Esports: Bigger Than You Think

Current market projected to surpass $1 billion in 2017

Ted Leonsis
Jun 29, 2017 · 4 min read

I have been following the competitive gaming industry and esports for many years — dating back to my days at AOL — but in the past couple of years I have been paying much closer attention and more recently was vocal about my interest in pursuing ownership of a franchise. I was excited when good friend and fellow sports team owner Peter Guber and I were able to lead an investment group to form aXiomatic and then gain majority interest in Team Liquid, one of the most successful global esports franchises.

At the recent Hashtag Sports thought leadership and innovation conference, there was a discussion about what’s next in sports and one session was entitled “Why the Revolution Will Not Be Televised.” The next generation of fans will be connected to OTT platforms, something esports enthusiasts have been using for several years. My son, Zach, participated in the conference, and you can read more at SportsTechie: Why Monumental Sports & Entertainment Embraces Esports.

I’ve always enjoyed video games and multi-player gaming and love the way the technology has evolved. I am confident our diverse partnership group can help create a variety of new experiences for esports fans. I’m hoping we can help the industry grow, share some of the great player storylines, provide additional behind-the-scenes coverage of teams, expand distribution outlets, host events and increase merchandising opportunities.

The esports industry is much bigger than most people think. The current market is $892 million and projected to surpass $1 billion in 2017, according to a SuperData report, which states that Asia currently accounts for $328 million in revenue, followed by North America ($275 million) and Europe ($269 million). SuperData’s research yielded that sponsorship and advertising accounted for $661 million, which certainly places esports among top-tier sports. North America is a fast-growing market with plenty of opportunity and potential.

Our Monumental Sports Network’s OTT platform will play an important role in driving spectator experiences and in storytelling related to teams, players and competitions. There already exists interest from mainstream media; earlier this year ESPN launched an esports vertical to meet growing audience interest, while TBS and Twitch (an Amazon subsidiary) broadcast competitions and tournaments. Major League Baseball’s BAMTech recently completed a reported $300 million exclusive streaming rights and development agreement with Riot Games, the developer of League of Legends. Media and distribution rights will continue to escalate, and I envision traditional and nontraditional outlets will enter the live streaming conversations.

We hope to deliver amazing content surrounding Team Liquid, which has 50 professional players from more than 15 countries. Our players compete at the highest level in StarCraft 2, League of Legends, Dota 2, Hearthstone, CS:GO, Heroes of the Storm, Overwatch, Halo, Street Fighter and Smash. They come from the Netherlands, Germany, Norway, Denmark, Poland, South Korea, Finland, France, Ukraine, Sweden, Bulgaria, Jordan, Lebanon, Romania, Canada and the United States.

Major professional sports leagues are taking notice. In February the NBA announced the creation of NBA 2K eLeague, the first of its kind for a U.S. professional sports league. NBA commissioner Adam Silver is committed to growing the NBA globally, and this is another forward-thinking idea that will have some of the best gamers from around the world representing NBA teams. There are an estimated 80 million American basketball fans, and 9.6 million are also connected to esports. NHL commissioner Gary Bettman envisions something similar for hockey. Soon we will be looking for a starting lineup and John Wall’s and Alex Ovechkin’s esports equivalents.

We certainly will be scouting differently. When it comes to the basketball court, do you consider yourself a little short? Perhaps you can’t execute the pick and roll. Not enough hops for the windmill jam. Unable to stop and pop. Droppin’ a dime just means you lost 10 cents. Or perhaps you have the flow but can’t skate well enough. Your clapper couldn’t break a pane of glass. Top shelf is really where you keep the peanut butter. In your daily routine a grinder is a warm sub and sauce is for your barbecue. That’s ok, soon there will be an opportunity for you to show off your gaming skills and be part of our organization. You might be delivering a “dagger” for the eWizards or going bar down for the eCapitals.

That may sound far-fetched to some of you, but it’s right around corner. Esports have incredible global interest, from both a participation and audience perspective. It’s young. It’s global. It’s digital. Approximately 75% of the enthusiasts are between 18 and 34 years of age. Nearly 50% of fans spend their free time centered around esports and are considered in the “high income” category (compared with 22% of the U.S. population). There are more than 200 million esports viewers worldwide.

The overall prize money that was awarded in 2016 may surprise some folks, too: Dota 2, $37 million; Counter-Strike: Global Offensive, $14.6 million; League of Legends, $9.8 million; Heroes of the Storm, $4.3 million; Call of Duty: Black Ops III, Hearthstone: Heroes of WarCraft and StarCraft II all over $3 million in prize money. Five players in 2016 earned more than $1.8 million, and 160 players earned $100,000 or more.

Players typically earn a salary from their team, garner tournament prize money, have sponsorship deals and are compensated for running successful YouTube channels and Twitch streams. They truly are making their childhood dream come true — playing video games for a living. Esports have become so big that this is viable. These are truly professional players.

Riot Games reported that its 15-day, 2016 League of Legends World Championship generated 396 million cumulative daily unique impressions, was broadcasted in 18 languages, distributed $6.7 million in team prize money and attracted 43 million unique viewers. For comparison’s sake, The New York Times reported that Game 7 of 2016 NBA Finals between Cleveland and Golden State attracted an average of almost 31 million viewers (44.5 million peak), the largest for the finals in 18 years.

Esports: Bigger than you thought?

Ted Leonsis

Written by

Entrepreneur, Sports Team Owner, Philanthropist, Venture Capitalist, and Filmmaker. Follow me for regular updates from my blog, Ted's Take.

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