Esports: The New Frontier of Sports and COVID-19’s Effect on Growth

By: Bryce Wasserman

When traditional sports were paused in March, sports fans across the globe began trying to fill the void that the departure of sporting events left. While some watched marble racing or cornhole, many sports fans switched their focus to Esports games. Esports leagues have been fighting to grow against traditional sports, and this pandemic has been the perfect opportunity to increase their footprint in the sports world. However, COVID-19 has still negatively affected Esports league operations in a similar way to traditional sports leagues.

In a time full of uncertainty and turmoil in sports, Esports have seen a massive growth of viewership. To preface the broadcasting statistics, one must understand the video game market’s size. According to the World Economic Forum, “the global video game market is forecast to be worth $159 billion in 2020.” This is four times larger than all box office revenues in 2019. Regarding Esports revenues, close to 75% comes from advertising and broadcasting. This model has helped Esports earnings skyrocket due to large increases in viewership. Twitch, one of the main Esports streaming websites, experienced an estimated 31% growth in viewership during the month of March. This growth is seen from March 8 to March 22 where Twitch total viewership went from 33 million to 43 million. Many of these viewers are new to Esports, which is not shocking considering many sports fans needed a new outlet when March Madness was cancelled on March 12. The true test for whether Esports are here to stay will be when traditional sports games return on television in the coming weeks. It will be interesting to follow the viewership statistics and whether there is a sharp decline in the coming months. The Esports viewership statistics that are released after traditional sports return will be telling as to how many casual fans Esports can retain.

While Esports have pivoted and put on live events during the pandemic better than any other professional sports league, Esports leagues, teams, and players still face many problems similar to the traditional sports leagues. Esports events have sold out seats in massive arenas across the world. Like all other professional sports, Esports leagues have been unable to host live events and sell tickets to fans. For example, the 2020 League of Legends Championship is supposed to be held at Shanghai Stadium in front of over 56,000 people. This event is now in serious jeopardy. The financial impact in the form of lost ticket and gameday merchandise sales is similar to other traditional professional sports leagues. When Esports events return to live venues, they will have the same return to play issues seen in other sports. There must be protocols in place to protect players, fans, and staff from the virus. This will be especially important due to the intimate nature of these Esports events. For example, fans are placed much closer to the action than other sporting events and engage with players by taking pictures and asking for autographs after the game. Establishing protocols that will ensure safety will be a large hurdle to cross if the goal is to have stadium events soon.

From a legal standpoint, Esports player contracts are incredibly intricate and factor in many of the unique aspects of a player’s life. Sample player contracts place a large emphasis on marketing and promotional requirements. Moreover, teams sometimes choose a streaming service and require players to stream a minimum number of hours in order to stay in the forefront of the industry. This is very interesting because it is a contractual performance obligation outside of playing in a normal event. Imagine the Dallas Cowboys telling Dak Prescott that he must play in the local Wednesday night flag football league during the off-season. That situation would obviously never happen and makes the clause unique to Esports contracts.

Esports have enjoyed a large boost in their viewership since the start of the pandemic because of their ability to adjust and broadcast live events online. The future of Esports will be determined by how the leagues handle their return to play protocols along with their ability to retain newly gained fans.

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