What Does the Future Hold for eSports? (Guest Blog)
Online gaming as a spectator sport is a risky business, but it’s going to be a slam dunk
Dan SchechterGuest Writer | October 5, 2016 @ 8:30 AM
Last time, we discussed how traditional linear-TV companies are participating in eSports to capture the elusive millennial demographic.
There is no doubt that significant opportunities exist for traditional media companies in eSports, but there is also great uncertainty.
First of all, what does the future of eSports look like? We see two potential trajectories:
The upside case is continued double-digit growth. Two key factors would drive this scenario: (1) the rapid entry of blue-chip brands (and their advertising/sponsorship dollars); and (2) successful carriage of eSports content on TV.
The base case assumes more tempered, single-digit growth. This scenario will happen if viewing stays mainly off TV and advertisers don’t get the massive reach they need. In this scenario, eSport expansion will track with the demographic expansion of digital natives, with advertisers/sponsors continuing their methodical entry into the space.
In both worlds, eSports will ultimately be worth billions of dollars. The unknown is how long it will take to get there.
For now, even for top publishers such as Riot Games — when analyzed without revenues from micro-transactions and in-game purchases — eSports itself is still a loss leader, though it feeds the overall experience for players, driving interest in the game. This is likely to continue as eSports gets over its growing pains, which are primarily driving the following challenges.
1. The perception that eSports is a “fad”: Our view is that this perception is false; that demand is strong, and it’s growing. Clearly, eSports has been building a significant core audience since the early 2000s. Additionally, eSports is already large and proven in Asia. Demand will be there, and the only question is when TV distribution will succeed.
2. Games have short windows of relevance: How long can a game remain relevant, especially given the fleeting nature of millennial tastes? The jury is still out on which games have staying power (see figure below). Games like “Counter-Strike,” launched more than 15 years ago, certainly fall into that category. But it might be difficult for a large number of games to achieve more than a short run of popularity. For an analogy, consider that there are just five major traditional sports leagues in the U.S. (NFL, MLB, NBA, NHL and MLS). Arguably, there may only be room for five major eSports games in the U.S. market, and the top eSports of today may not be the ones with staying power. Still, those core games can anchor a robust industry. Another point to keep in mind is that internationally there may be space for more than five eSports games/leagues, pointing to another potential area of growth.
3. Affinity suffers from lack of a local following for teams: Continuing with the traditional sports comparison, one open question is whether eSports will suffer because fans are not able to root for a local team. Can teams maintain long-term prominence? The jury is still out on this one, although there is early evidence that some multi-eSport teams (e.g. Fnatic, Evil Geniuses) have maintained a high level of popularity over time, enabling them to invest in their brand.
4. Player turnover is unsustainable: Finally, the skill set required to compete professionally in eSports means that player turnover is currently too high to be sustainable. This may hurt audience loyalty, because a favorite player may age out too quickly (although some retired competitors have found roles as game-casters or analysts).
In our next post, we’ll take a look at the key questions that traditional media companies need to ask themselves as they think about participating in eSports.
The 30 Best Video Games of All Time, Ranked (Photos)
What makes a video game "the best"? Technical prowess? A moving plot? A huge amount of features? It's a difficult concept to nail down for an entertainment medium as young and as all over the place as gaming. But we tried our best -- even so, you will definitely not agree with us.
30. "Roller Coaster Tycoon 3" (2004) It wasn't the first game to let you design a roller coaster and then ride it, but it was definitely the best and most robust example. You could build whatever you wanted, and it was one of the few games to make that claim and actually deliver something legitimately compelling.
29. "The Chronicles of Riddick: Escape From Butcher Bay" (2004) It's the story of how Riddick (played by Vin Diesel even in the video games) got those cool glowing eyes, and it's also a thrilling sneakfest that makes the "Metal Gear Solid" franchise seem super quaint.
28. "Uncharted 2: Among Thieves" (2009) The closest an action game ever came to really emulating the experience of watching a (very long) movie. While its sequels were major regressions from that peak, "Uncharted 2" remains representative of an ideal that, quite possibly, no game will ever fully realize.
