Sports Video Group
eSports has evolved beyond the realm of niche entertainment
and cemented itself into the mainstream. What took it so long?
“Digital gameplay is already more popular as entertainment
than music or print and it will soon overtake film,” claimed Arnd Benninghoff,
CEO of eSports and gaming group MTGx in a keynote to IBC’s eSports conference
theme. “That’s why we believe gaming is the next big entertainment and why we
want to be an active player.”
In 2015, the Stockholm-based multi-territory commercial and
pay-TV broadcaster acquired a 74%
Video games presenter Julia Hardy and Arnd Benninghoff, CEO
MTGx at IBC 2018 in Amsterdam
share in eSports league and event organiser ESL/Turtle
Entertainment and full ownership of live event gaming festival DreamHack.
In its last quarter to July, eSports accounted for $46.3
million of MTG’s digital revenues, a 41% increase over Q1 2018 and representing
over 41% of total digital revenues. This was driven by more than 60% growth
year-over-year in revenue from ESL and DreamHack.
“eSports has fuelled our digital transformation,” said
Benninghoff. “ESL is the Champions League of eSports brands. DreamHack is like
Coachella without the drink or drugs.”
He likened multiplayer online battle arena game DOTA
(Defense of the Ancients) to “playing chess on acid. I can’t pretend
I understood it when my nephew first took me to a DOTA event but you only need
15 minutes to understand the rules and the super-excitement of the fans was
extraordinary.”
The Group recently split into two separate
companies, with MTG focusing on digital video content, online gaming, and
eSports while Nordic Entertainment Group takes control of its regional TV
business.
“ESL is more and more about owned and operated events and so
we continue to restructure, streamline and focus our resources on events where
we can scale our media and sponsorship deals in order to maintain our market
leadership and build an eSports megabrand.”
It also launched a $30m (€25.3m) investment fund to target
US and European online gaming companies. Benninghoff said MTG intends on
investing in five to 10 companies annually over the next three years.
He described a virtuous circle in which amateur eSports
players were vital to growing the whole ecosystem. “If you invest in grassroots
then you can identify new games which may become popular ahead of the curve and
you can identify new esports stars. Meanwhile, amateurs get the chance to
upload their own game play and potentially gain followers and eventually to
participate in an eSports pro team.
“Original titles are key for generating high revenue and
story-driven narratives become pop culture hits.”
However, he did have these warnings for other media
companies seeking to tap the phenomenon. “eSports is probably over hyped and
you don’t make healthy decisions in a hyped market. It is also still in an
experimental stage and you can underestimate how long it may take to attract
eyeballs. If you mess with the community and they sense you are unauthentic or
you lack street credibility, they will leave,” he added.
“One difference to traditional sport like football is that
each game, like DOTA 2 or League of Legends, are so different from each other
they attract totally different communities.”
Benninghoff feels it important that eSports content remains
free and distributed on as many platforms as possible. “I don’t believe we are
ready for a SVOD business model yet,” he said. “We need a long tail of sponsors
and to get those we have to attract lighthouse investments from major brands.”
A key one for MTG was convincing Mercedes-Benz to invest
heavily last year in a long-term ESL event sponsorship deal. “We were able to
do this because eSports enthusiasts are 18-30 year olds,” said Benninghoff.
“Twenty years ago, gamers were considered nerds. Now they
are the rock stars.”
Sky and ITV are among investors in GINX eSports TV which was
described by Michiel Bakker, founder and CEO, as serving to bridge the worlds
of online streaming and mainstream TV by being a linear channel dedicated to
eSports. It is on track to reach 75m by spring 2019.
“It is shocking how big eSports had to become before it
popped up on the mainstream radar,” he said. “eSports has been around for 15
years and it was enormous seven years ago. It’s astonishing it took so long to
get noticed but there was a preconceived notion that this was a pursuit of
geeks and therefore not relevant to the mainstream. That has completely
changed.”
Christopher Mead, senior director of partnerships for EMEA
at streaming platform Twitch echoed this by saying the user-generated component
of the sport went undervalued. “eSports’ success is in large part because of
the ability for players to broadcast gameplay on vehicles like Twitch from
their bedroom to one or one hundred or many hundreds of thousands of viewers
concurrently. They are the content creators and have a vital role to play.”
Tanya Laird, technology ambassador for ESL UK, explained
there were three distinct audiences for live eSports tournaments.
“There is the vast base at home watching live on platforms
like Twitch; there are those at the event itself; and the performing pro player
themselves on stage who we consider to also be an audience. The interaction
between these groups by realtime function like chat is what drives the whole
passion for the content.”
Market revenue for eSports is forecast to reach U$1.65 bn by
2020, according to Statista, and eSports has a recently confirmed place at the
2022 Asian Games in Hangzhou, China edging one step closer to full Olympic
recognition. With growing advertising revenues, a global online audience of
over 300 million, and construction of dedicated stadiums, pro players are
competing for multi-million-dollar prize money.
Moreover, as the availability of high bandwidth streaming
media platforms increases, eSports is reaching wider global audiences and
attracting investment of entertainment companies, broadcasters and brands.
“The market growth of eSports has been nothing short of
incredible, and it hasn’t even reached its full potential,” added Mark Hilton,
VP live production for Grass Valley. “eSports is just starting to come into its
own in terms of professionally produced content.”
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