By James Fazio, of Sheppard Mullin
The esports ecosystem experienced transcendental growth in 2020 due at least in part to the Covid-19 pandemic, and is poised to act as a springboard for even further growth this year. With traditional sports largely sidelined last year, stadiums closed to fans, and people starving for personal interaction, gamers and spectators alike have turned to esports in record numbers. According to Newzoo, a prominent esports analytics company, 22% of the internet population participates in esports, and global gaming revenue is expected to hit $159 billion by the end of 2020. Streamers and streaming platforms have exploded in popularity, allowing streamers to earn income from broadcasting their live gameplay, interact with fans and engage with other players.
Building on the tremendous growth in 2020, here are some trends that some prominent members of the esports community are forecasting for 2021.
Significant Shift in Brand Advertising.
Enthusiast Gaming, a North American gaming platform went entirely virtual in 2020 and sponsored a four-day free EGLX tournament in November, 2020 that was watched by over 12 million people around the world. SpiderTech, and G Fuel were among the key sponsors of the event, which featured musical performances by Zhu and Goldlink and virtual appearances by athletes Richard Sherman and Darius Slay. With the enormous success of events such as EGLX, and esports audiences continuing to skyrocket, Enthusiast Gaming forecasts that mainstream brands will significantly increase their advertising spend to sponsor esports tournaments and events as a necessary means to engage with that tough-to-reach Gen-Z audience.
Convergence of esports with Mainstream sports.
Other industry experts have predicted that the world will see also greater convergence between traditional sports and esports, with professional football teams launching their own esports teams. For example, in December 2020, the Philadelphia Eagles named Esports Entertainment Group (“EEG”) as their official esports tournament provider. As part of a multi-year deal, EEG will operate bi-annual Madden esports tournaments for the Eagles. EEG will collaborate with Eagles players to create videos to promote the tournaments and will feature Eagles players in increased digital marketing efforts. First-movers such as the Philadelphia Eagles are likely to spawn increasing connectiveness between esports and traditional sports teams.
Growth of Esports in Popular Culture.
On April 24, 2020, more than 12 million people attended rapper Travis Scott’s virtual concert in Fortnite. Last year, FaZe Clan, one of the world’s most popular and successful professional gaming teams, entered the film industry and formed FaZe Studios, which plans to create feature films and a scripted television series. In June, 2020, FaZe Clan also announced its co-ownership of CTRL, a food supplement company. Earlier this year, the NBA sponsored the first-ever players-only esports tournament in which sixteen NBA stars competed in an NBA2K20 tournament on Xbox, won by Devin Booker, who earned $100,000 to donate to the charity of his choice. Based on the success of events such as these, 2021 is likely going to experience a surge in the integration of esports with popular culture, as the music, apparel and film industries seek to integrate themselves into gaming communities through in-game interactions.
Increased Fragmentation and Evolution.
Other industry experts such as Spiketrap have observed that more and more people are streaming a greater variety and volume of content than ever before. For example, according to one source, 42% of the U.S. population has live-streamed online content (compared with just 25% in 2017), and live-streaming is expected to be a $70.5 billion industry by 2021. Spiketrap predicts greater fragmentation in the esports industry created by the explosive growth in the source, variety and content of live-streaming. Musicians, athletes and other content creators will need to find a way to integrate and leverage live-streamed content with their own to better connect and expand their relationships with fans and spectators.
Increased Participation in the Ecosystem.
Still other industry experts have observed an unprecedented increase in player participation within the esports ecosystem. Esports One, for example, has witnessed a rampant rise in virtual currency, rankings, badges, skins and image banners, as player-members seek to “flex” their muscles and show off their skill to their friends and fellow competitors. As esports mature, and more games are supported by more titles, Esports One predicts that there will be more opportunities for sponsorships, integration, and tournament prizes.
In short, as tumultuous and dynamic as 2020 was socially, politically and epistemologically, 2021 promises to be an unprecedented year in the esports world.
James Fazio is special counsel in the Intellectual Property Practice Group in the firm’s San Diego (Del Mar) office.