinking it?” The cynicism around policing online abuse is abundant in the eSports communities, as the industry is repeatedly forced to consider its approaches to inclusion, discussed further in the next section.

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Inclusion and Diversity Initiatives Every facet of the eSports industry seems to have explicit policies in place to improve inclusion and stem online abuse of marginalized groups. Games publishers have put on diversity seminars for the players and media personnel. Twitch celebrated Black History month in the United States by profiling African American streamers. The Los Angeles Valiant of the Overwatch League entered a partnership with the You Can Play Project, an LGBTQ group, in an effort fight homophobia in eSports, the first professional gaming franchise to do so. In a statement, the Valiant’s chief executive said: “The message is simple: no matter who you are, who you love, or what gender you identify as – if you can play, you can play” (Buzinski, 2018). The entire industry incorporates messaging across virtually all of its platforms to promote diversity and speak out against abuse. Online eSports news site, Kotaku is typical, including this statement on its website: “We aim to be an inclusive site for gamers of any ethnicity, gender or sexual orientation. We expect our writers and commenters to treat those they write about as they would if they met them in person” (Totilo, 2013). Tournament and competition feeds, most Twitch streams, and other eSports content providers utilize moderators or “mods” to address bad behavior. However, all to often those measures are not enough, as witnessed in the Terence Miller case, where “there was so much abuse that moderators were unable to keep up” (Campbell, 2016). The uneven application of moderator enforcement and terms of service provisions ensure incidents of racism, misogyny and homophobia continue with some frequency. At the professional level, games publishers and eSports leagues continue to sanction competitors for toxic behavior, issuing fines, suspensions and public statements speaking out against abuse. In 2018, after an unusual rash of incidents, the Overwatch League announced disciplinary action against four players, one for “using anti-gay slurs on his personal stream” another for “posting an offensive meme” and another for using “an emote in a racially disparaging manner on the league’s stream and on social media, and… disparaging language against Overwatch League casters and fellow players on social media and on his personal stream” (Overwatch League, 2018). That last player, xQc, had been previously warned, fined and suspended. In its news release Overwatch reminded fans – and perhaps xQc – “It is unacceptable for members of the Overwatch League to use or distribute hateful, racist, or discriminatory speech or 120

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memes” (Overwatch League, 2018). Moderation systems and sanctions by the eSports industry are undoubtedly important in addressing racism, homophobia and misogyny, however, as one gaming writer concludes, these efforts “for promoting sportsmanship and inclusivity in our favorite games haven’t seemed to make a lasting impression” (Garlow, 2017). There are longstanding programs to attract underrepresented groups into eSports, most notably the AnyKey initiative. Intel and ESL came together in 2015 to launch AnyKey in an effort to address gaming toxicity, its mission statement pledging to “help create fair and inclusive spaces in esports for marginalized members of the gaming community” (AnyKey, 2019a). The organization bases its programs and strategies on academic research, addressing “common stereotypes about women in gaming” and seeking to “improve outdated models for intervention in the industry” (Garlow, 2017). Based on AnyKey’s findings, Intel and ESL have launched female-only tournaments, considered safer environments against harassment. AnyKey has an extensive network of affiliates promoting inclusion and support and has partnered with Twitch to create the “GLHF pledge” which has garnered almost 300 thousand signees (AnyKey, 2019b). GLHF stands for “Good Luck Have Fun,” and the pledge requires those who take it to: 1. 2. 3. 4.

Be a good sport whether I win or lose Remember that people online are still real people Know that my actions and words can have real impact Speak up against hate speech, harassment, abuse, and assault of any kind 5. Show integrity as a player by respecting the rules, appreciating good opponents, and being a good teammate 6. Stop, listen, and reassess if I’m told that my words or actions have been harmful 7. Respect the sincere opinions of others, even if they are different from my own (AnyKey, 2019b) Twitch provides users who take the pledge with a GLHF badge that shows up next to the person’s name in the chat stream. While the moderation and policing of eSports continues to be debated and revised by industry players, AnyKey represents a broad approach at prevention and education. Undoubtedly there is much more work to be done.

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CONCLUSION There are manifold reasons why the eSports industry faces calls from a number of quarters to improve diversity. Some of it relates to social justice and the desire for spaces free from attacks on marginalized groups. Some of it relates to human rights and issues of equity, borne out of the principle that diverse points of view contribute to a more informed community, company, industry and society. Often left out of the discussion is the business case for equity and inclusion. The lack of diversity in gaming and eSports detailed in this chapter represents a roadblock for growth, even as report after report highlights the economic promise of professional gaming. High participation rates for women and racialized groups in computer and video gaming, referenced above, are not reflected in eSports viewer data: “Only 15% of the esports viewer audience is female and only 35% is Hispanic or African American (Statista, 2017, cited in Amazan-Hall, et al., 2018, p. 72). There is an opportunity cost to an abusive online culture that discourages viewership or participation. While ever-increasing digital audiences, the steady stream of sponsorships, and growing mainstream media coverage are often cited as evidence of eSports acceptance in broader society, there remains a strong perception that the gaming community does not respect diversity. Perhaps the best example is the reluctance of the National Collegiate Athletic Association (NCAA) – the main US-based administrative organization for university sports – to include eSports among the competitions and championships it oversees. In early 2019, the president of the NCAA, Mark Emmert, expressed profound concerns at the organization’s annual convention over the limited participation of women in competitive gaming, and added: “We know a lot of the content is hugely misogynistic… We know that some of the content is really violent. We don’t particularly embrace games where the objective is to blow your opponent’s head off” (Reynolds, 2019). Even as a number of US universities establish varsity eSports programs and offer scholarships, the NCAA’s board of governors voted unanimously in late April 2019, to “table the possibility of overseeing and holding championships for esports” (Schad, 2019). In the past there has been worried discussion around the NCAA’s Title IX provisions, which at their heart, are intended to ensure gender equity among collegiate athletes. Acceptance by the NCAA would be another important milestone, but its board of governors is not saying when it might consider the eSports question next (Reynolds, 2019). 122

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Studies of mainstream media show that marginalized groups will seek out alternative, minority media due to the lack of representation in the news discourse (Bendixen & Associates, 2005, p. 8). The same might well be true for eSports, given the low participation rates of women and racialized groups referenced above. A broadcast industry group in Canada, the Radio Television News Directors Association, included a section in its 2006 diversity guide making the “business case” for diversity. It highlighted the disposable income of “Visible Minorities” had reached $76 billion, concluding “diverse staff and diverse coverage equal growth in ratings and viewers” (RTNDA Canada, 2006, p. 9). A team of researchers at the University of California Los Angeles looked at participation rates for racialized groups in Hollywood films and their success at the box office; Their findings demonstrate that “America’s increasingly diverse audiences prefer diverse film and television content” (Hunt, et al., 2018, p. 4). They found that films with diverse casts did much better than those with “racially and ethnically homogenous casts,” and that ratings for television shows were highest among Whites and racialized groups for programs that were more diverse as well (p. 5). Such data is increasingly informing the discussion around diversity in eSports as well. An editorial in The Esports Observer from a few years ago captures the argument well: It seems like it’s time for esports to wake up. The diversity issue can no longer be ignored. Tournaments that don’t comply are leaving literal dollars and views on the floor. Increasing diversity will be no easy task – and remember, the problem isn’t solved by simply shoving somebody into a position where they won’t excel. But finding a way as the esports industry grows is critical. Diversity is no longer just a “feel-good” issue – it’s just good business. (Mitchell, 2015) If the eSports industry takes this to heart, and the business case drives new measures to significantly thwart trolling and online abuse, as well as racist, sexist and homophobic discourse, then eSports might well become a model for digital platforms everywhere. However, diversity initiatives tied to economic arguments have had little to no impact on rates of inclusion in many industries. Only the most intentional measures to boost representation and combat egregious racism, misogyny and homophobia seem to have any impact. eSports has an opportunity to set

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the standard for the larger gaming community by establishing zero-tolerance guidelines for all competitors, casters, team executives and personnel, and spectators, beyond terms of service and the networks of moderators. This chapter has documented how women in eSports are often reluctant to fully participate in competition, even when they are clearly qualified, due the inevitable harassment that ensues. In her book, Gendertrolling: How Misogyny Went Viral, Mantilla (2015) devotes an entire chapter to tackling toxic online behavior. Much of it could be incorporated by the gaming and eSports community to address the ongoing concerns in their spaces. Her legislative reforms would require political intervention, however others are well within the purview of gaming and eSports leadership, such as the call to end anonymity, increasing diversity in the industry’s workforce and executive ranks, redefining cultural norms around what is and is not acceptable, and sanctioning bad behavior (pp. 205-216). In the cases of harassment described earlier in this chapter, those latter two recommendations might have been deployed by industry officials to varying degrees, but only when presented with the most obvious incidents of wrongdoing. On the whole the eSports community has not made it a priority; it has not risen up with one voice and made it a mission to end toxic behavior. The lack of concrete action ensures that harm continues; the impact on the marginalized goes on unabated. Racism desensitizes both victims and audiences, allowing racial taunts to perpetuate with “pseudo-acceptance” (Ortiz, 2019, p.12). Black gamers suffer the “invalidation” of their identity and knowledge (Gray, 2017, p. 366). Studies of other media detail the impact on communities outside the dominant culture. For racialized groups the barrage of negative discourse results in “all-too real experiences of marginalization and exclusion” (Mahtani et al., 2008, p. 122). At least one study has found that “cumulative exposure to racial discrimination has incremental negative long-term effects on the mental health of ethnic minority people” (Wallace, Nazroo, & Becares, 2016, p. 1294). In the summer of 2019, Brianna Wu, a game development executive at the time of GamerGate in 2014, wrote a first-person piece in The New York Times discussing what had changed five years on. As documented earlier in this chapter, when she spoke out back then, Wu received threats of death and rape, was doxed and suffered identity theft. In the ensuing years, she wrote, not much had changed:

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I wish I could tell you that it’s gotten better. It hasn’t. Gamergate gave birth to a new kind of celebrity troll, men who made money and built their careers by destroying women’s reputations. It poisoned our politics and our society. Attacks on journalists, disinformation campaigns, the online radicalization of young men — these are depressingly familiar symptoms of our current dysfunction. (Wu, 2019) The lesson, according to Wu, is that petitioning the male-dominated executive suites to “do the right thing doesn’t work.” However, she states this knowledge is “empowering” for women who are “fixing the field” themselves, starting their own companies, supporting and mentoring one another. For Wu, the “lasting legacy of Gamergate” will be “the leaders who stepped up after the carnage” (Wu, 2019). Given the scope of toxic behavior in the gaming community, leaving reforms to the victims seems unconscionable. It is no coincidence that under-represented groups among eSports competitors and audiences are also targets of the worst harassment.

FUTURE RESEARCH DIRECTION This chapter has provided an overview of the controversies dogging video gaming culture and eSports related to misogyny, racism and homophobia. While there are broad data highlighting gender imbalance there remains much work to do to determine rates of inclusion in specific arenas, such as the ranks of professional competitors and industry executives, as well as eSports journalists, commentators, bloggers and casters. Further investigation should consider the participation of marginalized groups in all aspects of eSports. The link between ethnic background and gender, and its influence on content generated by traditional media producers, is well-established. Further key research questions to consider include: 1. How many women and people of color work in eSports media? 2. How many on professional teams or among the ranks of eSports management? 3. Where diversity is lacking, what is the impact on audiences, consumers, sponsors and advertisers? 4. If eSport is to continue to grow it will need to find broader appeal, and by extension, greater diversity. 125

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Hunt, D., Ramon, A. C., Tran, M., Sargent, A., Stoddard, C., & Roychoudhury, D. (2018). Hollywood Diversity Report 2018: Five years of progress and missed opportunities. Los Angeles, CA: UCLA. Iqbal, M. (2019, February 27). Twitch revenue and usage statistics. Business of Apps. Retrieved from http://www.businessofapps.com/data/twitch-statistics/ Kim, B. K., & Lee, J. (2017, April 30). On racism in esports - value of equality in games. Inven Global. Retrieved from https://www.invenglobal. com/articles/1732/on-racism-in-esports-value-of-equality-in-games Lewis, R. (2019, April 26). Rick Fox set to leave Echo Fox amid racist abuse from organization shareholder [UPDATED]. Dexerto. Retrieved from https:// www.dexerto.com/esports/rick-fox-leaving-echo-fox-amid-racist-abusefrom-organization-shareholder-576426 Mantilla, K. (2015). Gendertrolling: How misogyny went viral. Santa Barbara, CA: Praeger, ABC-CLIO LLC. Mitchell, F. (2015, November 19). Why diversity is good for business in esports. The Esports Observer. Retrieved from https://esportsobserver.com/ why-diversity-is-good-for-business-in-esports/ Myers, M. (2018, July 11). Esports olayer’s use of homophobic slur sets off unexpectedly long debate. Kotaku. Retrieved from https://kotaku.com/esportsplayers-use-of-homophobic-slur-sets-off-unexpec-1827514527 Ortiz, S. M. (2019). “You can say I got desensitized to It”: How men of color cope with everyday racism in online gaming. Sociological Perspectives, 1–17. doi:10.1177/0731121419837588 Overwatch League. (2018, March 9). Disciplinary action: Taimou, TaiRong, Silkthread, and xQc. Overwatch League. Retrieved from https:// overwatchleague.com/en-us/news/21610248/disciplinary-action-taimoutairong-silkthread-and-xqc Peterson, L. (2018, March 27). Why aren’t more black kids going pro in esports? The Undefeated. Retrieved from https://theundefeated.com/features/ why-arent-more-black-kids-going-pro-in-esports/ Rastogi, S., Johnson, T. D., & Hoeffel, E. M. (2011, September). The Black population: 2010. census.gov. Retrieved from https://www.census.gov/prod/ cen2010/briefs/c2010br-06.pdf 128

