Saturday 14 August 2021
Market will quintuple by 2030
Why e-sports are an opportunity for the Olympics
By Sebastian Schneider
The Olympics are battling for the younger generation’s attention. After climbing and skateboarding, esports could also help. Around two billion gamers play video games. A huge market that could also be a great opportunity for the IOC.
The International Olympic Committee (IOC) is at least trying. Every effort is made to reach the “young people”. The games in Tokyo therefore included skateboarding, sport climbing, surfing and 3×3 basketball for testing purposes, and breakdancing will also take place in Paris in 2024. New sports are always being added to attract the attention of the younger generation. But there are also other interests behind it. Most of the IOC’s sports associations are economically dependent on the games. You need the TV billions that are made there every four years and are dependent on the mega-event being marketed lucratively in the future as well.
At the games in Tokyo it was mixed. While ARD and ZDF in Germany with the TV ratings were satisfied, the US broadcaster NBC had advertisers compensate for lack of interest. There is a simple way of preventing dwindling interest, especially among younger generations. The head of an IOC working group spoke of it in 2018that there are 2.2 billion gamers worldwide, 150 million of them are active in esports.
According to Statista, worldwide sales in e-sports are $ 947 million. Compared to professional football, this is of course not an outstanding number, but it looks different with a view to Olympic sports such as rowing, archery or climbing. In addition, esports is only just beginning to develop. “In the professional sports area, there are different studies, for example by the Canadian research institute Emergen Research, assume that the market volume will have quintupled by 2030 at the latest. That would correspond to at least 5 billion US dollars, “says Timo Schöber, who teaches e-sports as a lecturer and represents various associations as press spokesman, ntv.de.
Also one PWC study confirms that the industry continues to enjoy high sales growth. Broadcasting rights and sponsoring are decisive for this. This is exactly what works wonderfully in e-sports, explains Werner Ballhaus, global head of the entertainment and media division at PWC: “The entry barriers are very low for those interested, which enables further growth in live events.” Compared to 2018 to 2019, the industry’s turnover grew by 26.8 percent. Even if this has decreased significantly due to the pandemic, Ballhaus expected growth of 20 percent again for 2021 and 2022, as he explains to ntv.de. Overall, he predicts a turnover of 163 million euros in Germany in 2025.
“Not just sporting success”
A second important aspect that makes esports so successful is how contact with the fans is established. Unlike in classic sport, the bond is much closer. “E-sports teams not only rely on sporting success, but also create a sustainable economic ecosystem that enables close contact with fans, but also with broad masses of Generation Z,” says Ballhaus. That is exactly the target group that the Olympics are vying for. They are ahead of traditional sports on Tiktok, Youtube and Twitch. There they offer sponsors not only advertising space, “but also new opportunities for cooperation, such as the development of target group-specific products and services”. Often without going through agencies, publishers and marketers.
And so it is that almost four million people in 2020 saw the final of the “League of Legends” World Cup live. So if there is soon to be a break thanks, why shouldn’t the Olympic “League of Legends” also be played? Whether both are sports has been debated for a long time. A comparison to chess or archery is often sought, because the range of motion is rather limited there too. In the strategy game “League of Legends”, for example, two teams try to destroy the core of the opponent – and that with a mouse and keyboard. But this can no longer be dismissed as simple gambling. Physically it is quite exhausting: It takes enormous reaction times, lightning-fast movements on the controller and a keen sense of tactics. All of these skills also need to be trained.
According to the e-sports expert Schöber, this is “undoubtedly” sport. However, the established associations are there much more reserved. The German Olympic Sports Association (DOSB) in particular underpinned its reluctance in one go Expert opinion from 2019. Only the “virtual sports” are therefore compatible with organized sport. The DOSB does not want to decide whether e-sports can also be described as sport.
The situation is similar at the IOC. the Acting IOC President Thomas Bach said in 2018that computer games will in principle not become Olympic during his term of office (until probably 2025). The “red line” was drawn when violence was glorified, said Bach. That excludes “League of Legends” and “Counter Strike” completely, for virtual rowing or cycling there is at least the chance to perhaps be part of it as disciplines in the future.
E-sports expert Schöber cannot understand the separation. Sports simulations were part of it, “but they are niches in esports,” he says. He compares it with the analog world: “Imagine the Olympics without athletics, soccer, tennis, handball and swimming – how seriously would the sports world take the Olympic Games then?” From his point of view, one thing becomes clear above all: “The IOC and its president simply did not understand e-sports – neither economically, socially, or from a sports perspective.”
There is already progress elsewhere. For example, e-sports is on the agenda at the Asian Games in 2022, and there were even medals at the Southeast Asian Games in 2019. In the meantime, Bundesliga clubs no longer have their virtual departments just for sports simulations. For a long time, Schalke 04 was considered a pioneer, who bought their starting place in the European “League of Leagends” league in 2019. But they were the downfall of the relegated footballers. In June of this year they sold their starting place in the European “League of Legends” league for 26.5 million euros. Not because they weren’t successful, but to help finance the clammy professional soccer team. The remarkable thing is that Schalke only paid just under nine million euros for the starting place.
However, reservations remain – on both sides. On the one hand, as commercial as football has become in the meantime, it does not “belong” to anyone, not even the FIFA or UEFA associations. Meanwhile, the video game “League of Legends” is owned by the US company Riot Games, which is part of the Chinese company Tencent. That, in turn, is also under the influence of the Chinese government.
On the other hand, the IOC rejects the most important esports disciplines. And so can’t count on the large fan masses that the stars are already attracting elsewhere. The question is whether it will then be worthwhile for e-athletes. Because their industry and their sales will continue to grow, their self-organized events will continue to fill halls, and their prize money will continue to be highly endowed. Schöber is nevertheless optimistic: “The decision-makers who are now stuck with outdated opinions and thought patterns will not sit there forever. And in contrast to many traditional sports, esports is growing and growing.”
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