Esports Are Booming; Are They a Threat to Traditional Sports?

Esports are a relatively new phenomenon, turning a hobby into a billion-dollar industry. While around 280 million people watched competitive video game events in 2016, this figure is expected to double to more than half a billion people around the world by 2021.

In 2019, the League of Legends World Championship had the most viewers, racking up 137 million of watch hours, from nearly 4 million simultaneous viewers at its peak. This was not a one-off, the Dota 2 International Championship had 88 million watch hours and the Fornite World Cup Finals had 2.3 million simultaneous viewers.

These figures also don’t include viewers from China, which many believe would see the number rise much higher.

With so many people watching, esports are beginning to look like they could rival traditional. For example, a typical Premier League game in England will have less than two million viewers, half of the peak figures for the League of Legends World Championship.

So are esports a threat to traditional sports?

What Are Esports?

For those that don’t know, esports are tournaments and leagues where professionals compete using video games. These are usually the same titles that can be bought by consumers and are played on either gaming PCs, smartphones or consoles. Examples include Call of Duty, Texas Hold’em, FIFA, and PlayerUnknown’s Battlegrounds.

Some events take place online, while others are held in arenas and stadiums. Fans can then either watch online through services like Twitch, on TV, or in person. For all but the smallest events, there is a commentary and presenting team just like ESPN uses for traditional sports.

How Do Esports and Traditional Sports Compare?

Esports are a fairly recent concept. The oldest leagues still in existence today started out in the 2000s, although many are much younger. In comparison, many traditional sports in Europe and North America have histories than span several centuries. For example, the English Football Association was founded in 1863, although some clubs are even older than this.

Even newer sports like American football have over 100 years of history, with the NFL celebrating its centenary in 2020.

With such a head start, traditional sports have been able to develop into multi-billion-dollar businesses. For example, the Dallas Cowboys NFL team had the same level of revenue as the entire esports industry. Combined, all of the teams in the league generate around $15 billion each year.

The English Premier League also makes much more, with over £5 billion ($6.3 billion) generated through broadcast rights, sponsorships, and matchday sales in the 2019/20 season.

Therefore, while esports revenues are looking strong with the reported $1 billion figure, it pales in comparison to the combined revenues of all traditional sports.

Viewing figures also look great until you compare them. The most viewers for a single game in 2019 was 4 million, while the NFL enjoyed average viewing figures of 16.5 million. For its championship game, the Super Bowl, it manages more than 100 million people during peak viewing.

Not a Zero-Sum Game

So we’ve established that esports are not currently getting close to challenging traditional sports, but will they pose a threat in the future?

That will depend because it doesn’t need to be a zero-sum game. It is possible for esports and traditional sports to coexist, either as completely independent entities or by complementing each other.

Poker is a unique case that demonstrates this already. Organizers have been holding esports events in the form of online poker tournaments for years. Some of these tournaments are used as qualifying rounds for real-world events where players come together at a casino or other large venue to play games like Omaha hi lo until only one player is left.

In the case of poker, the real-world and esports versions do not compete against each other, but rather complement each other. The live poker tournaments and events help to promote online poker platforms to new and existing players, while online poker sites are usually where players practice before turning professional.

We have seen this occur in motorsports too. For several years, the GT Academy provided successful players of the PlayStation game Gran Turismo a route to getting a race seat in real-world racing.

Similarly, professional race drivers from many formulas and championships have taken to racing simulators like iRacing, Formula 1 2019 and Forza to compete online. Formula 1 has even set up its own esports series that involves all the real-world Formula 1 teams and uses the official F1 2019 video game.

Major League Baseball also announced plans to launch an esports league in China in the hopes to create more interest in the sport there, although, in lieu of any new statements, these plans appear to be on hold.

Not Direct Competitors

Although there are some video games that depict real-life sports, the most successful esports involve fictional games that can’t be directly compared to reality. For example, Hearthstone is a collectible card game that has no real-world equivalent, the same applies to shooting games like Call of Duty and fantasy battle games like Dota 2.

Fans of traditional sports are unlikely to prefer a video game depiction over the real thing since they involve very different skills and only the original is a physical challenge.

Therefore, it seems unlikely that esports will pose any real threat to traditional sports. The demographics for the two don’t really overlap, and where they do, there is room for people to be fans of both traditional and esports.

There are also opportunities for the two to help each other grow, as has been seen with poker and a lesser extent Formula 1.