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Reynolds, T. (2019, January 24). NCAA’s Emmert expresses concern over wagering, esports. AP News. Retrieved from https://www.apnews.com/7d6 2e621e8dd4c3bb1edfc54363c40c6 Ronan, B. (2019, March 7). Blog: How to get more female gamers involved in professional esports. Julian Krinsky Camps and Programs. Retrieved from https://info.jkcp.com/blog/getting-more-female-gamers-involved-in-esports RTNDA Canada. (2006). Everyone’s story: Reflecting Canada’s diversity. Toronto: Radio-Television News Directors Association. Sacco, D. (2018, July 10). “Let’s make esports inclusive for all” – presenter Frankie Ward calls out use of homophobic language in esports. Esports News UK. Retrieved from https://esports-news.co.uk/2018/07/10/frankie-wardcalls-out-homophobic-language/ Schad, T. (2019, May 21). NCAA tables possibility of overseeing esports. Heraldmailmedia.com. Retrieved from https://www.heraldmailmedia. com/news/usa_today/ncaa-tables-possibility-of-overseeing-esports/ article_37fc5d41-c2f9-5c11-be21-a408505514ee.html Seiner, J. (2019, January 3). Women navigate toxicity, other barriers in esports. Financial Post. Retrieved from https://business.financialpost.com/ pmn/business-pmn/women-navigate-toxicity-other-barriers-in-esports Social Blade. (2019, March 1). Frequently asked questions. SocialBlade. Retrieved from https://socialblade.com/youtube/help Statista. (2017). Distribution of eSports fans in the United States as of August 2016, by ethnicity. Statista. Retrieved from https://www.statista.com/ statistics/532325/esports-viewers-by-ethnicity-usa/ Totilo, S. (2013, August 1). What’s a Kotaku? Who works here? Kotaku. Retrieved from https://kotaku.com/whats-a-kotaku-who-workshere-458637663 University of Oxford. (2019, February 13). Violent video games found not to be associated with adolescent aggression. University of Oxford: News. Retrieved from http://www.ox.ac.uk/news/2019-02-13-violent-video-gamesfound-not-be-associated-adolescent-aggression# Van Allen, E. (2017, April 24). Overwatch pro’s racist tirade ends his career. Compete by Deadspin and Kotaku. Retrieved from https://compete.kotaku. com/overwatch-pros-racist-tirade-ends-his-career-1794595720 129

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Van Allen, E. (2018, March 31). Counter-Strike commentator drops racial slur during birthday stream. Compete by Deadspin and Kotaku. Retrieved from https://compete.kotaku.com/counter-strike-commentator-drops-racialslur-during-bir-1824230947 Wu, B. (2014, October 20). Rape and death threats are terrorizing female gamers. Why haven’t men in tech spoken out? The Washington Post. Retrieved from https://www.washingtonpost.com/posteverything/wp/2014/10/20/rapeand-death-threats-are-terrorizing-female-gamers-why-havent-men-in-techspoken-out/?noredirect=on&utm_term=.9ccc2b9d9b0c YouTube. (2017, September 26). Riot games caster says the n word during worlds [LIVE]. YouTube. Retrieved from https://www.youtube.com/ watch?v=_ZyCaCPVktA Zampolini, P. (2018, January 26). Where are the women in eSports? CMF Trends. Retrieved from https://trends.cmf-fmc.ca/where-are-the-women-inesports/

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eSports Health and Wellness ABSTRACT The reason for injuries in eSports is that in order to succeed at gaming on a competitive level, athletes are typically required to play for many hours a day. Teams often practice together from three to four hours a day, and as with many sports, this is the bare minimum. These practices also take place in environments that have inappropriate lighting, engender poor posture, and challenging time awareness. The result is serious overuse injuries. At the same time, there are important benefits that can accrue from participation. The challenge is then to create an environment that enhances health benefits while allowing the athletes to pursue their chosen sport and minimize health concerns.

INTRODUCTION The implications for physical and mental health, both in the short and long term, for eSport participants, at both the amateur and professional level, is only now being addressed and recognized as an important issue. The objective of this chapter is to outline both the health and wellness challenges and benefits associated with eSports, while proposing a new model for health care for the athletes who compete in eSports.

DOI: 10.4018/978-1-7998-1538-9.ch007 Copyright © 2020, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

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BACKGROUND Health, wellness and eSports have not traditionally been seen as linked – and certainly not for the broader gaming industry, but there is a growing awareness that perhaps they should. Several myths surrounding the negative attitudes about eSports exist, including the perception that it includes the ‘life-enveloping’ training schedules of traditional professional sports, but without the benefits of physical exercise, a sizeable paycheck (at the current time), or job stability. Alongside, the perception that the sort of mentality required to climb to the very top of any single competitive video game’s player base tends to be extremely competitive, and obsessive. Practicing traditional sports is seen as healthy, can lead to various benefits, and is a good social experience; while practicing a single video game is considered by many to be exactly the opposite. In some cases eSports games and those who play them are considered “toxic” with highranking players blaming their team for screw-ups, and unlike ‘real’ sports, the criticism is more severe as their team is made up of faceless strangers who are easy to demonize, scream at through microphones or degrade over in-game chat dialogue. All of these concerns, regardless of whether or not they are informed by evidence or myth, have led to a perception, perhaps, that eSport is unhealthy. In June 2019, NCAA President Mark Emmert, succinctly expressed this concern about eSports at the organization’s January Annual Convention, stating: “We know there are serious concerns about health and wellness around those games” (Smith, 2019). The convergence of health and eSport has then perhaps become even more complicated with agreements and cooperation between tradition sport leagues that actively promote health, fitness and strength and the eSport industry. In January 2018, Major League Soccer announced a partnership with EA Sports. Other examples include the NBA 2K League, which is a partnership between the NBA and game publisher Take-Two Interactive, that started in May 2018 with 17 teams (each owned by real-world NBA franchises). Pro sports team owners, including Robert Kraft (New England Patriots), Stan and Josh Kroenke (Los Angeles Rams), and Jeff Wilpon (New York Mets), each paid $20 million to buy a franchise of the year-old Overwatch League, overseen by gaming giant Activision Blizzard. Fourth, since forming in 2016, the National Association of Collegiate eSports (NACE) counts more than 80 educational institutions as members (McCorvey, 2019). Finally, Zwift, the 132

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online cycling gaming platform, is developing an eSports cycling league and is hoping to get e-racing into the Olympics. “We’re creating an entirely new category of sports,” Zwift CEO and co-founder Eric Min said. Zwift has grown rapidly since its founding in 2014. The company claims at least 1 million people have signed up for the service, which offers cyclists (and, as of earlier this year, runners) the chance to take part in what is essentially a massive multiplayer video game, powered by real-life exercise. Both British Cycling and Cycling Australia, the governing bodies for competitive cycling in their respective nations, will award the first-ever national championship jerseys for e-racing. In this particular example, the health benefits are real but are offered in a digital medium, which reaches a new audience that skews younger and thus is a bridge between traditional athletic sports and a new digital age (Lindsey, 2018). Even with these burgeoning relationships with “traditional” sport, eSport still seems to succumb to the negative stereotypes, many of which were identified at the start of this chapter. Perhaps as a cause or effect of these attitudes is the World Health Organization’s (WHO) pronouncement in 2018 of Gaming disorder. This is “characterized by impaired control over gaming, increasing priority given to gaming over other activities to the extent that gaming takes precedence over other interests and daily activities, and continuation or escalation of gaming despite the occurrence of negative consequences” (WHO, 2018). WHO recognized that “gaming disorder affects only a small proportion of people who engage in digital or video-gaming activities” (2018) but the organization also noted that “people who partake in gaming should be alert to the amount of time they spend on gaming activities, particularly when it is to the exclusion of other daily activities, as well as to any changes in their physical or psychological health and social functioning that could be attributed to their pattern of gaming behavior” (2018). “The distinction is not in how much gaming, but whether it gets in the way of work, social activities or education. Other diagnoses in the same category include gambling, alcoholism and caffeine addiction” (Feldman, 2019). Grüsser, Thalemann and Griffiths (2007), also looked at excessive computer game playing and evidence for addiction and aggression. This study addresses the addictive potential of gaming, and the relationship between excessive gaming and aggressive attitudes and behavior. 7069 gamers answered two online questionnaires with results suggesting that 12% of participants (840 gamers) “fulfilled diagnostic criteria of addiction concerning their gaming behavior, while there was weak evidence for the 133

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assumption that aggressive behavior was interrelated with excessive gaming in general” (2007). Results of this study also suggested that playing games without monetary reward also met the criteria for addiction. Finally, the results from this study suggested that excessive gamers can have some of the same cognitive markers as other known addictions, but this was not shown in the majority of respondents. For the purposes of this chapter the main focus will be on the health and wellbeing challenges and also potential benefits of eSports. The challenges will then be further subdivided into physiology and mental health related factors.

PHYSIOLOGY In competitive gaming, maintaining one’s physical and mental health is often overlooked. As players dedicate hours to improving their gaming ability, their real-life health can suffer. Whether it’s from sitting for an extended duration with poor posture, increased stress after a crucial loss, or a lack of consistent, restful sleep, the adverse effects of gaming can severely worsen a player’s overall health. (Corking, 2019) Many of the physiological related injuries are the result of muscular imbalances which then requires overuse of certain tendons and joints, which can then lead to pain and repetitive strain injuries (Corking, 2019). Research in the British Journal of Medicine looked at 65 college eSport players and found on average five to ten hours of gaming training daily, with many reporting overuse injuries including those to the hand and wrist. Other common sites for injury as suggested Dr. Hallie Zwibel, of the NYIT Center for Sports Medicine include the neck and back as “poor posture can produce exponential forces on your neck, back [and] shoulder,” Eye fatigue is another example of an overuse injury. eSport players are “making 500 action moves per minute. So there’s a lot of high-speed thinking, and I think that fatigues the eyes even further” (CBS News, 2019). Zwibel also noted that players reported insomnia because the blue light from the screens suppressed the sleep hormone melatonin (CBS News, 2019). Less common injuries, meanwhile, include those sustained in 2013 by pro StarCraft 2 Player Geoff ‘Incontrol’ Robinson who suffered from a blood clot in his knee (otherwise known as a deep vein thrombosis (DVT)) which is common when individuals sit for long periods of time (Thatchil, 2014). 134

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Figure 1. Psychosocial implications of eSports

As noted earlier, eye injuries can also result from eSport players having their eyes fixed on a computer screen with excessive exposure to lightemitting diodes (LEDs) which are used to provide illumination in computers, smartphones, tablets and televisions. LEDs also have a broad spectrum of light, and while they appear white, they have a peak emission in the blue light range of (400–490 nm). Recent research has demonstrated that excessive exposure to this spectrum can create retinal and photoreceptor damage (Tosini, Ferguson & Tsubota, 2016; van der Lely S, Frey S, Garbazza C, et al., 2015). Excessive exposure can also impact the natural circadian rhythm (Tosini, Ferguson & Tsubota, 2016; van der Lely S, Frey S, Garbazza C, et al., 2015) because of the impact on melatonin which is usually lowest during awake hours during the day and then rises at night before sleep but can be altered due to the LED lights (Burgess & Fogg, 2008).

