eSports – Making a killing for investors

The 2022 FIFA World Cup Final saw Germany defeat Argentina 5-4 in a penalty shoot-out following a goalless draw in normal time. The trophy was presented by former Spanish international David Villa. The German team was captained by Umut Gultekin, who also received the prize money of $200,000. He did not need to share it with his team-mates, for Gultekin was Germany’s only player. 

He had won the FIFA eWorld Cup final played earlier this year in Copenhagen, not Qatar. The match was shown live in over 100 countries, including the USA (Fox Sports 1). It was also streamed live on YouTube and Twitch.

Esports has proved a spectacularly profitable investment for those pioneers who were first to identify the potential impact on computer games of super-fast Local Area Networks

The FIFA eWorld Cup (FeWC) computer game is uncannily realistic and demands high skill levels and tactical awareness. It is rapidly gaining a loyal and enthusiastic following. Still, it has a long way to go before it can rival the games that are currently enjoying global domination of the world of eSports. That may be because, for all their crunching tackles, the players in FeWC are shooting at goal – rather than at the opposition. Shooting every opponent is the prime objective of the world’s biggest eSports, “Fortnite” and “Call of Duty”.

In “Fortnite”, up to 100 individual players find themselves deposited weaponless on a remote island. They must hunt for weapons, food and transport to stay alive. It is kill or be killed until only one player remains alive. Additional complications involve toxic storms and floods that reduce the size of the island – plus some decidedly unfriendly local Zombies.

In “Call of Duty”, one team of four (Terrorists) plants a bomb in an urban location and tries to prevent the other team (Law & Order) from finding and defusing it. Each heavily-armed team works together to ambush and kill the opposing team members. The game ends when one team is wiped out, or the bomb explodes – or both.

The global appeal of “Call of Duty” is illustrated by the number of people who logged on to watch the opening of the 2021 professional league season – 1.3 million. Many were probably looking for ways to improve their own game skills, for anyone can enter the global amateur challenge, which has a prize pool of $1 million. As of April 2022, the various iterations of “Call of Duty” had sold over 500 million copies, making it, according to the Guinness Book of World Records, the best-selling video game of all time.  

eSports tournaments and conventions are held around the globe at regular intervals. They attract tens of thousands of (mainly young) enthusiasts. The DreamHack events held twice yearly in Jönköping, Sweden, are BYOC (Bring Your Own Computer).

They run non-stop for 48 hours, showcasing new games, technology and equipment and encouraging the fans to dress competitively as their favourite gaming characters (known as COSPLAY, complete with alarmingly realistic replica weapons). In Rio de Janeiro, Brazil, in 2019, eSports events provided a legacy use for the deserted and increasingly derelict 2016 Olympic Park site.

Other regular mega-events are held in Dallas, USA and Katowice, Poland. The Polish event is famous for its lengthy queues. Entry is free, but involves a patient wait in sub-zero temperatures while COSPLAY characters’ weapons are checked to ensure they are indeed only replicas. Once inside the venue, the enthusiastic young fans get the chance to try out new games and to see the world’s top professional teams in person competing on stage in the mammoth arenas.

The crowds are vast; excitement reaches fever pitch; rock music and pyrotechnics ensure the noise levels are deafening. The action is shown on vast high-definition screens and each deadly shot is greeted with huge roars of approval or dismay. At the bigger events, rival fans sometimes have to be corralled to avoid enthusiasm spilling over from the auditorium onto the stage.

Professional eSports players are teenage global superstars, with their own brand names and official fan clubs, who are paid six-figure basic salaries plus prize money bonuses. Teams are mainly funded by high-tech companies.

There is a cut-throat transfer market to secure the best players, whose time at the top of their game is likely to be short – the intense pressure means that very few manage to keep going into their twenties. They then tend either to retire to enjoy their winnings and/or join the growing coterie of eSports pundits who provide real-time commentary and analysis for the online streaming channels. 

Esports has proved a spectacularly profitable investment for those pioneers who were first to identify the potential impact on computer games of super-fast Local Area Networks (LANs). Back in the 1990s, a small group of Swedish schoolfriends started developing games they could play remotely but collectively.

They called the event “DreamHack”. In 2015 the DreamHack Corporation was bought by Modern Times Group / Kinnevik of Sweden and was merged with the Electronic Sports League (ESL).

Success, though, may come at a cost to the individual player. Video games can be addictive. The World Health Organisation includes “Gaming Disorder” in the International Classification of Diseases. In 2017 a research study published in the American Journal of Health Psychology identified a correlation between depression and excessive video game time.

Particularly at risk are people with Attention Deficit Hyperactivity Disorder (ADHD) or with autism, whose tendency to repetitive behaviours can develop into an unhealthy obsession with particular games.

Excessive gaming is also linked to increasing levels of social isolation, as those who suffer from social anxiety can interact remotely with other people without having to meet them face-to-face in real life. Parents who notice that their children are suffering from insomnia, skipping meals, neglecting personal hygiene or choosing to stay home rather than socialising with friends may need to monitor the amount of time being spent playing video games.

Those parents who spend large sums of money buying games and equipment, or who deposit their teenagers for the whole weekend at DreamHack events may wish to consider whether they are at risk of encouraging an unhealthy obsession.

Nonetheless, the long-term outlook for eSports is for continued growth. While the Covid pandemic meant the suspension of physical tournaments and conventions, there was an explosion of home play, suggesting that those supposedly “homeschooling” or “working from home” were not necessarily focused full-time on their teachers’ or employers’ business.

Also, even though the life span of the professional eSports player is painfully short, the amateurs never grow too old (there is an international “Call of Duty” league for the over-60s). Nor is participation in eSports restricted to young males. Plenty of girls play and challenge the boys on equal terms. With every generation of young people who enter their mid-teens, the number of new players grows accordingly, while few stop playing completely. As a business model, a guaranteed ever-expanding market is an enviable prospect.

It may be that eSports are already the world’s fastest-growing leisure activity.  Logic would suggest as much. To compete internationally in sport at the elite level you no longer need to be a super-fit athlete.

You do need to put in the hours of practice, but nimble fingers and a quick eye and brain are all you need to achieve greatness. There is no age barrier; there is no discrimination in terms of race or gender; the disabled are enabled and empowered; all can compete on equal terms. The world of eSports is a world of discovery and wealth. It comes as a revelation to those previously unaware of this global phenomenon – and of its unlimited potential for growth, technological innovation…..and investment.