27. "Zork" (1977) This is a game experienced entirely through text -- thus the label "interactive fiction" being thrown around a lot -- a type of thing that was pretty common as personal computing started to become a thing back in the '70s and '80s in the early days of gaming. But "Zork" was operating on a whole other level from its peers, allowing a complexity in player interaction and a depth to its storytelling that was unheard.
26. "SimCity 2000" (1993) The best way to describe "SimCity 2000" is as a sand castle simulator. You spend hours painstakingly constructing your masterpiece, and then when you're done you tear it down in a cathartic fit -- thanks to its surprisingly robust disaster scenarios, which you can trigger on demand. The series never bested this one.
25. "Command & Conquer: Red Alert 2" (2000) Strategy video games rarely manage to be all that accessible, but "Red Alert 2" was both funny and easy to get into -- moreso than any of the other "Command & Conquer" games before or after. And so it remains a delightful gem worth revisiting every once in a while.
24. "Full Throttle" (1995) An example of what in the '90s was referred to as an "adventure game," "Full Throttle" today feels like the direct predecessor to the part of the current wave of independent games with well told stories that has adopted a similar visual style -- "Kentucky Route Zero," "Kathy Rain," and the like. But it remains just as good as (almost) all of the games it inspired.
23. "Super Mario RPG" (1996) One of the rare examples of a Japanese RPG that was truly accessible to the masses, and it remains one of the best examples of that genre because of that.
22. "Prison Architect" (2015) On the surface it's just another simulation-style game in which you have to design and manage some kind of real world thing. But by tackling the specific topic it does, "Prison Architect" delves into issues in a way few games do. And the depths of depravity it allows the player to delve into can teach you a lot.
21. "FTL" (2012) A journey through space, fraught with bad luck at every turn. You'll probably never win it, and that's part of the fun. That's also why it's a work of art -- "FTL" is really about your life.
20. "Alpha Protocol" (2010) Though it's functionally awkward in a lot of ways, "Alpha Protocol" is a delight if you can look past those physical flaws and embrace its glorious personality. One of the greatest examples of a flawed but compellingly ambitious video game.
19. "Far Cry 2" (2008) Publisher Ubisoft has spent the past decade putting out open world video games that it insists have no political agenda -- except for "Far Cry 2," the game that seems to apply a big ole "Heart of Darkness" metaphor to the very open world genre it inhabits.
18. "World in Conflict" (2007) Set during a Soviet invasion of the U.S. during an alternate version of the late '80s, this forgotten gem was an attempt to build a cinematic experience around a strategy game -- which probably seems counterintuitive but it actually works pretty well. It remains the only game to ever do something like that, so bonus points for ambition.
17. "Max Payne 2: The Fall of Max Payne" (2003) Full of love, irony and tragedy, "Max Payne 2" is still unlike any other video game in the way it manages to so effectively wallow in the misery of its lead with a masculine detachment that never quite crosses over into macho territory. You just get Max in a way that's very unusual for a game.
16. "Deus Ex: Invisible War" (2003) Though popularly maligned, "Invisible War" actually represents the delightful paranoia of "Deus Ex" better than any other entry in the series. It doesn't take itself too seriously, even while it tells a story in which everyone -- and I mean everyone -- is out to get you for some reason or another.
15. "Counter-Strike" (1999) There can only be one king of the online multiplayer shooters, and "Counter-Strike" (along with its various updates and remakes, like the recent "Counter-Strike: Global Offensive") remains the one thanks to its still-unusual match rules: once you die, you're done for the entire round. It's thrilling in a way that other online shooter simply aren't.
14. "Splinter Cell: Double Agent" (2006) The tale of "Splinter Cell" is one of unfulfilled potential, usually, but "Double Agent" was the high point. A brilliantly twisty spy story in which nobody knows who the good guys are, and even your own alignment is in question as you change sides over and over.
