In 2019, at a time when Netflix accounted for approximately 10% TV screen time in the United States, the media and production company mentioned in its shareholders report that Netflix competes with (and loses to) Fortnight more than HBO. This means the digital content company views an esports game as its competitor as compared to other streaming or content providers.
Fortnight had apparently 200 million people who had played its free game. In comparison, Netflix reported 139 million subscribers at the close of 2018.
This was just one of the many signs of the boom of esports.
As the world stuttered to a standstill following the widespread global COVID-19 pandemic, esports is exploding with worldwide market revenue of an estimated US$ 1.06 billion.
From Offline to Online
Esports was not spared from having to cancel or postpone scheduled physical tournaments and competitions due to health concerns. However, its versatility enabled tournament organisers to shift events online for them to proceed remotely.
For example, the ESL One Birmingham 2020 was supposed to take place in May 2020 but was affected by the COVID-19 outbreak. As a replacement, ESL launched four online regional leagues to run across Europe/CIS, China, North America and Southeast Asia from May to June 2020.
Technical issues such as connection latency are to be expected. From a legal standpoint however, contractual obligations will need to be reviewed and potentially re-negotiated as parties involved in these tournaments continue their efforts to maximise content value for rights holders and to mitigate the commercial impact.
E-version of Traditional Sports
The talk of the town during the lockdown phase (or Movement Control Order (MCO) here in Malaysia) is about pivoting one’s business, predominantly through digitisation. Traditional sports were no different.
Basketball and football have already had their electronic version in the market for years through NBA2K and FIFA. But with the cancellation or postponement of many sporting events due to the global outbreak, more traditional sports have turned to esports in efforts to stay connected and maintain excitement.
One sport that has taken pole position in this respect is Formula 1, who replaced cancelled races by featuring its professional drivers along with several celebrities in a ‘Virtual Grand Prix’. Their early investment into esports infrastructure meant that these racing leagues were able to pivot quickly in delivering content virtually.
NASCAR recently launched the eNASCAR iRacing Pro Invitational Series – a simulation-style esports series for its drivers to compete in after the 2020 season was halted due to the pandemic. FOX Sports announced that the inaugural event on 22 March 2020 drew 903,000 viewers, making it the highest-rated esports TV program in history to date. This may be a clear indication of viewers’ readiness to watch esports on television.
NASCAR’s success shouldn’t come as a surprise, given that the eNASCAR Coca-Cola iRacing Series, which has been running since 2010 is the longest-running officially sanctioned esports racing series.
Although COVID-19 has altered the way we experience and engage with sports, we envision sports will maintain both in-person events alongside the electronic version to broaden their pool of fans.
The future of sports broadcasting is expanding as Twitch has been actively taking steps to acquire more rights for live sports and contents. As the world’s leading live streaming platform, Twitch signed deals to air friendly football matches featuring French Ligue 1 clubs, Dijon FCO and Olympique Marseille.
The subsidiary company of Amazon seems to be pushing for sports dominance with the launch of TwitchSports, a dedicated sports channel, and the signing of strategic partnerships with Real Madrid, Paris Saint-Germain, Juventus and Arsenal. Thanks to Amazon’s partnership with the English Premier League (EPL), Twitch was also awarded the right to broadcast four EPL matches when the tournament restarted in June 2020 and the matches were made available free of charge.
Twitch was formerly popular only for video games but is expanding its audience and driving integration with traditional sports by making NBA, NHL, RFL, UFC and NWSL content available on its platform.
Brands are also starting to see the power of esports. Gaming and tech-related companies will look to strengthen their investment whilst non-endemic brands are seriously looking to esports as a new market to tap into for fan interaction and engagement.
For example, Visa recently ventured into its first participation in the esports arena by collaborating with EVOS Esports in Indonesia.
One thing for sure is that as long as an internet connection is available, there is a very high likelihood that someone is gaming through it. As viewership and influence through esports increases, exposure to the fan base will likewise increase.
Whilst esports may have started as an alternative platform to capture the younger demographic or as a solution to fill the void from the shut-down of traditional sports, esports has integrated itself into the mainstream and looks to be thriving.
Far from its full potential, future opportunities related to broadcasting, sponsorship, licensing, ticket and merchandise sales are also likely to grow in this fledgeling industry.
By Lesley Lim
Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.