eSports: The Power Of The Community
Published 19th October 2015
Why is competitive multi-player video gaming (eSports), whereby players and teams compete in leagues and tournaments using their skills to win monetary prizes, currently generating such hyperbole? Firstly, competitive multi-player video gaming has been around for over 30 years. It first appeared in 1980, with the iconic upright cabinet game Space Invaders, manufactured by Taito Corporation of Japan. The first large-scale Space Invaders video game competition was for 10,000 players. This was followed by another Japanese multi-national, with the Nintendo World Championships held in 29 cities in the USA in the early 90s. Of course, technology accelerated the competitive element, in particular from 1993 when Netrek, the first online game for up to 16 players, delivered true multi-player capability, multi-directional shooters and team-based real-time strategy games. The key takeaway here is the multiplayer feature. This not only provided the platform to compete but the ability for a community to be born.
The concept of being able to share the same interests and beliefs has resulted in vast eSports communities in the tens to hundreds of millions around one particular video game franchise. We should also point out; video gaming did have interest from television broadcasters at the turn of the millennium, but failed to catch the imagination of the mainstream public. The pivotal point in growth was social media and technology. In particular, YouTube and the live video streaming platform Twitch (launched 2011). Prior to Twitch, even allowing for the multi-player capabilities, the playing of video games was solitary, until video broadcasting yourself doing so to millions of potential like-minded participants became a reality. It is this socialization factor, which is so integral to the experience of the smartphone-connected generation which desires on-demand entertainment and sharing of experiences, that has propelled eSports to stellar growth.
Another factor that has been prevalent in video gaming for several years, namely POV or point-of-view, where the game experience is seen through the characters’ perspective or an embodied second person point-of-view, has also helped establish the creation and sharing of content as innate behaviour in the social economy.
Video gaming is the new entertainment
Video gaming proclivity is everywhere in our digital and connected lives. It resides in our smartphone and smartwatch; the home either as a games console or browser-based app on your smart television. It infiltrates the workplace and in some European countries is being introduced into the primary schooling system. If you consider one market, the USA, it is reported that 155 million Americans play video games. Compare this to daily fantasy sports; it is 3.5 times bigger than the fantasy sports market base of 40 million consumers! League of Legends, the world’s most popular eSports franchise, has a community of some 67 million players, playing every month. It is, therefore, a central digital entertainment experience and economy built around social communities.
Could eSports disrupt?
eSports could disrupt mainstream online gambling, especially sportsbooks which haven’t transformed since Betfair and the emergence of peer-2-peer betting, and there are some key reasons why sportsbooks may just struggle to appeal to this demographic. eSports is built around huge communitybased platforms, where fans and players can compete, socialize, engage and interact in real-time live chat and broadcast that social experience through live video streams. If we look at the sportsbook platform, the current gambling value exchange model has extremely low to zero socialization.
Think about placing an online sports bet, it’s just you the player versus the operator. It is a solitary activity within a sanitized and un-engaging experience; no live chat, no personal video stream, no sharing of your personal progress. Likewise playing slots or table games are further examples devoid of community entertainment for the eSports Millennial demographic. If you underestimate the power of interactive community business models, think again. Unikrn, a pure-play eSports betting site that is not even a year old, has recently reported amassing seven million players. That is the power of a community-based gambling entertainment offering.
Skin gambling and alternative currencies
Many sportsbooks perceive that fixed odds betting will be the product of choice for potential eSports bettors, or the hook by which to acquire consumers to their betting platforms. In the eSports supply chain, however, gambling services are in fact already well-developed. Skin gambling or skin trading is a popular form of betting within eSports, and has resulted in huge eBay-style community peer-to-peer marketplaces. Platforms such as CS: GO Lounge provide players with the ability to buy and sell digital items such as knives or guns related to the games Counter Strike or Dota2. The concept is that if you win, you gain more skins or a skin of a higher quality and price, all of which is based on a pool or pari-mutuel wagering system. They generate millions of dollars in betting trades per day. These providers within the skin trading vertical have amassed communities in the hundreds of thousands of players.
They have been developed from within the eSports ecosystems by developers, with the community at the heart of the betting or digital eSports betting experience. Furthermore Riot, the publisher of League of Legends, is forecast to make around $1billion in revenue from these so-called micro-transactions on digital goods related to the in-game play.
As we have witnessed, the online gambling industry has so far been reluctant to embrace other alternative value exchange models. This is the major challenge for existing or traditional sportsbooks, which in the main, present a very passive, solitary; non-community based betting experience for existing gamblers, never mind trying to acquire, convince and convert players or fans within the eSports ecosystem, who are used to community-based and active participation betting with forms of digital currencies such as bitcoin.
The digitally connected generation wishes instant gratification, social giving and the community at the heart of their digital entertainment experience, which includes betting products, which could mean traditional sportsbooks may just have to rethink their business models to win over this new digital consumer. eSports is more than just a fad as some industry observers have noted. It is as much a digital experience as a real-world experience. It’s both digital entertainment and gambling opportunity. It has the potential to reach millions of new customers for mainstream online gaming operators and affiliates. The challenge has only just begun.
“If you underestimate the power of interactive community business models, think again. Unikrn, a pure-play eSports betting site that is not even a year old, has recently reported amassing seven million players.”
“Skin gambling or skin trading is a popular form of betting within eSports, and has resulted in huge eBay-style community peer-to-peer marketplaces.”
“It is reported that 155 million Americans play video games. Compare this to daily fantasy sports; it is 3.5 times bigger than the fantasy sports market base of 40 million consumers!”