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To protect against these harmful results, some nations are taking significant steps. China, which is the world’s largest gaming market, is increasingly concerned about the impact of gaming on children’s eyesight and has taken strong measures to crack down on the issue. China’s tech giant, Tencent, has tightened checks on the age of people playing online games by checking identities and ages against a police database. Children under 12 are only able to play for an hour a day and older children can play for up to two hours, but not during a night-time curfew. (Wakefield, 2018) One of the challenging consequences of these types of injuries is that they are not typically seen in other sports and thus the sport/health care professionals might not be properly prepared to assess or manage them. That being said, the injuries seen in eSports are similar to conditions found in sedentary desk jobs, with the incorporation of intense dexterous actions, or those found in seniors and thus learnings could result from these comparisons. “The sedentary, hunched postures seen in gaming resemble those of seniors. Gamers are sitting on their couch, a soft surface, so their spine isn’t supported. Now imagine being in this position for hours. These kids now suffer from arthritis, stiffness, inflammation, joint pain and immobility” (Vestergom, 2019). Exercise deficit disorder is also perhaps a term that can be appropriate here as it describes reduced levels of physical activity that are not compliant with current public health recommendations (Faigenbaum, Chu & Paterno, 2013). The difference of eSport and working in an office environment, however, are important but subtle, including eSport participants not being able to stand up and walk just to stretch (Brautigam, 2016). It is also possible that physicians will become increasingly more adept at addressing the health concerns of eSport athletes simply because of the increased popularity of eSport and increased sedentary behaviors in general.

MENTAL HEALTH In addition to the physical injuries resulting from eSport, are those that are more related to mental health and wellbeing. Potential psychosocial “injuries” that can be seen in eSport include issues related to addictive behavior, personal hygiene, social anxiety and sleep disturbances (Doctors that do, 2019). 136

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Figure 2. Physical implications of eSports

eSport has now also been associated with mental health disorders. As noted earlier, in 2018, the World Health Organization (WHO) included gaming in its 11th Revision of the International Classification of Diseases stating that gaming disorder was ‘characterized by impaired control over gaming, increasing priority given to gaming over other activities to the extent that gaming takes precedence over other interests and daily activities, and continuation or escalation of gaming despite the occurrence of negative consequences’ (WHO, 2018). In 2013, it was this recognition that led a Calgarian to create GameQuitters, an anti-addiction hub that centers around helping those escape from gaming’s powerful grip (Warkentin, 2019). Prince Harry has also taken to speaking about the mental health challenges of eSports (Wakefield, 2018). At an event held at a YMCA in west London, the Duke of Sussex “launched a scathing attack on social media and gaming”. Of Fortnite, he said: “That game shouldn’t be allowed. Where is the benefit of having it in your household? It’s created to addict, an addiction to keep you in front of a computer for as long as possible. It’s so irresponsible” (Wakefield, 2018). What do doctors think? A month prior to Prince Harry’s comments, a Family physician in the United Kingdom told an 11-year-old boy that he was “prescribing” a two-week ban from computer games such as

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Fortnite and Minecraft. Dr. Amir Khan said that he was concerned about the impact gaming was having on the boy’s life. It was a light-hearted attempt to draw attention to a serious issue but, anecdotally, it appears that more doctors are seeing links between gaming and mental health. This link is also not precluded to children as research has shown that 200 divorces in the UK from January to September 2018 mentioned addiction to Fortnite and other online games as one of the reasons for the relationship breakdown. Those pushing back against these attacks include Scottish university researcher Andrew Reid who said he thought Fortnite was not “addictive” and suggested that using the term could stigmatize regular video game players. He added that some research even showed “positive characteristics of play” (Wakefield, 2018).

BENEFITS eSport then is perhaps not the ‘evil’ some have suggested or perhaps others have simply accepted its’ existence and are trying to manage it. The United Nations (UN), for instance, in their document ‘Playing for the Planet – How video games can deliver for people and the environment’, suggest that video gaming has the potential to trigger huge directional shifts in thinking and in action. Gaming’s ability to mobilize GEN Y and younger is very powerful if executed properly. The reach, creativity and problem solving ethos of the gaming industry constitutes an untapped resource for encouraging engagement in environmental issues. Gaming can become the new public service media for the world. (Patterson & Barratt, 2019) eSport could also lead to physical prowess. High performance eSport athletes have significantly better manual dexterity and reaction times (Lewis, Trinh & Kirsh, 2011). Whereas novice players average approximately 50 action moves per minute, higher level athletes make 10 moves per second or 500–600 action moves per minute (Doctors that do, 2019; Lejacq, 2014). eSport also has the potential benefit of getting those who might not otherwise physically exercise the chance to actually do so. For example, online training and racing platform Zwift, discussed earlier, has a deal to sponsor the Giro d’Italia cycling race (SportBusiness Sponsorship staff, 2019). As 138

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part of this, the Giro’s 8.2km Stage 1 course in Bologna will launch on Zwift, giving users a virtual-reality experience of the race. The Bologna course will launch in conjunction with a celebratory series of time trial races held on Zwift for the duration of the Giro. Users who take part in an event will then be given the chance to win a Maglia Rosa (pink jersey), signed by the winner (SportBusiness Sponsorship staff, 2019). McCorvey (2018), also noted that while some critics recoil at the idea of school-sanctioned eSports there may actually be benefits. Mark Koski, CEO of NFHS Network, the organization’s video platform, sees eSports as a way to engage disenfranchised teens: “We want students who are currently not in athletic activities to be involved in the school community.” Gaming can help “students think more critically from an engineering and design perspective,” says Len Annetta, a professor at East Carolina University who researches gaming. “A lot of kids who aren’t succeeding in school play video games. They have an interest in learning what’s under the hood.” (McCorvey, 2018) The mental health of these teens could then be positively impacted by them becoming more engaged in school. As reported by Popke (2019) in responding to a NIRSA/NACA National Association of Collegiate eSports (NACE) survey, 48% of institutions with eSports programming suggested that it increased student engagement and socialization. “We’re not just about fitness or traditional sports,” said Laurie Klein, director of recreational sports at the University of North Texas and chair of the eSports joint task force launched last fall by NIRSA and the National Association of Campus Activities (NACA). We are about recreational activities, and that means we should serve students who aren’t otherwise using our programs or facilities. Not everybody wants to come to the rec center to work out or play basketball. If you can get students engaged on campus, they’re more likely to be successful students. (Popke, 2019) “Human beings want to be social,” adds Wade Kolmel, director of athletics and recreation for Calgary’s Southern Alberta Institute of Technology (SAIT), which began offering an eSports intramural program in 2017 at a nightclublike space on campus. Kolmel stated that “eSports are creating their own energy and attracting like-minded people, bringing them out of the isolation of their dorm rooms.” Indeed, reaching a broader swath of students is one of 139

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the goals of the NIRSA/NACA task force. “Students are organizing through various student organizations, and administrators are organizing through intramural and club sport models,” NIRSA president Ken Morton, who is also the Director of campus recreation at Stephen F. Austin University, said when introducing the task force last October. “Senior level administrators, especially at smaller campuses, are leveraging eSports as a recruiting tool” (Popke, 2019).

SOLUTIONS AND RECOMMENDATIONS As eSport continues to grow in popularity, so too will the aforementioned injuries associated with it; thus, it could become an economic burden in the near future. Medical treatment is costly and health benefits in eSport player contracts is not common. Moreover, there is no union or association to deal with this aspect of player protection, and teams with dedicated medical staff remain rare (Brautigam, 2016). This may change, however, in response to some eSport athletes having to retire at a relatively young age. Overwatch professional player, Hyeon ‘EFFECT’ Hwang, announced his emotional retirement from the game due to concerns over his mental health (Banks, 2019). In 2011, Lee “Flash” Young Ho, known to be one of the most dominant players in the history of StarCraft 2, endured surgery to get rid of wrist problems and had to take a recovery break, including a stay at a sports rehabilitation facility (Brautigam, 2016). “While most 20-somethings have barely started their careers, many professional video gamers at that age are already nearing retirement” (Lajka, 2018). With the increased popularity and economic impact of eSport, the value of the athletes has increased and so too then will be how they’re cared for. Marty Strenczewilk, Senior VP Performance at Overactive Media, owner of the Toronto Defiant, a professional eSports team in the Overwatch League noted that the professional eSports team business model is now not unlike a pro sports team (Vestergom, 2019). We’re not unlike a traditional sports team. Just like an NBA player can’t play hours on end, pro eSports teams are adding structure. Leagues are now employing the resources of sports science to help their teams find that extra edge. Our support team includes nutritionists and fitness trainers. (Vestergom, 2019) 140

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NBA 2K League teams such as Milwaukee are also now getting “schooled on wellness because, well, gamers aren’t known for healthy habits” (Hauer, 2019). Bucks Gaming NBA 2K team now partake in 60-minute yoga classes as part of a wellness retreat and spent three days at a spa before practices began. Wim Stocks, CEO of WorldGaming Network points out, “To play at this level, there is a lot of physiological, psychological and mental strain. eSport athletes need to be focused as they are making split-second decisions that have to translate into a wrist or finger movement, and that can be very draining” (Vestergom, 2019). Joe Londergan (2019) noted in a January 2019 blog Looking into the Crystal Ball: 3 eSports - Predictions for 2019” that Player welfare would take on even more importance. In the past decade or so, the world of eSports developed some habits that would probably be considered unhealthy. Players would all live and train together in a single facility. Not many resources were made available to players in terms of mental or physical wellness. eSports organizations also rarely made it a point to help players transition into a different career once their playing days were over. Now, large organizations like Gen.G are changing the conversation. At its newest facility in Seoul, Gen.G offers players access to resources like a nutritionist, a psychologist, a full gym, and streaming resources once players are done playing competitively. (Londergran, 2019). In any sport, the number-one cost is talent and thus making sure athletes are able to perform at their best is each team’s biggest challenge. For those reasons we suggest that a new model will emerge. Some years ago, traditional sports leagues were revolutionized by young data analysts wielding computers. Somewhat ironically the opposite may occur where eSport athletes will be encouraged to eat right, sleep, and exercise. “These ideas have undergirded traditional sports for generations, and they are coming in eSports” (Keh, 2019). At a system wide level DiFrancisco-Donoghue, Balentine, Schmidt, and Zwibel (2019) have proposed an integrated eSport health management model. This came about after recognizing that there was little objective research on the health habits of eSport players and, in particular, those that competed at Universities. The authors also noted that there was no health management model on how to treat these athletes. eSport players, were susceptible to overuse injuries noted earlier that include eye fatigue and hand pain. To address these a health management model was proposed that offered a comprehensive medical team approach to prevent and treat eSport athletes 141

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Figure 3. Health and wellness implications of eSports

(DiFrancisco-Donoghue et al, 2019) . In particular, they recommended that eSports should be included in the clinical sports medicine curriculum, thus encouraging physicians to better understand the interrelationships of social or addictive behaviors, changes in academic or work performance, and chronic eSport participatory injuries. In some respects, and as noted earlier, this model is already being implemented (Black, 2019). According to eSports Insider (2019) there has been a recent trend of eSports organizations teaming with medical teams to keep their players in ‘tip-top’ condition. Werder eSports and Borussia E-Sports recently added AOK Bremen as their health partner and Magic Gaming is now partnering with Orlando Health.

CONCLUSION eSport has received significant and perhaps appropriate controversy and interest, due to its potential health impacts. With the growth of the eSport industry, it is likely that athletes will begin to be held to the same standards in other traditional sports. eSport teams already have uniforms, coaches, and practices, and there will likely be an increasing focus on health and wellness. This may seem somewhat counter-intuitive as some may not think of an eSport player needing a physician’s clearance to participate. Quite contrary, however, eSport athletes are increasingly suffering health

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concerns and chronic overuse injuries and thus understanding how to avoid them and ensure optimal health for those who do participate is important for the individual and system.

FUTURE RESEARCH DIRECTIONS While there remains many opportunities for future research on the health and wellness of eSport athletes, perhaps three that are most pressing include how the long term impacts of eSport will impact biology, how the benefits can be ascribed to those with disabilities and the line between playing a game and a disorder. Vaynman, and Gomez-Pinilla (2006) discussed in their article “Revenge of the sit” how lifestyle can impact “neuronal and cognitive health through molecular systems that interface energy metabolism with neuronal plasticity” and that exercise, a behavior that is inherently associated with energy metabolism, can impact the molecular systems which are important for synaptic plasticity and learning and memory. The implication is that a close association must exist between these systems to ensure proper neuronal function. Their review further emphasized the ability of exercise and other lifestyle implementations to modulate energy metabolism, such as diet, to impact brain function. Sedentary lifestyles associated with eSport, meanwhile, were suggested to link to issues related to energy metabolism, learning and memory. “The literature presented suggests that physical activity or what one can call “Motricity” is intimately connected with cognitive function” (p. 709). Understanding the toll from playing eSport can have on the body and brain, and why it is so important to monitor should thus be seriously considered. The second potential area for future research on eSport and health and wellness is the impact of eSport on persons with disabilities. Yoon, Eun, Park, Koo and Jee (2018) in their article “eSports can enhance sociality and physical fitness in children with intellectual disability” suggested that positive effects are anticipated for children with intellectual disability (ID) who play eSports. They noted, however, that there have been no studies regarding the pros and cons of such activities. The focus on disability and gaming from a future research perspective could also increase as the activity becomes more popular for older adults, many of whom may also have a disability (Parker, 2019). 143

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A third and final area of future research could look at where we draw the line between eSport and gaming disorder. Is the classification of gaming as a disease appropriate? Has enough research been done to separate gaming specifically from addiction behaviour? From a sport psychology perspective, Bányai, Griffiths, Király and Demetrovics (2018) reviewed the psychology of eSports and considered the similarities to problem gambling with the authors examining the similarities between eSport players and professional gamblers (and more specifically poker players). Further research related to this can then hopefully lead to a better understanding of the perils associated with the activity and the potential ways to address them.

