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Competition, Repetition, Exhibition

The world still has not adapted to the uproar and popularity of video games and E-sports.

Entertainment comes in all shapes and forms to fit everyone's interests, whether or not you enjoy

playing a sport, cook food, play video games, or watch television, there is always something to

occupy your time. When you decide to consume entertainment it is most likely in your favor to

consume entertainment that best suits your needs at that time, E-sports is a shallow puddle in the

river of choices.

Although the first sought video game to be produced was in 1958, I was born tens of

years later in 2005, peaking my interests as the popularity rose over the years. When I was a kid I

lived in a house with two families residing, one relative played video games in his room, and my

dad played video games in the living room both playing two vastly different games. One of my

first memories is seeing my dad playing a game I still play to this day, Call of Duty Black Ops 1

on the Xbox 360, whilst my relative played The Dead Rising series in his small room across the

house. While this was the first time I played video games, this would not be my last. During the

following years I start to play more and more video games ranging from all consoles, the Xbox

360, Playstation 2, 3 and Vita, Nintendo 64, and later down the road, the newer generation of

consoles; Xbox One, Xbox Series S/X, and the PS4 were the consoles I picked up as time passed.

With the development of any form of new entertainment, the opportunities to become a

professional kick in and give playing a new form previously not imagined. Under those

circumstances the professional scene rises under the name “E-sports” defined as a multiplayer

video game in which is played under professional circumstances for spectators, played by

professional gamers. Accompanied by professionalism, comes the price to pay for the production

and concatenation of professional events. The cost to run professional events cost an exorbitant

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amount of money, and must take into account (like any sport), who is playing, where they are

playing, and what they are playing. As much as I enjoy watching E-sports content, I often watch

clips of it and do not actually attend events due to inconveniences. The prices of tickets to attend

are 2,500 yen to 8,000. Knowing this, to drag attention to events that are not as prestigious as

EVO, how will they profit? Do they need prestigious or well known players? Do the games

being played need to be in trend? Does a good facility for attending matter? Which is why it

brings me to question, “What factors contribute to making a successful E-sports event?”

Many people, particularly the older generation, may not know what an eSport is, let’s

understand what an eSport is. ESports is the competitive market for video games, also short for

electronic sports. Where viewers can watch high level professional video game exhibitions for a

prize pool of large sums of money. According to Urbanaik, “E-sport is a lifestyle for computer

gamers. It becomes a real career path from which you can start, develop, and build your future…

The aim of e-sports is defeating other players. It could be done by neutralizing them, or just like

in sports games, by racing as fast as possible to cross the finish line before your opponents. In

addition, the win may be achieved by scoring the most points.” The process of ranking eSports

players also revolves around similar methods of active sports that most people know, but for

certain games the ranking criteria is more complex and in-depth than normal. In layman’s terms

for specifically one of the most popular eSports games, the ranking criteria for eSports players

under a system called “COMET”, the players are ranked on their individual inputs to the match.

Factors such as: Effectiveness per round, Frag Gaining Assessment (Fragging, meaning to

eliminate an enemy player), and the player's Failures per Round (Urbanaik). Each one of these

assessment systems analyzes the players ability in smaller subsections such as the average

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damage per round and average kills per round. This criteria of ranking is one of many that eSport

games use to rank players and leaderboards across the board of the eSports scene.

The rise of widespread activity of playing video games is rampant, holding a population

of players interested in eSports. All over the world people compete online in video games to see

which players' skills are greater than the majority. Esports brings this to the masses and has the

best of the best players perform in front of large crowds, as normal active sports does. According

to Jun, “in Korea, games are the barometer of the generation gap” (qtd.in Mozur). Korea has had

huge impacts and career changing opportunities due to eSports and idle time for fun and pleasure

to indulge in. Not only are Korean citizens impacted, but the younger generation across the

globe. College students who wish for scholarships, are competing across the board for eSport

activities to gain money to compensate for the price of college. The start-up of eSports was

rough but the popularity grew fast and interests propelled through the roofs. Companies who

wanted to invest money into eSports as an opportunity to branch out and gain attention and

money from viewership of eSports start to hand out scholarships for those who compete with

them, support in things such as organization, banners, support (financially) and breeding a new

generation of superfans and players to adore – people who not only play games but also consider

them a spectator sport (Wingfield).

To understand the success, we must first look at the history of eSports. ESports dates

back to a time where competition in the industry was never thought of. According to Mozur,

“though gamers and industry insiders have different theories about how e-sports became so

popular in South Korea, nearly all versions started in the late 1990s.” The start of the eSports

craze in the 1990’s eventually led to where we land today. Computer games now play a major

role in all countries in the world, and the gaming industry could never be any more popular than

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before with all the technology that surrounds us. To a couple thousands of dollars to gain,

according to Schlesinger, “the competitive gaming industry is expected to generate US$152-

billion in revenue this year alone, according to research firm Newzoo, an increase of 9.6 cent

versus 2018. Newzoo also forecasts consumers will spend about US$196-billion by 2022, with

China driving the growth after recently surpassing the U.s as e-gamin’s largest market.” The

success mark has shown to propel substantially over the years, a factor of success that during the

history of eSports, and the improvement of technology, is that over time and more people have

had time to digest the electronic gaming products, the success has been improved rapidly. The

more common video game consoles became, the more competitive and consumer sports had

gained traction. Within most forms of media, the longer and updated the content and

advancements are, the more the popularity rises as we can see with how large online based

communities are. As history grows, the community grows. They would not work without each

other; in that aspect this factor in itself is a singular exponent to the success of any e-sport event.