13. "The Dig" (1995) As much as a game like this could ever be considered an event, "The Dig" certainly qualified thanks to the involvement of Steven Spielberg and Orson Scott Card, as well as a novelization by Alan Dean Foster. It was extremely heady, which lessened its appeal somewhat, but that also made it the best example of the point-and-click "adventure" genre of the '90s.
12. "Danganronpa: Trigger Happy Haovc" (2010) This Japanese visual novel/adventure game about a group of teenagers being locked in a school and forced to murder each other (without getting caught!) is surprisingly enthralling despite its insistence on never staying grounded at any point. "Danganronpa" is both silly and sweet, and among the most human video games I've ever played.
11. "Portal 2" (2011) Comedy in video games is rarely any good, but the comedy in "Portal 2" is spectacular. That's it's one of the greatest puzzle games ever is just a bonus.
10. "Red Dead Redemption" (2010) You'd think the Western genre would be a natural fit for video games, but it's rare that anyone makes the attempt. It could be that "Red Dead Redemption" worked so well that other developers are afraid of trying. If we're going to be stuck with one big Western game, though, might as well be this one.
9. "Burnout Paradise" (2008) The only driving game that ever mattered, a non-stop adrenaline rush through an open city designed to let you fly -- both in the "driving real fast and never slowing down" sense and the "making sick jumps off conveniently positioned ramps" sense. It's perfect.
8. "Star Wars: TIE Fighter" (1994) Subtlety tends to be something video games are very bad at, but somehow the game about flying a starfighter in service of the fascist Empire pulls it off. It turns out it is possible to humanize those faceless grunts.
7. "Half-Life 2" (2004) and its sequel episodes It's a chaotic experience, spanning a pile of different genres seemingly at random -- but it works. Even more than a decade later everything about it just feels right. More right than the many more recent games that have tried and failed to recapture its magic.
6. "Grand Theft Auto: San Andreas" (2003) Many games promise a virtual open world in which you can go anywhere and do anything, but "San Andreas" might be the only one that actually delivers on that promise.
5. "Mass Effect 3" (2012) It rightly catches a ton of flack for its awful ending, but the core of the experience -- beautifully curated action vignettes that are roughly the length of an episode of a TV drama sans commercials -- is nearly perfect. Developer Bioware may have stumbled upon the ideal way to tell a story in a game like this.
4. "Star Wars: Knights of the Old Republic 2: The Sith Lords" (2005) The best "Star Wars" stories are the ones that subvert our perceptions of what define the franchise, and "KOTOR 2" is one of the definitive examples on that, taking a close look at what happens after the war is won.
3. "Call of Duty: Black Ops 2" (2013) One of the few games that tells a story that changes based on the player's actions -- while being confident enough in its vision to not tell the players it's happening. It matters just as much, of course, that "Black Ops 2" is as great in execution as it is in concept.
2. "The Witcher 3" (2015) The whole is less than the sum of its parts, but those parts -- huge open world, an expansive story that has time to breathe, robust combat -- are so good that it's almost forgivable that they don't all gel. For now, "The Witcher 3" is about as good as it gets for an action adventure video game.
1. "Gods Will Be Watching" (2014) A video game with a well told story which the player isn't really in control of his own ability to make it through. For example, completing the story requires you to survive a game of Russian roulette. This is a profound subversion of the standard video game power fantasy.
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”Call of Duty,“ ”Grand Theft Auto“ and more in honor of #NationalVideoGamesDay
What makes a video game "the best"? Technical prowess? A moving plot? A huge amount of features? It's a difficult concept to nail down for an entertainment medium as young and as all over the place as gaming. But we tried our best -- even so, you will definitely not agree with us.
Dan Schechter is a Managing Director and Partner at L.E.K. Consulting, and he leads the firm's Global Media, Entertainment & Technology practice. He has broad experience within the media, entertainment and technology sector, including TV, film, Internet content and commerce, radio, magazines, theme parks, advertising and news. He also has experience working with retail, consumer products, travel and industrial clients. Dan was awarded his MBA from Stanford University and his BA, cum laude, from Harvard University.