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Lajka, A. (2018). ESports players burn out young as the grind takes mental, physical toll. Retrieved June 4, 2019 from https://www.cbsnews.com/news/ eSports-burnout-in-video-gaming-cbsn-originals/ Lejacq, Y. (2014). How fast is fast? Some gamers make 10 moves per second. Retrieved June 4, 2019 from: https://www.nbcnews.com/technolog/howfastfast-some-pro-gamers-make-10-moves-second- 8C11422946. Lewis, J. M., Trinh, P., & Kirsh, D. (2011). A corpus analysis of strategy video game play in Starcraft: Brood War. Proceedings of the 33rd annual conference of the cognitive science society. Lindsey, J. (2018). Zwift Just Raised Enough Money to Buy Team Sky Three Times Over - But Forget the Tour de France. The online cycling games wants to create a whole new sport – and get it in the Olympics. Retrieved June 4, 2019 from: https://www.bicycling.com/news/a25642375/zwift-raises-120-million/ Londergan, J. (2019). Looking Into the Crystal Ball: 3 ESports Predictions for 2019. Front Office Sports. Retrieved June 4, 2019 from: https://frntofficeSport. com/eSports-predictions-2019/ Parker, L. (2019). The next generation of competitive gamers is…over 60? Retrieved June 4, 2019 from:https://www.wsj.com/articles/the-nextgeneration-of-competitive-gamers-isover-60-11557842405 Patterson, T., & Barratt, S. (2019). Playing for the Planet – How video games can deliver for people and the environment. Arendal, Norway: UN Environment/GRID-Arendal. Popke, M. (2019). College Recreation Works to Launch ESports Programs. Retrieved June 4, 2019 from: https://www.athleticbusiness. com/college/college-recreation-works-to-launch-eSports-programs. html?eid=61751581&bid=2439785 Smith, M. (2019). NCAA decide against organising and governing US college esports tournaments. Retrieved June 4, 2019 from: http://www.insidethegames. biz/articles/1079857/ncaa-decide-against-organising-and-governing-uscollege-esports-tournaments#.XPJ_wHGTNo8.twitter Tosini, G., Ferguson, I., & Tsubota, K. (2016). Effects of blue light on the circadian system and eye physiology. Molecular Vision, 22, 61–72. PMID:26900325

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Van der Lely, S., Frey, S., Garbazza, C., Wirz-Justice, A., Jenni, O. G., Steiner, R., ... Schmidt, C. (2015). Blue blocker glasses as a countermeasure for alerting effects of evening light-emitting diode screen exposure in male teenagers. The Journal of Adolescent Health, 56(1), 113–119. doi:10.1016/j. jadohealth.2014.08.002 PMID:25287985 Vaynman, S., & Gomez‐Pinilla, F. (2006). Revenge of the “sit”: How lifestyle impacts neuronal and cognitive health through molecular systems that interface energy metabolism with neuronal plasticity. Journal of Neuroscience Research, 84(4), 699–715. doi:10.1002/jnr.20979 PMID:16862541 Vestergom, M. (2019). ESports take a physical toll as gamer culture evolves. Retrieved June 4, 2019 from: https://www.thestar.com/life/health_ wellness/2019/04/12/eSports-take-a-physical-toll-as-gamer-culture-evolves. html Wakefield, J. (2019). Fortnite: Is Prince Harry right to want game banned? Retrieved June 4, 2019 from: https://www.bbc.com/news/technology-47813894 Warkentin, A. (2019). Gameaholics: How to combat the need to play from a former video game addict. Retrieved June 4, 2019 from: https://www. calgaryjournal.ca/arts-entertainment/4527-gameaholics-how-to-combat-theneed-to-play-from-a-former-video-game-addict.html WHO. (2018). Gaming disorder. Retrieved June 4, 2019 from: http://www. who.int/features/qa/gaming-disorder/en/ Yoon, T. H., Eun, D., Park, S. H., Koo, C. M., & Jee, Y. S. (2018). eSports can enhance sociality and physical fitness in children with intellectual disability. Transylvanian Review, 1(1).

ADDITIONAL READING Gianluca, T., Ferguson, I., & Tsubota, K. (2016). Effects of blue light on the circadian system and eye physiology. Molecular Vision, 22, 61. PMID:26900325

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Key, A. (2019). E-Sports Embraces Traditional Training Methods: Less Pizza, More Yoga, Retrieved June 4, 2019 from https://www.nytimes.com/2019/04/02/ sports/eSports-league-of- legends.html?__s=f2ks6rvnmpyjrh96pnos&utm_ source=drip&utm_medium=email&utm_campaign=The+rise+of+data+a nalytics+in+sports&utm_content=SGN+285 McCorvery, M. (2019). Meet the 26-year-old entrepreneur turning highschool gamers into varsity athletes, Retrieved June 4, 2019 from: https://www. fastcompany.com/90263266/meet-the-26-year-old-entrepreneur-turninghigh-school-gamers-into-varsity-athletes Stouffer, L. (2019). Are you a gamer? You could get specialized medical care like any other athlete, Retrieved June 4, 2019 from: https://www.wsbtv.com/ news/local/north-fulton-county/are-you-a-gamer-you-could-get-specializedmedical-care-like-any-other-athlete/943472556 United Nations. (2019). Sustainability, Retrieved June 4, 2019 from: https:// grid.cld.bz/Playing- for-the-Planet Walker, G., Faigenbaum, A., & Avery, D. (2018). Physical inactivity in youth: Can exercise deficit disorder alter the way we view preventive care? ACSM’s Health & Fitness Journal, 22(2), 42–46. doi:10.1249/FIT.0000000000000370 Worsley, P., Rebolledo, D., Webb, S., Caggiari, S., & Bader, D. L. (2018). Monitoring the biomechanical and physiological effects of postural changes during leisure chair sitting. Journal of Tissue Viability, 27(1), 16–22. doi:10.1016/j.jtv.2017.10.001 PMID:29054302

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The Future of eSports: Future Research Directions

ABSTRACT Predicting the future is a difficult and, arguably, impossible task. This final chapter builds on the past and present and explores macro-level trends and how they may impact the future of eSports. This includes issues related to data privacy, blockchain, artificial intelligence, virtual reality, 5G wireless, and major policy and regulatory issues that may challenge eSports. Together, these trends offer a framework to map out how eSports may impact both business and society. The final section of this chapter synthesizes the detailed research questions from each chapter to guide future research in the field of eSports.

INTRODUCTION The first seven chapters of this book focus on the past and the present of eSports. They explore the roots of eSports, the technological advancements and the economic model that is enabling its explosive growth. They also explore the societal issues both fueling and challenging eSports. This includes evidence associated with the impact of eSports on physical and mental health and wellness; and issues associated with race and gender rooted in the culture of gaming and eSports. However, given the complex social, technological and economic dynamics involved, this book did not attempt to predict the future of eSports, as any forecast is inevitably doomed. The only question is how wrong it will be. DOI: 10.4018/978-1-7998-1538-9.ch008 Copyright © 2020, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

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With that caveat, the final chapter explores the macro-level technological and social trends that impact eSports. This includes emerging issues such as data privacy, blockchain, artificial intelligence, virtual reality, 5G wireless and major policy and regulatory issues challenging eSports. Overall, analysts anticipate that eSports will begin to adopt some of the structural dimensions that drove the growth of traditional sports. This includes introducing independent global governance to offer oversight and coordination. It also includes developing “home” markets, so that teams can access revenue linked to ticket sales, merchandising and local sponsorships.

FUTURE TRENDS AND IMPACT ON ESPORTS Trend 1: Big Data and Privacy Today, data is collected by every digital transaction, whether it be a credit card purchase, a text, a Google search or a keystroke. This data is used to predict behavior and reveal preferences. However, with big data, comes big questions about personal privacy which will likely continue to amplify over the next decade with the emergence of the “the internet of things” (IoT), wearable technology and the continued expansion of digital media. However, recent massive data breaches, like the hack of 40 million Target customer accounts; the hack of 200 million credit files on Equifax or Facebook’s Cambridge Analytical data scandal that involved using the personal information of 87 million people for political purposes, has highlighted that personal user information is big business. The economic model underlying the eSports ecosystem, including keystrokes to online streaming behavior, is anchored in collecting and monetizing the information of participants and fans. The result: eSports faces the same risk as Facebook. An early example of this risk is when the E-Sports Entertainment Association (ESEA), a private company that runs eSports tournaments, had hackers release the stolen emails, private messages and phone numbers of 1.5M accounts (Vanian, 2017). The result of these data scandals led different jurisdictions to respond with personal privacy legislation that had far-reaching implications on any company that collected user information. For example, the European Union’s General Data Protection Regulation (GDPR) defines personal information and establishes the age of consent at sixteen. This creates a significant challenge

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for game publishers whose games involve younger players. Moreover, the GDPR requires that companies ensure all personal data is available to the user on demand. The data protection provisions of the GDPR are significant and less than 2/3rd of global companies were complaint six months after its introduction (Perez, 2019). The California Consumer Privacy Act (CCPA) created similar, but different issues. For example, eSports companies must obtain explicit consent to collect and monetize biometric data, such as keystroke patterns, click speed and logon/logoff times of users (Perez, 2019). This is because the CCPA defines biometric data as personal data, whereas the GCPR does not. This jurisdictional incongruence creates challenges for global companies who operate in multiple jurisdictions. Therefore, the eSports ecosystem faces the same significant technological, social and political challenges as social media companies. In both cases, the monetization of user information is the anchor of their economic model. This issue becomes far more difficult to manage with the divergence of privacy policies across different jurisdictions. Regardless, global eSports companies must comply with a patchwork of privacy policies at the local, national and regional level. Thus, one of eSports greatest strengths, its ubiquitous global reach, may emerge as its greatest burden.

Summary • •

New privacy legislation is impacting the ability for eSports to collect and monetize personal user information. The inconsistent patchwork of laws makes global compliance a significant challenge for eSports.

Trend 2: The Influence of Blockchain The emergence of blockchain technology as a mechanism to manage privacy and fraud risk may have significant implications on the eSports ecosystem. Blockchain, in the simplest form, is a decentralized digital ledger that incorporates the five core dimensions in Figure 1. Blockchain has the potential to create significant value to eSports and the application of it can be clustered into three areas:

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Figure 1. Key dimensions of blockchain

•

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Loyalty Programs. Blockchain offers eSports companies an efficient and secured mechanism to reward participants and fans for engagement. Early stage blockchain loyalty programs, that involve earning tokens that can be used to purchase items in a digital market, are emerging. For example, Tencent Games streamers can earn tokens playing Ring of Elysium, which can then be used to make in-game purchases (Byrne, 2019). The difference between distributed blockchain loyalty programs and the proprietary loyalty programs common today, is the

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•

•

potential for the loyalty tokens to be traded by anyone who recognizes and values them. For example, future applications may allow users to trade eSports tokens or to use the tokens to purchase merchandise or other non-digital content. The result is that as eSports loyalty programs grow, those with critical mass and scale across multiple platforms (e.g. games, streaming) have an advantage and may ultimately influence consumer behavior and revenue. In-Game Transactions. In the future, blockchain has the potential to decentralize the marketplace in gaming. Today, micro-transactions are limited to proprietary in-game purchases or to platform specific vendors (Byrne, 2019). In the future, blockchain may allow users to trade items, ranging from weapons to cards to skins directly, with no thirdparty involvement. Furthermore, these items may also be converted to off-line value including merchandise. An early stage example of this emerged with OPSkins on its WAX blockchain trading platform. This allowed CS:GO skins to be traded until the game publisher, Valve, intervened (Mitchell, 2018). Another example is a digital card game, developed by Fuel Games, that is sold and traded exclusively on the blockchain platform, Ethereum. Both are examples of blockchain’s ability to decentralize control from the publisher. The only question is whether publishers will choose to embrace or restrict the potential of blockchain to open up the gaming marketplace. Facilitate Financial Transactions. Blockchain can be leveraged to facilitate trusted payments to players, teams and tournaments. There have been reported disputes on payments to teams and players (Rossow, 2019) but a blockchain payment system is based on a “smart” contract that releases payment when outcomes are achieved. This works similarly to escrow, where funds are held by a third-party and released when terms are met. A similar model is used to facilitate blockchain based crowdfunding. This enables investors to have a direct relationship with the entity they’re funding while bypassing third-party fundraising channels, such as Kickstarter (Pei, 2019). Here, a team raising funds may now provide direct value to a funder, from financial dividends to exclusive rewards, through blockchain (Byrne, 2019). The benefit of blockchain to eSports, therefore is increasing trust, while lowering financial transaction costs to all parties.

