With the esports industry on the rise, how do traditional sports profit from it?

With the growth of the esports industry in recent years, traditional sports have encountered a new competitor with which it has to vie for people’s attention. In 2015 esports generated about $400 million in global revenue according to Deloitte. The company projected this to increase with 25 percent in 2016. Although revenue still lags behind major American Leagues and European football, esports is ‘comparable to some traditional sports’ when it comes to its reach. On a regular basis the industry reaches tens of millions of people, with occasionally over a hundred million. Moreover, esports has found, in addition to its distribution via specific new media channels like Twitch, a way into traditional media (esports is broadcasted on sports channels like Fox Sports).

It is mostly the younger generation that takes interest in all that is esports. While popular games like Call of Duty and League of Legends are far removed from traditional sports, other games like EA Sports’ FIFA, Madden NFL and NBA 2K are directly based on these sports. This gives traditional sports the opportunity to target a percentage of the esports fanatics and profit from it.

Contracting esports players and eLeagues

The rise of esports, including those games based on traditional sports, has given sports leagues and teams the opportunity to invest in a new product in a new market.
Bundesliga club VfL Wolfsburg was the first football organisation to contract a professional esports player and many football clubs have since followed. This has since resulted in the launch of multiple competitions around football games, including the launch of the Dutch E-Divisie earlier this year (broadcasted on YouTube, Twitch and Fox Sports).

FIFA Interactive World Cup

FIFA has been active in esports for much longer. In 2004 they organised, together with partner and FIFA-game developer EA Sports, the first edition of the annual FIFA Interactive World Cup. Since then the event, where FIFA-gamers compete with one another, has grown substantially. The 2017 edition takes place in London and the winner receives $200,000 and gets to attend the federation’s annual award ceremony.

Many football clubs have contracted esports players and several eLeagues have been launched.

NBA 2K eLeague

Football has been a frontrunner when it comes to traditional sports adapting esports. Last month the NBA announced that it will also enter the esports industry, making it the first American professional sports league to do so. Launching in 2018, the NBA 2K eLeague will mirror the regular NBA league and consist of five-player teams run by NBA franchises competing for the title.

Contracting of esports players and the launch of esports leagues and competitions must eventually result in the growth of sports and leagues. It also gives traditional sports an opportunity to attract a younger generation that seems harder to reach through other channels.

Connect with a younger market segment

Deloitte reckons that 75 percent of the esports fans are millennials aged 18 to 34 and that 4 out of 5 are male. This shows how focussed the esports demographic is with their own desires and wishes. That esports an ideal channel is to connect with this group makes the industry even more interesting for sports organisations and investors.

One of the challenges for sports seems to be to attract this group of fans. That is why various football clubs are now using esports and their players to generate interesting content and activities to target this market segment. It is therefore more common to see esports (FIFA) around football matches, either at halftime or in the fan zones.

esports and sports

There are also people in sports that see applications of esports, just as virtual reality, to improve on-field performances. Sevilla coach Jorge Sampaoli used a PlayStation during practice when he was coaching the Chilean national football team. Before the Copa America 2015 Sampaoli wanted to give his players more insight into their on-field movement patterns. The intention of Sampaoli’s esports-system – a mix of football with technology and videogames – was for his players to encounter different strategies and movements from opponents.

It is certainly a creative way to apply esports to traditional sports. The question is of course to what extend a game could serve as effective practice.

GT Academy

Yet on-field football and football on a console are far removed from one another. The difference in racing is smaller. Especially if you consider that many gamers have a whole race setup, including race seat and wheel, at their disposal. This is exactly why the Nissan Playstation GT Academy was established in 2008. The GT Academy is a contest that gives gamers of the game Gran Turismo the chance to become real-world racing drivers. Whoever demonstrates the greatest potential is awarded with a place is Nissan’s Driver Development Programme.

Traditional sports have thus been operating on the intersection with esports for a longer period. In the past year there has also been more international attention for esports. It is fascinating to see how traditional sports keep integrating esports to fuel their own sport and to attract and retain a young market segment.

A Dutch version of this article first appeared on www.sportknowhowxl.nl