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Malta Business Review ENTERTAINMENT Why gaming might become the biggest thing in the history of entertainment By Toan Nguyen Sergei Fadeichev / Getty Images) When people think about entertainment they often think about shows. Shows on TV or shows on stage. A quick search on Google Images using the term ‘entertainment’ will suggest that entertainment is either a theatrical movie or a music concert. Let’ start with a personal confession. I am a millennial and yes: I don’t watch TV; I watch YouTube channels. I don’t know soap-opera actors, but I know Instagram influencers. I operate mainly based on different social media filters, hacks and algorithms. But the most disturbing thing you will probably read today is that I enjoy watching other people play video games online. Yes, I really do. I might even be sitting on my couch while you read this, watching other people play ‘League of Legends’, ‘Dota 2’ or ‘Counter-Strike’ on my big TV screen at home, which I initially bought for Netflix and Amazon Video. And there is also a good chance that I’m not by myself. Some friends of mine could well be there, too, passing round some snacks, because it’s obviously more fun to watch games and matches together. This might sound superweird to you, but think about it. How many people watch other people play traditional sports? How many people watch other people cook? How many people watch other people get naked and do stuff? Those are all phenomena that have been around for some time, right? So obviously there is something about watching others do stuff that seems to trigger people. And this holds true for gaming, as well, and — hell, yeah, we are talking about millions upon millions of people watching people play video games to win millions upon millions of dollars. Actually, you can win $20 million for winning a single tournament. I’m a strategist who works in sports marketing and for the last four years I have been working with sports entities such as the German national soccer team, the German Olympic team, several Bundesliga clubs, a few select athletes and, of course, sports brands like Adidas, Reebok and sports sponsors like Mercedes-Benz. It’s mostly been fun, simply because it’s more fun to market a soccer team than Bavarian cheese, the next flavour of deodorant or a banking account (all been there, all done that). My older colleagues have always stated that working with cars is the supreme discipline in advertising. Well, maybe that used to be true But right now I am looking at 29 million hashtags for BMW, 12 million hashtags for Audi, 39 million hashtags for Adidas and 69 million hashtags for Nike on Instagram. Without doubt traditional sports such as tennis, soccer and American football have been significant drivers of great marketing initiatives. I truly believe that sport as a platform is and will always be king when it comes to its potential to reach consumers. It is by nature a killer application, something with inherent strength and uniqueness through one particular factor: all its ingredients are engaging by default. No other platform can produce content on such a regular basis as sport; no other platform is as naturally tied to anticipated occasions like match days, cups or finals. Sport embodies the idea of community-building and loyalty in its fans. Sport is also emotional. It’s all about drama – winners and losers. Ultimately sport is about powerful things: humans and personalities. It’s without any doubt a powerful platform! But what would you think if I told you that there was something bigger than sports? When we talk about entertainment we ultimately have to talk about gaming. Yes, gaming. In fact, gaming might become the biggest thing in the history of entertainment. And I’m talking real money here: $108.8 billion in revenue in 2017. The market has been growing at an average rate of 5%, which represents roughly $5 billion a year. And things are getting more aggressive. The game ‘Call of Duty’ had a marketing budget of $200 million; the ‘Call of Duty Black Ops II’ instalment, in return, generated $1 billion in sales within fifteen days of release. This game is moving more money than many Hollywood blockbusters — and it’s not alone. Titles such as ‘GTA, ‘Final Fantasy’ or ‘Pokemon’ series are all moneyprinting machines. Let’s go back to the beginning and the strange idea that certain people would watch other people playing video games. Why? Because it’s reality, and reality hits hard! We have seen kids watching make-up tutorials on YouTube. We have seen a range of digital-born stars on Instagram who may, sooner or later, change the entire fashion industry. And we’re now facing a time when it’s sport and entertainment that will be truly redefined. What if I told you that there is something like competitive gaming out there. There are professional teams, professional leagues and professional players who are playing video games for a living. This happens in stadiums around the world, most of them sold out, while companies such as Twitch (Amazon), Facebook and YouTube stream the games live with regular six-digit to seven-digit concurrent views. How would you feel about this fact: the world championship in ‘Dota 2’ has a prize pool of more than $20 million! For just one single event. All of this is driven by a strong and growing fan community. Fnatic, a London-based eSports clan, has more than 1.12 million followers on Twitter alone! Faker, a South Korean ‘League of Legends’ player and something of a Lionel Messi of eSports, counts more than a million fans across different channels such as Facebook, Twitter and – most importantly — Twitch. Let me dive deeper into the subject, because there is a lot to tell. And, yes, there are a lot of prejudices when thinking about eSports, so let me address the three most common ones first. "No other platform can produce content on such a regular basis as sport 34