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Figure 2. Revenue growth of AI

Summary • • •

Blockchain provides the potential to facilitate open marketplaces in eSports. Blockchain applications must achieve critical mass to incentivize both adoption and transactions. The blockchain value proposition is founded on decentralization and control. Therefore, publishers must give up control for the potential benefits of blockchain to be realized.

Trend 3: Artificial Intelligence Artificial intelligence (AI) is the driver of automation. AI is encouraging advancements from driverless cars to household automation to computerautomated manufacturing. As per Figure 2, revenue created by AI is expected to ‘explode’ over the next decade. AI will have a cascading impact on eSports: •

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The difference between a high-performance eSport athlete is rooted in efficiency, strategy and teamwork. AI will play a massive role in

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• •

eSports training to refine these skills to provide athletes a competitive edge (Salicki, 2019). eSports competitions in the future may involve humans playing against computers. AI will change how spectators consume eSports. For example, AI is able to scan thousands of hours of streaming content to develop highlights in real-time. These highlights are then fed directly to shoutcasters in real-time for streaming conversation (Gera, 2019).

Summary •

AI will have a cascading impact on the eSports ecosystem from game design to eSports competition to eSports consumption.

Trend 4: 5G and the Internet of Everything The fifth generation (5G) wireless connection is built specifically to keep up with the “internet of everything,” enabling the connection of most devices to the World Wide Web. Home appliances, security cameras, cars, office devices and personal devices are connected to the Internet in ways that are becoming virtually seamless. By 2025, forecasts estimate there will be 5.8 billion unique mobile subscribers worldwide, an increase of 700M from today This is a mobile penetration rate of 82%, with 80% of these subscribers using smartphones (GSMA, 2019). In 2025, with the rapid advancement of the IoT, it is estimated more than 25B billion devices, from cars to refrigerators, will be connected (GSMA, 2019). This will have a massive impact on the growth of mobile eSports. Refer to figure 8.2 for some key data that will drive mobile eSports. With the advent of 5G mobile, mobile eSports will shift from the periphery to the centre with analysts projecting a 35% annual growth rate as eSports shifts to mobile, and mobile eSports crossing the 50% threshold in 2020 (Newzoo, 2018). The dominant mobile eSports market is Asia, as it already possesses a “mobile-first” mindset. Mobile games such as Clash Royale, Vainglory and Honor of Kings, already have seen significant success as eSports platforms. One of the advantages of mobile eSports is its agility for live events as it requires no (or limited) incremental infrastructure relative to landline eSports events. This may contribute to eSports marketers leveraging “flash mob” competitions to stimulate engagement in smaller more frequent 155

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Figure 3. Mobile disruption

events. However, the greatest impact of 5G on eSports, will be viewers shifting to watch eSports competitions on mobile devices. Currently, only .5% of eSports streaming are viewed on mobile devices (Newzoo, 2018).

Summary • • •

Mobile eSports is most popular in Asia. Mobility provides increased flexibility and agility to hosting eSports competitions. 5G enables eSports video consumption to mobile platforms.

Trend 5: The Potential of Virtual Reality The technical promise of virtual reality (VR) has been on the horizon for years. Large technology companies, from Facebook to Intel, have invested significantly in the potential of VR. However, it wasn’t until the explosion of Pokémon Go that provided a glimpse at its potential. VR and augmented virtual reality (AVR) enables gaming immersion to elevate to a level that has not been possible previously. However, today less than 1% of Steam users have a VR headset (Khan, 2019). Although the VR League (VRL) was established in 2016, viewership remains negligible with six million unique views during the 2018 season (compared to the 140 million per month more broadly for Twitch) (Iqbal, 2019). 156

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This limited viewership is linked to the fact that eSports viewership is driven by fans who also play the game. As a result, until VR hits a player tipping point, the appeal to viewers is limited. As titles expand, technology advances and costs are reduced, analysts continue to anticipate VR eSports to shift into the mainstream. In the interim, commercial family event centers are the entry point for many gamers to experience VR gaming, without the costly expense. Overall, analysts predict the VR game market to grow to $44.7 billion by 2024 with a compounded annual growth rate of 35% (Research and Markets, 2019).

Summary • •

In the past decade, VR attracted large investors anticipating significant long-term potential. To date, barriers ranging from limited titles and affordability constrain growth. The shift of VR into the eSports mainstream remains far from certain.

Trend 6: The Need to Monetize Content Media consumers are no longer at the mercy of broadcast schedules. Viewers can now binge a series on Netflix or an eSports tournament on Twitch, at their convenience. However, this expansion and fragmentation of digital media channels makes it difficult to find large audiences for the vast majority of content. As a result, content producers have begun to focus on specialized markets, such as eSports, to connect advertisers (and subscribers) to content that targets consumer values. eSports streaming platforms are facing the same monetization challenges as traditional media. Today, Google and Facebook control one-fifth of all advertising revenue globally (Kowelle, 2017). This disruption expanded into sports, where broadcasters are struggling to monetize their content to balance the huge rights fees. For example, ESPN pays almost $8 billion a year for broadcast rights, but lost 14 million subscribers between 2011 and 2018. Today, much of the Twitch content is free to view. In 2016, Twitch introduced Twitch Prime as a subscription based service for premium content. Moreover, eSports groups, such as MLG, have moved to a subscription based service to watch its tournaments. Esports organizations are starting to leverage media rights, with the 2018-19 growth of media rights revenue at 42% (Newzoo, 2019). The future growth of eSports will be driven by locating 157

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Figure 4. Monetizing content

a financial model that can continue to grow subscribers, while simultaneously monetizing this growth through subscription, advertising or a hybrid model. Refer to figure 4 on forecasts for content monetization.

Summary •

Similar to traditional sports, the promise of eSports is rooted in its ability to monetize the passion and engagement it delivers. Though eSports delivered significant streaming audiences that rivals traditional sports, it has yet to monetize this audience. The answer as to whether it can monetize this audience will have a massive ripple effect throughout the eSports ecosystem.

Trend 7: eSports Betting To date, eSports betting is largely underground, as virtual gambling economies are anchored on unregulated gambling sites which enable individuals to bet virtual items on matches. In 2015/16, trading CS:GO skins emerged as a significant market valued at $5B (Grove, 2016). This expanded by using skins to bet on games of chances and jackpot sites. In 2016, only 40% of skin gambling actually involved eSports betting, while the remaining were tied to games to chance. However, after significant public and legal pressure, Valve, the publisher of CS:GO cracked down on unregulated trade of CS:GO skins.

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With the broader sport gambling restrictions overturned by the US Supreme Court in 2018, eSports gambling is beginning to mimic traditional sport gambling and is driven by market demands. In both traditional sports and eSports, in-game betting will likely emerge as a dominant revenue stream.

Summary • •

The market for eSports gambling is in its infancy, however, it is following the same trends and dynamics as traditional sport betting. This includes a shift to in-game betting. The lack of a recognized global governance eSports body creates challenges related to managing and maintaining the integrity of eSports.

Trend 8: Confronting the Darkside of eSports Similar to the expansion of social media, as eSports grows, it is facing increasing scrutiny from politicians and regulators due to the negative implications of its largely unregulated environment. This includes increasing scrutiny around its impact on both physical and mental health and wellness; a focus on the ethics of recruiting young children (often under the age of ten) to team rosters; and its culture of misogyny. This is not only a significant concern of policymakers, but also by sponsors and investors who do not want to be associated with an industry that does not align with its values and the values of its customers. This creates increasing pressure for an independent governing body to be established in order to define and govern the values of the sport.

Summary • •

Significant public policy and regulatory issues are confronting eSports as it moves into the mainstream. To meet these challenges, there is increasing pressure for the establishment of an independent global governing body with the influence and power to govern eSports holistically.

Trend 9: Going Global (and Local) By all measures, eSports is a global phenomenon with global reach. The potential of eSports is based on this global potential. However, to date, eSports 159

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teams have had no “home”. This lack of geographic connection limits the emotional connection and rivalries that powered the growth of traditional sports, including local ticket sales, sponsorship and merchandise. Over the next few years, to maximize these revenue streams, all major eSports leagues will shift to establishing geographically based clubs. The NBA2K League was the first to do this, and OWL announced it is establishing 20 geographic based clubs that will have home and away games starting in 2020. This includes four teams based in China, one in Korea, two in Europe and the remaining in North America. The ability to localize revenue is critical to maximize its potential. As the Commissioner of OWL, Nate Nanzer, states: You look at the esports club model where everyone is playing in a central studio or online, the business model is global sponsorships, there’s some competition there, and then monetizing content through YouTube and Twitch and other platforms. But if you look at the way teams drive revenue in traditional sports, it’s because they have a venue. They can sell tickets, VIP experiences and boxes and all of those things — concessions, parking, merchandise and local sponsorships — which to date have had no reason to invest in eSports. (Hume, 2019)

Summary •

Similar to tradition sports, the promise of eSports is rooted in its ability to monetize the passion and engagement it delivers. However, though eSports delivered significant streaming audiences that rival traditional sports, it hasn’t demonstrated how it can profitably monetize this audience. The answer to this question will have a massive ripple effect throughout the eSports ecosystem, from player compensation to tournaments to investors.

CONCLUSION: AN AGENDA FOR FUTURE RESEARCH In this book, we have attempted to synthesize the complex and dynamic issues that drive the rapid growth of eSports. However, as a scholarly field of research, eSports is in its infancy. To guide future scholars, we have consolidated the key future research questions identified in each chapter of this book. Together, they provide a holistic lens into an area that is and will continue to have significant implications on both business and society. 160

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eSports Stakeholders 1. What are the objectives of the different stakeholders who are engaged in eSports? 2. What are the inter-relationships of the different stakeholders engaged in eSports? 3. How will these stakeholders influence the growth and future of eSports?

The eSports Economy 1. As it grows, will eSports follow a similar monetization pathway as traditional sports? 2. How will Artificial Intelligence influence the future of eSports? 3. How will emerging mobile technologies influence the future of eSports? 4. How will Virtual Reality influence the future of eSports? 5. What role will eSports gambling play in the future?

eSports Media and Content 1. Will eSports break from its dominant young male audience, and if so, how will this impact media usage in the future? 2. How will increasing network capacity and speed impact eSports media and content? 3. How can the enormous amount of content be leveraged and monetized in the future? 4. How will the growth of eSports impact media revenues streams for traditional sports?

eSports Sponsorship and Marketing Potential 1. 2. 3. 4.

What is the overall eSports sponsorship market today? What objectives are being sought by sponsors? Are eSports properties generating value for their sponsors? What are the most effective performance metrics for eSports sponsorship?

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eSports Gender, Accessibility, Race and Culture 1. How many women and people of color work in eSports media? 2. What is the diversity on professional teams or among the ranks of eSports management? 3. Where diversity is lacking, what is the impact on audiences, consumers, sponsors and advertisers? 4. If eSport is to continue to grow it will need to find broader appeal, and by extension, greater diversity.

eSports Health and Wellness 1. What is the toll and benefits of playing eSport on the body and brain, and why it is so important to monitor? 2. How can eSport can enhance the lives of those with disabilities? 3. Is it possible to distinguish between professional gaming and gaming disorder?

