Insights is a weekly series featuring entertainment industry veteran David Bloom. It represents an experiment of sorts in digital-age journalism and audience engagement with a focus on the intersection of entertainment and technology, an area that David has written about and thought about and been part of in various career incarnations for much of the past 25 years. David welcomes your thoughts, perspectives, calumnies, and kudos at email@example.com, or on Twitter @DavidBloom.
Here in the week of E3, the videogame industry’s biggest conference, it’s time to ask if e-sports has finally broken through after years of underground but massive growth. It’s also time to wonder if Disney bet on the wrong horse when it bought Maker Studios instead of Twitch three years ago.
Yes, I know. If you’re over the age of 35, e-sports can seem mystifying. You likely can’t imagine anyone sitting in front of a TV (or computer) watching someone else sitting in front of a computer playing a video game. But as I’ve always said, why is it different than sitting in front of a TV watching someone play games such as football, basketball or baseball?(Full disclosure: I played all three sports growing up and am a gamer, too.) Or for that matter, why are e-sports different than participating in a dance or singing contest on a show such as The Voice?
I’d say the differences are nil. They’re all televised competitions with highly specialized and talented contestants, vying against others for victory, fame and increasingly considerable fortune. And these days, e-sports are hot.
Two weeks ago, Internet analyst Mary Meeker delivered her latest (and longest) State of the Internet presentation at the Code Conference, devoting about 20% of the presentation’s 355 slides to gaming and the rise of e-sports. It marked something of a mainstream tech endorsement of all that gaming has become, especially because Meeker credited the industry with spurring technological and cultural changes on fronts as diverse as virtual reality, analytics, and job training.
And as e-sports has grown, so have the rewards. The prize pool for The International, a tournament using Valve’s DOTA 2 game, has jumped from $2 million in 2011 to nearly $21 million last year. Wings Gaming, a five-person Chinese team that since has disbanded, received a record $9.1 million after winning last year’s tournament.
That’s a big number, though still far from top NBA players who have guaranteed multi-year contracts that can exceed $200 million. But what gets interesting here is the ability of these nascent e-sports players, leagues and their sponsors to connect directly with fans without needing a big traditional TV rights deal, like the ones weighing down ESPN’s bottom line.
Now ESPN is turning to e-sports as it tries to reconnect with all its lost younger viewers, who seemingly all went to watch League of Legends and DOTA 2 and CounterStrike tournaments.
Almost 80% of those who watched an e-sports contest in the past month were less than 35 years old. More than a quarter of them were between 10 and 20 years old. Among Millennials, the same percentage, 27%, have a “significant preference” for watching e-sports as they do for watching traditional sports. That’s the future of sports viewing.
And it may not just be the future. Already, Meeker said, some 161 million people globally watched e-sports last year, up 40% from 2015 and triple the number from 2012.
Last year’s world championships for League of Legends, which is owned by Los Angeles-based Riot Games, drew 43 million viewers. More than 20,000 watched it live in L.A.’s Staples Center arena, where not incidentally the NBA’s Lakers and Clippers play.
The signs of success are everywhere, but perhaps the most fascinating reason to look at the industry right now is the way it’s being treated by ESPN. It’s also a good time to think about what might have been, had the company’s leaders been otherwise focused.
ESPN has been going through painful contractions, shedding high-profile personalities and recently laying off about 100 people. At the same time, however, ESPN has aggressively expanded its e-sports coverage. Here in Los Angeles, ESPN’s sports-talk radio station broadcast live for multiple days from outside the E3 conference, inviting a string of gamer notables to talk about the business. Rocket League, a two-year-old game with 6 million users that is creating its own e-sports league, was a major sponsor.
On-air guests included actor and former NBA star Rick Fox, talking about his two-year-old e-sports investment, as well as YouTube star Justine Ezarik, whose online channels include iJustine Gaming. Others included the Electronic Arts execs running the Madden NFL game, and a game reporter from Mashable.
Rick Fox isn’t the only NBAer with an e-sports interest either. In February, the league itself partnered with game developer TakeTwo to create a new e-sports league focused on TakeTwo’s NBA-licensed videogame. The NBA’s Philadelphia 76ers and Miami Heat, along with many players, have invested in e-sports teams or leagues, as have soccer clubs in Germany and Italy.
Meanwhile, 10 million people every day watch the game-oriented live-streaming site Twitch. In these days of fractured audiences and attention, 10 million daily viewers is A Very Big Thing.
That 10 million is considerably more than the usual audience for ESPN, which has seen its subscriber base drop 12 million the past five years as people cut the cord. The network’s marquee nightly show, SportsCenter, has seen ratings drop by a quarter.
If, after all this, you’re thinking that Twitch would have been a good thing for Disney to buy instead of the multi-channel network Maker Studios, well, hindsight is 20/20. That said, the vision is particularly sharp on this one.
I was told at a YouTube event this week that one motivation for Disney CEO Bob Iger’s interest in the Maker deal was to goose his somnolent media empire into the online era. For a few hundred million dollars (chicken feed for a company with a $165 billion market capitalization), it was an inexpensive motivator.
Of course, having served its purpose, once-swashbuckling Maker is now radically downsized, tucked meekly into a corner of Disney’s newest digital unit.
Amazon, meanwhile, is looking like it bet smartly on the future. Nearly three years ago, it swiped Twitch out from under a supposed “done” deal with Google. It paid a little less than $1 billion (roughly Maker’s price had it hit all the earn-out incentives in its deal).
Now Amazon is figuring out how to do more fun things with Twitch, like test-screening all its new pilots there, showing old episodes of cooking queen Julia Child, and creating new sections for music and life-blogging performers.
Twitch also features lots of e-sports tournaments among its mass of programming by 2.2 million unique monthly broadcasters. Pairing that power with ESPN would have made quite a team. But like a mythical NBA superteams that sports fans talk about creating to take on the newly victorious Golden State Warriors, this one won’t ever happen either.
In the meantime, it’s fun to watch what’s happening, and how even stodgy ESPN is trying to be relevant in the sports leagues of the future.