ENTERTAINMENT Malta Business Review #1 That thing about the nerds The first picture that might come to your mind is probably a teenage boy who’s sitting in his parents’ basement. You would probably call that kid a ‘geek’ or a ‘nerd’ and most likely think he’s not someone who’s going to date the prom queen. And you could be right. Sure, the average eSports fan probably doesn’t live in the New York’s East Village, nor do they drink fancy matcha lattes after attending Vinyasa yoga class. They also don’t usually live in artsy lofts with a fixie bike in the hallway or a surfboard on the wall. In fact, it’s more likely they’re sitting in an engineering or computer science lecture, learning about macroeconomics or tutoring math. What makes me say that? It’s simple. The people who keep up with eSports very likely possess not only above-average English skills but also significant cognitive skills. If you don’t believe me, come and visit an ESL (Electronic Sports League) event and have a look for yourself. The complexity that hits you when commentators analyse strategies, plays and scenarios in double-time English is a pretty good demonstration of the brain capacity of eSports fans who live all over the world. ‘Dota 2’, for example, one of the most popular games right now, is an amalgam of game theory, as in the movie A Beautiful Mind with Russell Crowe; and American-football moves coupled with the high speed of basketball. And all that wrapped in bangs, thuds and lots of blinking lights. So, let’s put it like this: eSports fans and players may not be your typical mood-board target group that live in urban lofts, but they aren’t the blaring, fireworks-lobbing beer lunatics that can be found in other types of sports. It’s most likely that a lot of them will become tomorrow’s programmers, aircraft specialists and mobility engineers. Yes, they are the ones who’ll go on to have the money. #2 That thing about the violence I hear this a lot: eSports and gaming is about bang-bang and violence and forms the perfect boot camp for future serial killers. When most people think about serious eSports they think about ‘Counter-Strike’, and, again, they are right. ‘Counter-Strike’ is huge. The current player base stands at a cool 10 million. Per month, obviously! Sometimes, there are up to 850,000 gamers playing on the servers at the same time. During ESL One Cologne (like a world championship), there were 15 million unique viewers watching the streamed matches online — read that number one more time — and 47.9 million hours of ‘Counter-Strike’ were watched on Twitch in January 2017 alone. Statistically they cannot all be maniacs and serial killers. ‘Counter-Strike’ is among the four most popular eSports titles. That’s why prize pools "eSports is the sport and entertainment phenomenon of the new generation can easily reach into the millions of dollars — on top of an average player base salary of about between $65,000 and $100,000. Think about it. You don’t make these amounts of money through senseless aggression but rather technical versatility, reflexes and, most importantly, a high degree of tactical thinking, both individually and as a team. So it’s hardly surprising that the whole do- FPS-games-make-you-violent (that is, firstperson-shooter) discussion is limited to a few countries. Countries like Germany, where I live, for instance. In other countries huge brands such as Visa, Pepsi, Coca-Cola, Audi and Domino’s Pizza have been sponsoring ‘CounterStrike’ teams and events for quite a while now, and NBA players and top DJs such as Steve Aoki are even buying their own teams. In comparison, the fact that some countries are still stuck thinking ‘Counter- Strike’ is for unstable personalities with low impulse control and high levels of aggression is somewhat embarrassing, to be honest. #3 That thing about ‘not being a sport’ Some people may argue that eSports is not a normal sport. And they are correct; nothing is really normal in eSports. A global community that is digitally connected, exceptionally clever, gets its entertainment via streams, willingly pays for ‘in-game items’ (for example, little outfits for your character) and regularly breaks viewership records is anything but a normal sport. Because the fact remains that normal sports — apart from soccer and very few others — are having huge difficulties in many areas. Entire sports are taking place practically without any viewers, and organized sports entities are desperately looking for members. Meanwhile, the eSports kids just have to open up their browser or game client. Long story short: the entry barriers are a lot lower than they are in other sports. And what about the sweating? Shouldn’t sports be sweaty? Another one of those topics. . . Once you have seen how many actions the pros perform every single minute, how precisely they are handling their mouse and keyboard, you can hardly maintain that there isn’t a physical component to it. Then there’s the mental component as well — and let’s not forget that chess is a sport, too. The thing is: eSports can help itself to elements of traditional sports, picking up what works best. It can. But it doesn’t have to. And that’s what makes it so exciting. After all, in some ways eSports is still in its early stages and therefore still keen for co-shaping! Entertainment is what entertains Again, this is reality: we have heard peculiar stories about ‘World of Warcraft’ and struggling families in South Korea. We have seen the long lines of people buying games and going crazy about new consoles. And there is an entire genre on YouTube called ‘Let’s Play Videos’. What is happening now is not only an evolution of gaming it’s a powerful transition that will bridge different parts of different entertainment industries. It will bridge sports with gaming, with streaming, with talent, with live, with online, with on-theground and with a global community. eSports is the sport and entertainment phenomenon of the new generation: it’s a digital-born sport with digital-born stars. And there is a much stronger feeling of ownership by the fans. They have helped build the eSports scene from the ground up themselves and thus feel strongly about it as ‘their’ scene. This means they are much more interested in what happens in the scene beyond individual teams or athletes than regular sports fans tend to be. While we all know those brands and industries that are desperately striving for digital transformation, eSports has managed to build its very own ecosystem. It’s all digital by nature — the games, the training sessions, the interaction with fans, the activation, the reach and the views. It is also a rather untapped space for many brands and potential sponsors that still offers the potential for genuine co-creation instead of plain, unimaginative logo placements. We may still lack a definition of entertainment, but we know that it needs to entertain. <strong>MBR</strong> Creditline: Toan Nguyen www.maltabusinessreview.net 35
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