REFERENCES Byrne, S. (2019). Blockchain decrypted: Explaining the technology’s impact on esports. eSports Observer. Retrieved from https://esportsobserver.com/ crypto-blockchain-esports/ Grove, C. (2016). Esports & Gambling: Where the Action is? Eilers & Krejcik Gaming. Retrieved from https://www.thelines.com/wp-content/ uploads/2018/03/Esports-and-Gambling.pdf GSMA. (2019). The Mobile Economy. Retrieved from https://www.gsma. com/mobileeconomy/ Hume, M. (2019). Overwatch League announces city-based, home-andaway matches will start in 2020. Washington Post. Retrieved from https:// www.washingtonpost.com/sports/2019/03/15/overwatch-league-announcescity-based-home-and-away-matches-will-start/?noredirect=on&utm_ term=.90596dd25c4d Iqbal, M. (2019). Twitch revenue and usage statistics. Retrieved from http:// www.businessofapps.com/data/twitch-statistics/ 162

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Khan, I. (2019). The road ahead for VR esports. eSports Observer. Retrieved from https://esportsobserver.com/vr-esports-2019/ Mitchell, F. (2019). Valve shuts down OPSkins bots, users lose skins valued at approx. $2m despite warning. Esports Observer. Retrieved from https:// esportsobserver.com/valve-shuts-down-opskin-bots/ Mudrick, C. (2019). The new reality for mobile gaming: the VR/AR opportunity. Newzoo. Retrieved from https://newzoo.com/insights/articles/ the-new-reality-for-mobile-gaming-the-vr-ar-opportunity/ Newzoo. (2019). Global eSport market report. Retrieved from https://newzoo. com/insights/trend-reports/newzoo-global-esports-market-report-2019-lightversion/ Pei, A. (2019). Blockchain, already disrupting the finance industry, sets its sights on electronic gaming. CNBC. Retrieved from https://www.cnbc. com/2019/02/28/blockchain-sets-its-sights-on-electronic-gaming.html Perez, K. (2019). California’s new data privacy law will be felt far and wide in esports. eSports Observer. Retrieved from https://esportsobserver.com/ ccpa-esports-2019/ Research and Markets. (2019). $44.7 Bn Virtual Reality Market - Global Forecast to 2024. Retrieved from https://www.globenewswire.com/newsrelease/2019/02/25/1741284/0/en/44-7-Bn-Virtual-Reality-Market-GlobalForecast-to-2024.html Rossow, A. (2018). It’s time to wake up the esports space with blockchain. Forbes. Retrieved from https://www.forbes.com/sites/ andrewrossow/2018/05/15/its-time-to-wake-up-the-esports-space-withblockchain/#31b6aaa64ff9 Vanian, J. (2017). Here’s what happened to one company that refused to pay off hackers. Fortune. Retrieved from http://fortune.com/2017/01/10/hackershavoc-ransomware-esea/

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ADDITIONAL READING Byrne, S. (2019). Blockchain decrypted: Explaining the technology’s impact on esports. eSports Observer. Retrieved from https://esportsobserver.com/ crypto-blockchain-esports/ Khan, I. (2019). The road ahead for VR esports, eSports Observer. Retrieved from https://esportsobserver.com/vr-esports-2019/ Mitchell, F. (2019). Valve shuts down OPSkins bots, users lose skins valued at approx. $2m despite warning. Esports Observer. Retrieved from https:// esportsobserver.com/valve-shuts-down-opskin-bots/ Mudrick, C. (2019). The new reality for mobile gaming: the VR/AR opportunity. Newzoo. Retrieved from https://newzoo.com/insights/articles/ the-new-reality-for-mobile-gaming-the-vr-ar-opportunity/

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Amateur eSports Athlete: eSport athletes that engage in tournaments largely or entirely without being paid for their time competing and training. Balancing: When a game developer changes in game items through “buffs” and “nerfs” to make a game’s playability more fair Battle Royale: An eSport genre in which a predetermined number of players drop onto map and scavenge for weapons. Each match ends when only one player is alive. Buff: The opposite of nerf. When a game developer increases the effectiveness of in game elements. Caster: Someone that describes and commentates on a eSport match while it happens live. Circuit: For any given eSport game, a player competes in any number of tournaments over a period of time to complete a season, in lieu of traditional season like the NFL or NBA. Clan: An organized group of players that regularly play together in one or more multiplayer games, but is focused on a particular game. Console Gaming: Playing video games on a prebuilt video game hardware; made my manufactures such as Sony (PS4) and Microsoft (Xbox One).

Glossary

Collocated Gaming: when two or more gamers bring their individual gaming devices to one location in order to play together over the local network. Cross Over: When an eSport athlete attempts to switch between one competitive game to another; or even more challenging- switching genres (FPS, RTS, MOBA). Direct-to-Consumer: Promoting a product or service straight from the seller to the consumer, without intermediaries such as advertising. Doping: eSport athletes that consume some form of drugs in order to enhance or inhibit their in-game performance. Endemic: A sponsor that creates a product or service that is directly related to the industry partnered with. eSports: Multiplayer video game played competitively for spectators, typically by professional gamers. FGC: The acronym for “Fighting Game Community”. A genre in eSports in which two players face off in a virtual fight. FPS: The acronym for “First Person Shooter”. A genre in eSport whose gameplay involves shooting enemies and other targets and in which a player views the action as though through the eyes of the character they are controlling. Freemium: The combination of “free” and “premium” is a pricing strategy where digital products (games) are made free to the consumer but are given the option to make in game purchases (often micro transactions) for premium in game add ons such as weapon skins. Game Developers: A software developer that specializes in video game development – the process and related disciplines of creating video games. Game Publishers: A financier of video game’s development; which handles the marketing and release of the game, and gets the returns on its sales.

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Gamer: A person who participates in video games and consistently makes a strong effort. In-Game Purchase: Refers to items (i.e. skins) that a player can buy to use within a video game; often to enhance their experience. These virtual goods are purchased in exchange for real-world money or an in game proprietary currency. IP: The acronym for intellectual property. A piece of work or invention in some form of median (photo, video game, paper) that is the result of creativity, to which one has the rights; allowing them to apply for patents, copyright, trademark, etc. Lag: A slow response from a computer between the players input and what happens often on screen; often attributed to computer hardware or internet connection. LAN Parties: Is a gathering of people with computers or compatible game consoles, where a local area network (LAN) connection is established between the devices using a router or switch, primarily for the purpose of playing multiplayer video games together. League: A collection of people or teams that play each other over a period of time (i.e., a season). Match Fixing: Occurs as a match is played to a completely or partially pre-determined result, violating the rules of the game and often the law; often motivated by gambling and personal gain. Media Rights: Copyright and related rights typically associated to the marketing and broadcast of a popular event. Meta: Based on the current state of a video game, the most effective way to achieve the goal of the game, whether it is to beat other players or the game itself.

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Microtransactions: A small financial transaction occurring online. MOBA: The acronym for Multiplayer Online Battle Area. An eSport sub-genre of RTS in which players control a single character in a team who compete versus another team of players. Mobile Gaming: Playing video games on a mobile device such as the iPhone. Monetization: The action or process of earning revenue from a business, asset, etc. Moneymaker Effect: Named after Chris Moneymaker, the sudden growth in poker after the 2003 World Series of Poker. Nerf: The opposite of buff. When a game developer decreases the effectiveness of an in game element. Ninja: The online persona of Richard Tyler Blevins, one of the most popular eSport athletes and influencers. Non-Endemic: A sponsor that creates a product or service that is not directly related to the industry partnered with. Online Tournament: A tournament where participants compete until there is one winner left, only occurring online; never meeting in person. Onsite Assets: Content owned by an individual or organization that only exists online, and inherently has value. OP: The acronym for overpowered. An in game item that is too effective/ intense. Often fixed by the game developer with a “nerf”. OWL: The acronym for Overwatch League: the professional eSport league for the game Overwatch.

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Patch: A set of set of changes made to a game by the game developer with the goal of updating, fixing and/or improving it. This includes but it not limiting to: game balancing, bug fixes and other security vulnerabilities. PC Gaming: Playing a video game on a personal computer (PC), rather than a console. Platform: The desired way in which a gamer chooses to play a game (i.e., mobile, console, PC). Prize Pool: The total amount of money collected to award as prizes to players in a tournament. Professional eSports Athlete: An eSport athlete that creates a professional (living) from playing video games. PubG: The acronym for Players Unknown Battle Grounds: a video game in the Battle Royale genre. Pubs: Short for “public lobby”. When an eSport athletes plays against less skilled gamers in public lobbies, opposed to professional tournaments. PVP: The acronym for player versus player. When a player competes against other real players, opposed to computer generated enemies. Roster: The official manifest of players on a team, often with restrictions to the number of players per team. RPG: The acronym of role-playing game. An eSport genre in which players assume the roles of their characters in a fictional setting. RTS: The acronym for real-time strategy. An eSports genre where participants position and maneuver units and structures to secure areas of map, while simultaneously destroying the opposing team’s units and structures.

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Skins: A digital graphic overlayed on in game items in order to personalize and enhance them. Sport: An activity involving physical exertion and skill in which an individual or team competes against another or others for entertainment. Streamer: Someone who live streams video games online for an audience as a form of entertainment; making money through advertising and viewer donations. Survival-Based Games: A video game set in a hostile, intense, openworld environment, where players generally begin with minimal equipment and are required to collect resources, craft tools, weapons, and shelter, and survive as long as possible. Team: A group of players forming one side of a competitive team. Title: The name of video game. Traditional Sports: In comparison to eSports, sports that are played in person and broadcast through traditional methods (i.e., television). Twitch: An online streaming service, where streamers play video games. Video Games: An electronic game that involves interaction with the user interface to generate visual feedback through a digital screen. WCS: The acronym for Starcraft II World Championship Series, the premier circuit for Starcraft II.

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To continue IGI Global’s long-standing tradition of advancing innovation through emerging research, please find below a compiled list of recommended IGI Global book chapters and journal articles in the areas of gaming, eSports, and social networking. These related readings will provide additional information and guidance to further enrich your knowledge and assist you with your own research.

Aggarwal, A., & Arora, N. (2019). Gamification and Advergaming: An Overview of the Innovative Brain Tool in the Field of Advertising. In P. Mishra & S. Dham (Eds.), Application of Gaming in New Media Marketing (pp. 23–35). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-6064-7.ch002 Aggarwal, V. S., & Khurana, S. (2019). Advergames and Children. In P. Mishra & S. Dham (Eds.), Application of Gaming in New Media Marketing (pp. 56–76). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-6064-7.ch004 Ahmed, A. A. (2019). Online Social Capital Among Social Networking Sites’ Users. In J. Thakur (Ed.), Modern Perspectives on Virtual Communications and Social Networking (pp. 90–119). Hershey, PA: IGI Global. doi:10.4018/9781-5225-5715-9.ch004 Amazan-Hall, K., Chen, J. J., Chiang, K., Cullen, A. L., Deppe, M., Dormitorio, E., ... Trammell, A. (2018). Diversity and Inclusion in Esports Programs in Higher Education: Leading by Example at UCI. International Journal of Gaming and Computer-Mediated Simulations, 10(2), 71–80. doi:10.4018/ IJGCMS.2018040104

Related Readings

Balusamy, B., Krishna, P. V., Aishwarya, T., Thusitha, M., Tamizh Arasi, G. S., & Karuppiah, M. (2017). Enhancing Quality of Service in Cloud Gaming System: An Active Implementation Framework for Enhancing Quality of Service in Multi-Player Cloud Gaming. In P. Krishna (Ed.), Emerging Technologies and Applications for Cloud-Based Gaming (pp. 228–260). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-0546-4.ch011 Boltz, L. O. (2019). “Nervousness and Maybe Even Some Regret”: Videogames and the Cognitive-Affective Model of Historical Empathy. In B. Dubbels (Ed.), Exploring the Cognitive, Social, Cultural, and Psychological Aspects of Gaming and Simulations (pp. 228–251). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-7461-3.ch008 Bouraga, S., Jureta, I., & Faulkner, S. (2019). Functional and Non-Functional Requirements Modeling for the Design of New Online Social Networks. In J. Thakur (Ed.), Modern Perspectives on Virtual Communications and Social Networking (pp. 28–57). Hershey, PA: IGI Global. doi:10.4018/978-1-52255715-9.ch002 Brown, J. A., & De Schutter, B. (2019). Using Notions of “Play” Over the Life Course to Inform Game Design for Older Populations. In B. Dubbels (Ed.), Exploring the Cognitive, Social, Cultural, and Psychological Aspects of Gaming and Simulations (pp. 252–269). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-7461-3.ch009 Çadırcı, T. O., & Gungor, A. S. (2019). Gap Between Mobile and Online Advergames: The Possible Effects of the Optimal Gaming Experience-Flow. In P. Mishra & S. Dham (Eds.), Application of Gaming in New Media Marketing (pp. 125–150). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-6064-7. ch008 Cai, J., & Wohn, D. Y. (2019). Categorizing Live Streaming Moderation Tools: An Analysis of Twitch. International Journal of Interactive Communication Systems and Technologies, 9(2), 36–50. doi:10.4018/IJICST.2019070103 Chakraborty, T., & Saha, R. (2019). Food Advergames and Children: The Psychodynamics. In P. Mishra & S. Dham (Eds.), Application of Gaming in New Media Marketing (pp. 95–111). Hershey, PA: IGI Global. doi:10.4018/9781-5225-6064-7.ch006

