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The Bizarre World Of eSports

Despite legal issues, stigma and a relatively niche audience, the eSports industry is set to balloon in value

16Jun

The salaries of professional soccer players, particularly those in Europe, have been the subject of long-running debate. Six-figure salaries are common, bonuses are huge and the escalation seen since the maximum wage was abolished in 1961 has been a spectacular example of a financial arms race. The words ‘overpaid’ and ‘footballer’ are often coupled and the subject is met with tutting and a shake of the head when brought up amongst friends.

How, then, will people react when the salaries of professional gamers surpass theirs - they have, for most people, by the way. According to the Guardian, ‘star players [earn] salaries and prize pots of up to $12 million.’ Playing video games now technically counts as ‘training’, as competitive computer playing (eSports) takes gigantic strides toward being a mainstream pursuit. The notion of a sea of fans watching on - with even more, naturally, watching online - as players sit in front of computers might seem odd, but it’s gaining traction quickly. Like soccer players, pay is set to skyrocket and, like soccer, the industry is set to become incredibly lucrative.

One startup placing all its chips on eSports is Skillz. The San Francisco startup broadcasted 8.5 million minutes of professional gaming across the likes of YouTube and Twitch last year, and expects that figure to rise to 40 million this year, according to TechCrunch. The company ‘paid out 21% of last year’s eSports prizes worldwide and is on target to pay out 38% of eSports prize money won in 2016 tournaments.’ The company generated $20 million in entry fees in 2015, a figure set to more than double this year - eSports is already huge business.

Sky Sports, too, has jumped on the trend, and is set to broadcast what will be one of its stranger products: a 24-hour dedicated eSports channel. Both Sky and ITV are set to take a minority stake in the new Ginx eSports TV, as part of an attempt to ride the industry’s journey into the mainstream. There’s no doubt the move is supported by numbers; of the 20 most subscribed YouTube channels, five are dedicated to gaming, with the number one in the world being PewDiePie, a Swedish gamer with 45 million subscribers. If this enthusiasm could be translated into competitive gaming figures, the revenue potential could be huge.

And Skillz’ claims are bold. The startup’s website cites a USA Today piece that claims ‘more people watch eSports than watch the MLB World Series or NBA Finals’, and a Juniper Research report that claims ‘eSports will have bigger audiences than the NFL by 2020.’ Incidentally, the institute also claims that subscription revenues will reach $1 billion in the same year, and that the industry is ‘on pace to surpass $9 billion in revenue by 2017.’ Such comparisons and figures are difficult to believe but, with younger audiences, the scale is vast. ITV’s managing director of online, pay and interactive, Simon Pitts, said: ‘eSports is experiencing phenomenal growth and Ginx’s vision is to bring together two incredibly popular forms of entertainment – gaming and television – to create a unique, global proposition.’

With an influx of cash comes a host of legal issues, though. Firstly, competitive gaming is currently suffering from immigration woes. The P-1 Visa, ‘applicable to aliens entering the United States to perform at a specific athletic competition as an athlete’, is notoriously difficult to get. It’s withholding has held many gamers back, as immigration officials will be largely inexperienced in awarding them for eSports events. The eSports community is currently ‘eagerly anticipating a White House response to a petition asking eSports to be formally recognized as athletics.’ Whatever your opinion is on eSports’ validity as sporting endeavour, it certainly has both the audience and the financial backing to overcome these kinds of problems.

Also problematic are the legal issues surrounding competitors’ pay. With the industry in its infancy, and its participants generally fairly young, the employment status of the players is itself a complicated matter. Some are given full-time contracts, others are self-employed, others are contractors - issues of tax and employment status are becoming rife as the eSports industry balloons. ‘It’s really complicated,’ eSports lawyer Jas Purewal told Red Bull. ‘Tax, and employment issues, and immigration, are the three most complex issues in eSports and I jest not when I say at conferences that resolving those challenges in eSports is the life's work of lawyers in the future.’

It’s difficult to imagine competitive gamers becoming global superstars, but in a sense they already have done. YouTube celebrities and Twitch fanatics have paved the way for a new breed of competition to take off, not just online but on TV. The nature of eSports make it destined to remain on the fringes, but this doesn’t mean it won’t be a lucrative industry - people pay to watch darts, after all - and with the backing of major broadcasters and some already notable sponsors, it seems the world of sports’ push to ‘go digital’ is being taken all too literally.

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