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The rise and rise of eSports: the new media industry favourite- part 2

October 30, 2019

Dhaval Ponda   

Global Head, Media and Entertainment Services, Tata Communications

Don’t miss out on part 1 of ‘The rise and rise of eSports’, where Dhaval Ponda gives the context as to why the gaming phenomenon has become so important to broadcasters.

Previously, I wrote about the immense rise of eSports through the likes of Youtube, Twitch and Mixer, and also some of the the challenges and barriers the industry faces including the lack in superior connectivity, the complexities in media rights ownership, and the need for a lean and cost-efficient business model. But with challenges there’s always solutions and the opportunities for broadcasters makes them worth finding.

A lesson from South Korea

As always, there is a lot to be considered. On one hand there is a need for achieving scale, efficiency and customer delight and on the other, there is a need for ensuring revenue balances out the costs of these events.

“South Korea is one country that has embraced eSports and made moves to integrate the industry as an intrinsic cultural trend; tapping into new fans and enhancing the experience of current fans.”

A lot of this has stemmed from within the industry itself but more traditional sports could learn from this.

In Seoul, there is a dedicated eSports stadium, Nexon Arena, which has hosted eSports events since 2013. Founded by its namesake, a South Korean gaming company, the stadium hosts events for multiple games including StarCraft II and League of Legends. Unlike other sports, there is no traditional stadium format, this changes all the time and the infrastructure within the stadium has to be flexible to accommodate this.

There is a dedicated eSports channel, OGN, pioneering the new way eSports is seen. OGN stemmed from one program following the rise in popularity of StarCraft in South Korea and progressed to a stand-alone channel estimated to spend upwards of $100 million each year to broadcast and produce live eSport events. They’re now looking towards the North American market.

A governing body, Korean eSports Association, has been established to regulate and manage the competitive side of the sport and it’s a member of the Korean Olympic Society – a sure-fire sign of how seriously it’s taken in the country, compared with elsewhere.

“While the technology which can make all of this possible exists in theory, the infrastructure in other global cities doesn’t yet exist to the scale this fast-growing sport needs.”

South Korea tops the international table of internet speeds with an average of 26MBps. High speed internet is invaluable for gamers – it stops lag and therefore gives them the competitive edge. Additionally, its widespread broadband infrastructure means 90% of its population are internet users, therefore more people are likely playing.

The road ahead

In South Korea, eSports has already woven itself into the mainstream and it’s catching up fast in other countries. London Premier League Club, Tottenham Hot Spurs, will be hosting eSports at its new stadium this year, Reuters has created an eSports Wire and what may be astounding to some, a number of universities across the US are starting to offer eSports scholarships. When the topic is so exciting and such a game changer for the future, it is impossible to resist some crystal ball-gazing.

Big data and AI machine learning: Traditional sports are not just about practice, they’re also based on strategy and analytics. More than others, eSports is built for deep data analysis. Using AI machine learning, the industry and players themselves can track how they play and use the analytics to improve their play, track their competitors and change the gaming experience to something more customised.

“And not just improving play, AI can be used to meet the ever-increasing demand for highlights and conversations – ensuring that “best bits” can be pulled together almost instantly and used to engage fans in real time, and specific to their interests with tailored packages.”

This will also mean that technology and analytics will uncover many new pricing models and opportunities for additional revenue streams, for example team analysis in franchised leagues to ensure there will be a worthwhile ROI. It will serve as a guide for investors and brands which will evolve into more lucrative deals – not unlike how YouTube evolved over the past few years.

Celeb status growth: The old view of a gamer as an awkward teen in his room is gone, players are now appreciated for the talent, skill and commitment it takes to get to the top. Even pros in traditional sports like Formula 1 star Lando Norris cites eSports as a key contributor to him learning his craft. Using the human stories from the players and their social media presence has the ability to get deeper fan engagement.

Olympic Games: Despite it not being on the list yet, it’s looking likely to be credited as an Olympic Sport in the coming years, predicted to be in action at Paris 2024. This will see it garnering an even bigger widespread appeal and respectability.

Ultimately the money doesn’t lie. The predicted growth rate and rapidly rising prize pots indicate that eSports is only set to get bigger. This is a classic case of audience demand, creating gaps in the market for us to fill, by expanding our own industries and collaborating with new partners. And while there are challenges ahead, the potential opportunities for the broadcasting industry are vast.

 

Read more about the potential for broadcasters in the eSports industry in part 1 of The rise and rise of eSports: the new media industry favourite.