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Costello, R. (2018). Gaming Innovations in Higher Education: Emerging Research and Opportunities (pp. 1–178). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-2981-1 Datta, P. K., & Srivastava, U. (2017). Cloud Gaming: Design Architecture and Challenges. In P. Krishna (Ed.), Emerging Technologies and Applications for Cloud-Based Gaming (pp. 88–105). Hershey, PA: IGI Global. doi:10.4018/9781-5225-0546-4.ch004 Davidovici-Nora, M. (2017). e-Sport as Leverage for Growth Strategy: The Example of League of Legends. International Journal of Gaming and Computer-Mediated Simulations, 9(2), 33–46. doi:10.4018/ IJGCMS.2017040103 Dubbels, B. R. (2017). Gamification Transformed: Gamification Should Deliver the Best Parts of Game Experiences, Not Just Experiences of Game Parts. In B. Dubbels (Ed.), Transforming Gaming and Computer Simulation Technologies across Industries (pp. 17–47). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-1817-4.ch002 Dubbels, B. R. (2019). Requirements-Based Design of Serious Games and Learning Software: An Introduction to the Vegas Effect. In B. Dubbels (Ed.), Exploring the Cognitive, Social, Cultural, and Psychological Aspects of Gaming and Simulations (pp. 1–34). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-7461-3.ch001 Ezziane, Z. (2019). Social Networking: A Tool for Enhancing E-Services. In J. Thakur (Ed.), Modern Perspectives on Virtual Communications and Social Networking (pp. 1–27). Hershey, PA: IGI Global. doi:10.4018/9781-5225-5715-9.ch001 Fanfarelli, J. R. (2018). Expertise in Professional Overwatch Play. International Journal of Gaming and Computer-Mediated Simulations, 10(1), 1–22. doi:10.4018/IJGCMS.2018010101 Fisher, K. J., Nichols, T., Isbister, K., & Fuller, T. (2017). Quantifying “Magic”: Creating Good Player Experiences on Xbox Kinect. In B. Dubbels (Ed.), Transforming Gaming and Computer Simulation Technologies across Industries (pp. 1–16). Hershey, PA: IGI Global. doi:10.4018/978-1-52251817-4.ch001

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Godwin, K. E., Lomas, D., Koedinger, K. R., & Fisher, A. V. (2019). Monster Mischief: A Game-Based Assessment of Selective Sustained Attention in Young Children. In B. Dubbels (Ed.), Exploring the Cognitive, Social, Cultural, and Psychological Aspects of Gaming and Simulations (pp. 171–205). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-7461-3.ch006 Gopal, D. G., & Kaushik, S. (2017). Emerging Technologies and Applications for Cloud-Based Gaming: Review on Cloud Gaming Architectures. In P. Krishna (Ed.), Emerging Technologies and Applications for Cloud-Based Gaming (pp. 67–87). Hershey, PA: IGI Global. doi:10.4018/978-1-52250546-4.ch003 Gupta, A., & Goyal, A. (2019). Click to Brick: Case Study of a Virtual Reality Company. In P. Mishra & S. Dham (Eds.), Application of Gaming in New Media Marketing (pp. 171–180). Hershey, PA: IGI Global. doi:10.4018/9781-5225-6064-7.ch010 Gupta, H., & Singh, S. (2019). Advent of New Media Marketing Techniques: The Inevitable Disruption. In P. Mishra & S. Dham (Eds.), Application of Gaming in New Media Marketing (pp. 1–22). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-6064-7.ch001 Himmelstein, D., Liu, Y., & Shapiro, J. L. (2017). An Exploration of Mental Skills Among Competitive League of Legend Players. International Journal of Gaming and Computer-Mediated Simulations, 9(2), 1–21. doi:10.4018/ IJGCMS.2017040101 Jain, S., & Sinha, A. (2018). Social Network Analysis: Tools, Techniques, and Technologies. In H. Bansal, G. Shrivastava, G. Nguyen, & L. Stanciu (Eds.), Social Network Analytics for Contemporary Business Organizations (pp. 1–18). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-5097-6.ch001 Johnson, L. M., Chou, W. W., Mastromartino, B., & Zhang, J. J. (2020). Sport Fan Consumption: Contemporary Research and Emerging Trends. In C. Wang (Ed.), Handbook of Research on the Impact of Fandom in Society and Consumerism (pp. 149–170). Hershey, PA: IGI Global. doi:10.4018/9781-7998-1048-3.ch008

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Johnson, M. C., Birchfield, D., & Megowan-Romanowicz, C. (2019). If the Gear Fits, Spin It Again!: Embodied Education, Design Components, and In-Play Assessments. In B. Dubbels (Ed.), Exploring the Cognitive, Social, Cultural, and Psychological Aspects of Gaming and Simulations (pp. 141–170). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-7461-3.ch005 Kari, T. (2017). Promoting Physical Activity and Fitness with Exergames: Updated Systematic Review of Systematic Reviews. In B. Dubbels (Ed.), Transforming Gaming and Computer Simulation Technologies across Industries (pp. 225–245). Hershey, PA: IGI Global. doi:10.4018/978-15225-1817-4.ch013 Kari, T., Siutila, M., & Karhulahti, V. (2019). An Extended Study on Training and Physical Exercise in Esports. In B. Dubbels (Ed.), Exploring the Cognitive, Social, Cultural, and Psychological Aspects of Gaming and Simulations (pp. 270–292). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-7461-3.ch010 Katz, D., Goldberg, A., Khanal, P., Kahol, K., & DeMaria, S. (2017). Using Serious Gaming to Improve the Safety of Central Venous Catheter Placement: A Post-Mortem Analysis. In B. Dubbels (Ed.), Transforming Gaming and Computer Simulation Technologies across Industries (pp. 120–129). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-1817-4.ch007 Kaufman, G., & Flanagan, M. (2017). Digital Divide: Comparing the Impact of Digital and Non-Digital Platforms on Player Behaviors and Game Impact. In B. Dubbels (Ed.), Transforming Gaming and Computer Simulation Technologies across Industries (pp. 94–101). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-1817-4.ch005 Kesavan, N., & N. R., R. (2017). Gesture Recognition: An Interactive Tool in Multimedia. In P. Krishna (Ed.), Emerging Technologies and Applications for Cloud-Based Gaming (pp. 191-209). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-0546-4.ch009 Krishna, G. (2018). Social Networking Data Analysis Tools and Services. In H. Bansal, G. Shrivastava, G. Nguyen, & L. Stanciu (Eds.), Social Network Analytics for Contemporary Business Organizations (pp. 19–34). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-5097-6.ch002

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Krishnamurthy, R. (2019). Social Media as a Marketing Tool. In P. Mishra & S. Dham (Eds.), Application of Gaming in New Media Marketing (pp. 181–201). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-6064-7.ch011 Landers, R. N., & Callan, R. C. (2017). An Experiment on Anonymity and Multi-User Virtual Environments: Manipulating Identity to Increase Learning. In B. Dubbels (Ed.), Transforming Gaming and Computer Simulation Technologies across Industries (pp. 80–93). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-1817-4.ch004 Lee, Y., Dunbar, N. E., Kornelson, K., Wilson, S. N., Ralston, R., Savic, M., ... Elizondo, J. (2019). A Digital Game for Undergraduate Calculus: Immersion, Calculation, and Conceptual Understanding. In B. Dubbels (Ed.), Exploring the Cognitive, Social, Cultural, and Psychological Aspects of Gaming and Simulations (pp. 206–227). Hershey, PA: IGI Global. doi:10.4018/978-15225-7461-3.ch007 Leung, L., & Law, N. (2019). Design Principles for Online Role Play Simulations to Address Groupthink Tendency in Professional Training: An Exploration. In B. Dubbels (Ed.), Exploring the Cognitive, Social, Cultural, and Psychological Aspects of Gaming and Simulations (pp. 35–61). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-7461-3.ch002 Liu, M., Horton, L., Kang, J., Kimmons, R. M., & Lee, J. (2017). Making Learning Fun: An Investigation of Using a Ludic Simulation for Middle School Space Science. In B. Dubbels (Ed.), Transforming Gaming and Computer Simulation Technologies across Industries (pp. 130–152). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-1817-4.ch008 Martinez-Garza, M., & Clark, D. B. (2019). Investigating Epistemic Stances in Game Play Through Learning Analytics. In B. Dubbels (Ed.), Exploring the Cognitive, Social, Cultural, and Psychological Aspects of Gaming and Simulations (pp. 87–140). Hershey, PA: IGI Global. doi:10.4018/978-15225-7461-3.ch004 Mastromartino, B., Chou, W. W., & Zhang, J. J. (2018). The Passion That Unites Us All: The Culture and Consumption of Sports Fans. In C. Lu Wang (Ed.), Exploring the Rise of Fandom in Contemporary Consumer Culture (pp. 52–70). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-3220-0.ch004

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Meiländer, D., & Gorlatch, S. (2017). Efficient Development and Execution of Adaptable Online Games on Clouds. In P. Krishna (Ed.), Emerging Technologies and Applications for Cloud-Based Gaming (pp. 25–66). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-0546-4.ch002 Mir, R. (2019). The Legal Validity of E-Sports as a Sport. In K. Margaritis (Ed.), Law, Ethics, and Integrity in the Sports Industry (pp. 101–123). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-5387-8.ch005 Mishra, S. P., Kulshreshtha, D., Srivastava, A. K., Gandhi, A. K., & Rastogi, M. (2019). Gamification to Promote the Engagement in Healtcare and Wellness of Patients Under Therapeutic Care: Gamification and Healthcare. In P. Mishra & S. Dham (Eds.), Application of Gaming in New Media Marketing (pp. 244–269). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-6064-7.ch015 Misra, R., Eyombo, L., & Phillips, F. T. (2019). Digital Games for Minority Student Engagement: Emerging Research and Opportunities (pp. 1–120). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-3398-6 Moses, J. S., L. D., D. B., M., N., Babu, M. R., & Krishna, P. V. (2017). A Survey on Strategies, Trends, Economics, and Prospects of Cloud-Based Gaming. In P. Krishna (Ed.), Emerging Technologies and Applications for Cloud-Based Gaming (pp. 1-24). Hershey, PA: IGI Global. doi:10.4018/9781-5225-0546-4.ch001 N. R. R., & Kesavan, N. (2017). Mixed Augmented Reality Systems for Real World Integration. In P. Krishna (Ed.), Emerging Technologies and Applications for Cloud-Based Gaming (pp. 159-190). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-0546-4.ch008 Nag, S., Srivastava, V. K., & Krishna, R. S. (2017). Cloud-Based Gaming Services. In P. Krishna (Ed.), Emerging Technologies and Applications for Cloud-Based Gaming (pp. 139–158). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-0546-4.ch007 Nagpal, A. (2019). Understanding the Psychology of New Media Audiences From a Marketing Perspective. In P. Mishra & S. Dham (Eds.), Application of Gaming in New Media Marketing (pp. 112–124). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-6064-7.ch007

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Nayak, P., & Sharma, S. K. (2017). Impact of Cloud Gaming in Health Care, Education, and Entertainment Services. In P. Krishna (Ed.), Emerging Technologies and Applications for Cloud-Based Gaming (pp. 261–283). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-0546-4.ch012 Ntelia, R. E. (2019). E-Sports at the Olympic Games: From Physicality to Virtuality. In K. Margaritis (Ed.), Law, Ethics, and Integrity in the Sports Industry (pp. 124–143). Hershey, PA: IGI Global. doi:10.4018/978-1-52255387-8.ch006 Patel, R. P., Lin, J., & Khaderi, S. K. (2017). Beyond Gaming: The Utility of Video Games for Sports Performance. In B. Dubbels (Ed.), Transforming Gaming and Computer Simulation Technologies across Industries (pp. 183–191). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-1817-4.ch010 Pillai, A. P. (2019). Nuances of Media Planning in New Media Age. In P. Mishra & S. Dham (Eds.), Application of Gaming in New Media Marketing (pp. 151–170). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-6064-7. ch009 Prasad, P., & Saigal, P. (2019). Social Media Marketing: Tools and Techniques. In P. Mishra & S. Dham (Eds.), Application of Gaming in New Media Marketing (pp. 202–214). Hershey, PA: IGI Global. doi:10.4018/978-15225-6064-7.ch012 Raj, E. D., & Babu, L. D. (2017). Issues in On-Demand Cloud-Based Gaming Storage: Quality of Service and Quality of Experience. In P. Krishna (Ed.), Emerging Technologies and Applications for Cloud-Based Gaming (pp. 115–138). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-0546-4.ch006 Rathee, R., & Rajain, P. (2019). Persuasive Advergames: Boon or Bane for Children. In P. Mishra & S. Dham (Eds.), Application of Gaming in New Media Marketing (pp. 77–94). Hershey, PA: IGI Global. doi:10.4018/9781-5225-6064-7.ch005 Rebekah, R. D., Cheelu, D., & Babu, M. R. (2017). Necessity of Key Aggregation Cryptosystem for Data Sharing in Cloud Computing. In P. Krishna (Ed.), Emerging Technologies and Applications for Cloud-Based Gaming (pp. 210–227). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-0546-4.ch010

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Reitman, J. G. (2018). Distributed Cognition and Temporal Knowledge in League of Legends. International Journal of Gaming and Computer-Mediated Simulations, 10(1), 23–41. doi:10.4018/IJGCMS.2018010102 Salo, M. (2017). Career Transitions of eSports Athletes: A Proposal for a Research Framework. International Journal of Gaming and ComputerMediated Simulations, 9(2), 22–32. doi:10.4018/IJGCMS.2017040102 Scholz, T. M., & Stein, V. (2017). Going Beyond Ambidexterity in the Media Industry: eSports as Pioneer of Ultradexterity. International Journal of Gaming and Computer-Mediated Simulations, 9(2), 47–62. doi:10.4018/ IJGCMS.2017040104 Senthilkumar, S., & Viswanatham, V. M. (2017). EAC-MPCG: Efficient Access Control for Multi-Player Cloud Games. In P. Krishna (Ed.), Emerging Technologies and Applications for Cloud-Based Gaming (pp. 106–114). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-0546-4.ch005 Sharma, S., & Somani, A. (2019). Gamification in Entertainment Industry: Glimpses From Indian Film Industry. In P. Mishra & S. Dham (Eds.), Application of Gaming in New Media Marketing (pp. 236–243). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-6064-7.ch014 Singh, P. K. (2019). Rhetoric of Advergames. In P. Mishra & S. Dham (Eds.), Application of Gaming in New Media Marketing (pp. 36–55). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-6064-7.ch003 Singh, S., & Saluja, D. (2019). Effects of Social Media Marketing Strategies on Consumers Behavior. In J. Thakur (Ed.), Modern Perspectives on Virtual Communications and Social Networking (pp. 146–173). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-5715-9.ch006 Smith, M. J., Birch, P. D., & Bright, D. (2019). Identifying Stressors and Coping Strategies of Elite Esports Competitors. International Journal of Gaming and Computer-Mediated Simulations, 11(2), 22–39. doi:10.4018/ IJGCMS.2019040102 Stahlke, S., Robb, J., & Mirza-Babaei, P. (2018). The Fall of the Fourth Wall: Designing and Evaluating Interactive Spectator Experiences. International Journal of Gaming and Computer-Mediated Simulations, 10(1), 42–62. doi:10.4018/IJGCMS.2018010103

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Talbot, T. B. (2017). Making Lifelike Medical Games in the Age of Virtual Reality: An Update on “Playing Games with Biology” from 2013. In B. Dubbels (Ed.), Transforming Gaming and Computer Simulation Technologies across Industries (pp. 103–119). Hershey, PA: IGI Global. doi:10.4018/9781-5225-1817-4.ch006 Talbot, T. B., & Rizzo, A. S. (2019). Virtual Standardized Patients for Interactive Conversational Training: A Grand Experiment and New Approach. In B. Dubbels (Ed.), Exploring the Cognitive, Social, Cultural, and Psychological Aspects of Gaming and Simulations (pp. 62–86). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-7461-3.ch003 Tan, W. H. (2019). A Coaching Framework for Meta-Games: A Case Study of FPS Trainer. In W. Tan (Ed.), Design, Motivation, and Frameworks in GameBased Learning (pp. 184–212). Hershey, PA: IGI Global. doi:10.4018/9781-5225-6026-5.ch007 Tomazic, T., Druks, L., & Vilela, N. B. (2019). Public Relations and Advertising in the Context of E-Sports. In R. Gopalan (Ed.), Intimacy and Developing Personal Relationships in the Virtual World (pp. 84–95). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-4047-2.ch005 Turkay, S., & Kinzer, C. K. (2017). The Relationship between Avatar-Based Customization, Player Identification, and Motivation. In B. Dubbels (Ed.), Transforming Gaming and Computer Simulation Technologies across Industries (pp. 48–79). Hershey, PA: IGI Global. doi:10.4018/978-1-52251817-4.ch003 Vera, J. A., Terrón, J. M., & García, S. G. (2018). Following the Trail of eSports: The Multidisciplinary Boom of Research on the Competitive Practice of Video Games. International Journal of Gaming and Computer-Mediated Simulations, 10(4), 42–61. doi:10.4018/IJGCMS.2018100103 Waldrich, H. (2017). The Home Console Dispositive: Digital Games and Gaming as Socio-Technical Arrangements. In M. Spöhrer & B. Ochsner (Eds.), Applying the Actor-Network Theory in Media Studies (pp. 174–196). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-0616-4.ch011 Waldrich, H. (2019). The Socio-Technical Arrangement of Gaming. In M. Spöhrer (Ed.), Analytical Frameworks, Applications, and Impacts of ICT and Actor-Network Theory (pp. 52–86). Hershey, PA: IGI Global. doi:10.4018/9781-5225-7027-1.ch003 180

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Wexler, B. E. (2017). Computer-Presented and Physical Brain-Training Exercises for School Children: Improving Executive Functions and Learning. In B. Dubbels (Ed.), Transforming Gaming and Computer Simulation Technologies across Industries (pp. 206–224). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-1817-4.ch012 Zelinski, E. M. (2017). Games and Other Training Interventions to Improve Cognition in Healthy Older Adults. In B. Dubbels (Ed.), Transforming Gaming and Computer Simulation Technologies across Industries (pp. 192–205). Hershey, PA: IGI Global. doi:10.4018/978-1-5225-1817-4.ch011

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About the Authors

David J. Finch holds a PhD in management and is an active educator, scholar and practitioner. He currently holds several academic appointments including Associate Professor at Mount Royal University’s Bissett School of Business in Calgary, a Visiting Fellow at the Henley Business School at the University of Reading (UK) and an Adjunct at the Gordon S. Lang School of Business and Economics at the University of Guelph. Dr. Finch is also the Associate Director of the Institute for Innovation & Entrepreneurship at Mount Royal. Dr. Finch has authored over 50 scholarly papers and published in journals such as the Academy of Management Learning & Education, Journal of Business Ethics, Journal of Marketing Management, Journal of Sport Management and the Corporate Reputation Review. Prior to joining academia, Dr. Finch held progressively senior roles in areas of corporate strategy in Canada, the U.S. and the U.K. with Bell Canada Enterprises, Rogers Communications and Harris Corporation and he was a founding partner of T1 Agency. Norm O’Reilly is the Assistant Dean of Executive Programs & Professor at the College of Business and Economics at the University of Guelph. Previously, he was the Richard P. and Joan S. Fox Professor of Business and Chair of the Department of Sports Administration at Ohio University’s College of Business. Dr. O’Reilly holds a PhD in Management from the Sprott School of Business at Carleton University. He currently holds visiting/adjunct appointments in Canada, the United States and Australia, and also holds the CGA/CPA Accounting Designation. Dr. O’Reilly has expertise in a range of business topics, including analytics, marketing, sponsorship, social media, sport finance, social marketing, tourism management, and management education. He has authored or co-authored eight books and more than 100 peer-reviewed journal articles. Dr. O’Reilly has worked closely with industry (e.g., Nike, UFC, Nissan) as Partner Consultant at the T1 Agency. He also

About the Contributors

acts as a specialist on legal cases and has sat on the boards of many sport organizations. Dr. O’Reilly was ‘Assistant Chef de Mission’ for the Canadian Paralympic Team headed to the 2016 Paralympic Games in Rio, Brazil. Gashaw Abeza is an Assistant Professor at Towson University. Dr. Abeza holds a PhD from the University of Ottawa (Canada) and has held appointments at Southern Methodist University, University of New South Wales (Australia) and Addis Ababa University (Ethiopia). His research interest is in marketing communication, with specific areas of expertise in social media related to sponsorship, ambush marketing, branding, relationship marketing, and research methods in sport. His work is published in peer-reviewed journals and edited volumes in the area. Prior to returning to academia, Dr. Abeza had a successful 7-year career as an international sport manager and marketer, highlighted by his work in more than 15 countries and his role as an organizer for global sporting events. Brad Clark is an Associate Professor of Broadcast Media and Journalism at Mount Royal University in Calgary (Canada). Dr. Clark has a doctorate from Charles Sturt University in Bathurst (Australia). His doctoral dissertation examined network television news representations of Indigenous peoples and racialized groups in Canada. Prior to entering academia, Dr. Clark spent six years as a national reporter for CBC Radio based in Calgary. He covered the oil and gas industry from Caracas, Houston; Tuktoyaktuk, N.W.T. and Washington D.C. His career at CBC started in Edmonton in 1992, where his duties included reporting for an award-winning radio investigative team. At CBC his personal interest in sports often crossed into his professional life, too; he reported on NHL lockouts, Stanley Cup finals, the 2002 Paralympic Games in Salt Lake City, and the 2004 Summer Olympics in Athens. David Legg holds a PhD from the University of Alberta in adapted physical activity and sport management. Dr. Legg is a Professor at Calgary’s Mount Royal University and has held visiting or adjunct roles at Dalhousie, Memorial, Deakin and Charles Universities. For the past five years David has also been a visiting scholar for the Erasmus Mundus Masters in Adapted Physical Activity at Katholieke Universiteit Leuven in Belgium. David was President for the Canadian Paralympic Committee from 2010 to 2014, Board Member for the 2015 Toronto Pan/Parapan American Games, Member of the International Paralympic Committee’s Sport Science Committee and a Leadership team member of Canadian Sport for Life. 183

184

Index

5G 149-150, 155-156

A activation 93-95, 98, 100-104 agency 92, 95-96, 104 AnyKey 121 artificial intelligence 149-150, 154 associations 4, 18, 39, 100 athletes 19, 31, 33-36, 46, 56, 59, 61, 70, 91-92, 99-100, 122, 131, 136, 138, 140-143

B Blizzard Entertainment 76, 119 blockchain 149-152

C celebrities 36, 39, 59, 81, 102 clubs 35-36, 38, 46, 53-54, 99, 160

ELEAGUE 34, 70, 79 Electronic Arts 60 endemic media 70, 82, 85 Epic Games 8 ESPN 3, 19, 36, 67, 70-71, 79, 108, 157 eSports ecosystem 5, 7-9, 13, 17, 20, 150-151 eSports media 17, 66, 68, 70, 72-73, 75, 77-78, 80-85, 107-109, 161 eSports publishers 14 evaluation 95-96, 103

F first-person shooter 49, 114 Fortnite 8-9, 15-16, 34, 36, 38, 75, 111112, 137-138 FUTURE TRENDS 150

G GamerGate 114, 117, 124-125

D

H

Dexerto 80 Disney 55, 71, 79 Dot Esports 70, 80-81 doxing 114

homophobia 85, 107, 109, 114, 119-121, 123, 125

E

injury 134 interactivity 73 internet of things 150 investors 15, 39, 44-49, 58-60, 63, 159

economy 34, 40, 44-45, 49, 57, 62-63, 102, 161

I

Index

J journalism 79, 117

revenue streams 45, 75, 81-82, 160 Riot Games 14, 31, 55, 57, 75, 83, 100, 112, 115-116

K

S

Kotaku 70, 80, 115, 117, 120

servicing 93, 95, 103 simulated professional sports 49 sponsee 92 sponsor 38, 52, 56-57, 61, 92-97, 99-100, 102-103, 138 sponsorship 34, 36, 52-53, 56-57, 75, 80, 91-93, 95-104, 138-139, 160-161 stakeholders 18, 28, 30-31, 37-38, 40-41, 51, 57, 62, 75, 77, 161

L League of Legends 9, 14-15, 17, 31, 38, 54, 58, 66, 70, 81, 100, 116, 118 livestreaming 77, 79

M mainstream media 66, 70-71, 122-123 major costs 44-45 manufacturers 17, 32, 99 mental health 124, 131, 134, 136-140, 149, 159 misogyny 85, 107, 109, 114, 117, 120-121, 123-125, 159

O Overwatch 14-15, 18, 36, 38, 40, 48, 70, 75-77, 79, 112, 115, 118, 120-121, 132, 140

T TBS 71, 79 The Esports Observer 80-81, 123 trolls 117 Twitch 3, 17, 19, 33, 45, 52, 61, 66-77, 7980, 84, 97, 99-100, 107-116, 119-121, 156-157, 160

V Valve 60, 158 virtual reality 149-150, 156

P

W

physical health 80 privacy 149-151 property 13, 31, 57, 78, 92-93, 95-96, 9899, 102-103 PS4 19 publishers 8, 13-14, 18, 31-33, 38-39, 60, 66-67, 70, 75, 81-82, 108, 111, 117, 120, 151

wellness 2, 131-132, 141-143, 149, 159, 162

R

X Xbox 19

Y YouTube 17, 19, 33, 52, 66, 68-70, 73-75, 79-80, 114-116, 160

racism 85, 107, 109, 114-115, 120-121, 123-125 real-time strategy 49

185