ESports does not have a stable business environment like most other sports and industries

related to entertainment. The way eSports is built relies on the sole factor of having a team or

sole participant winning the grand prize for the organization that sponsors them (mainly always

referred to as “orgs”). According to Schlesinger, “Despite the rapid rise of the relatively-nascent

industry, e-sports ETFs are still small by market-capitalization and trading volume, two qualities

Mr. Straus says ‘are often associated with hot investments at risk of suddenly going cold’”. The

industry of trying to capitalize on the “hot investments at risk of suddenly going colds” is very

“relatively-nascent” (uprisinging and new), and being able to take the risk and actually gain from

the system is largely a gamble. ESports providers often face tough decisions as the smaller sided

companies and lesser-known teams are often put up to a dilemma in which the org either stays

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open and risks losing money, (as ESports is not very profitable for money in pure-competition)

or shut down the org and stop losing money on a lost investment. According to Schlesinger,

“Mr. Straus cautions e-sports investors are likely to experience a ‘boom-bust’ ride toward

profitability. For example, many ETFs are highly concentrated among a few big game-makers

and a lot of small, fledgling firms, which can make them volatile.”. Going off what Mr. Straus is

getting at, during one second you could be completely booming in the eSports scene, but after

some time can go completely bust and lose all profits. Although this factor is a major down-side,

it also plays a big role in what makes an eSports event successful.

ESports isn’t a stable way of income for most organizations. A couple of monetization

tactics that are used to help keep eSport events alive are things such as Sponsorships,

merchandise, investments, and league pays. The way professional gamers are hired is just

enough for them to get by and practice while living under roofs already paid for, so how would

they get money? The professional gamers also do live-streaming on the side to get individual

income; although orgs tend to take money from their streaming profits as well. The streamers

also include paid-sponsorships to help broaden the spectrum of income and pull in more cash.

Advertising is a key-factor to provide success to various eSport events. Sponsorships and

investors both help give indirect exposure to the eSports scene that gain profit to everyone

involved. “Investors can get indirect exposure to e-sports through broad-based EFTs that hold

companies such as Facebook, Apple. Amazon, Google and Microsoft. Those seeking pure

exposure may want to consider EFTs such as HERO, ESPO, GAMR or the ROundhill bitkraft

eSports & Digital Entertainment ETF (NERD)” (Schlesinger). EFTs can automatically move

money from bank accounts without interaction between the two parties. The want between the

two parties is how the success initially starts, according to Mozur, “About a decade ago,

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companies began to see the promise in sponsoring e-sports starts. Before long the companies,

like Samsung, the giant technology company, and CJ Games, one of Korea’s most successful

game developers, were sponsoring teams that lived in communal houses and trained 12 hours a

day.” The relationship between the companies and orgs with sponsors help promote and

industrialize the success of the eSports scene, fluctuating numbers around the world as soccer is

as world-wide, eSports is the same.7

Such as real sports, certain sports are more popular with the viewers than others. Sports

such as Soccer or Basketball are more popular than sports such as hockey and volleyball. In the

eSports scene the most popular video games are according to Mr. Lala, “the two most popular

games on the market today, Fortnite (partly owned by Chinese video game maker Tencent

Holdings Ltd.) and Minecraft (Owned by Microsoft Corp.), are driving revenues.” (qtd.in

Schlesinger). Also to mention the highest gross-earning eSport being Dota 2 and Fortnite

according to statistics provided to me across multiple database articles. (esportsearnings.com).

Dota 2 total revenue expenses currently at $313,563,517.23, and Fortnite expending

$154,102,642.13, both having over 1,000+ tournaments held in total. These eSports tournaments

hold very high regard and in-trend games that the industry, both sponsors and gamers enjoy

playing games that are in demand. Doing so, not only do more sponsorships and promotions

become more frequent and bold, but hold higher audience watch rates to pull more revenue from

the advertising, ad-revenue, and sponsorship deals followed by the viewers. Sponsoring also

needs to be healthy and seemingly unforceful according to Korpimies, he elaborates “a healthy

business relationship, a sponsee can for example explain that they do not want to post one of the

social media contents in December because otherwise their social media feed would only consist

of ads due to the lack of tournaments. This creates the interesting problem of how flexible

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companies need and should be. According to Interviewee A, flexibility is the most important

factor to maintaining a working relationship”. Providing helpful information to when and how a

sponsor can be at its most effective to branching to the widest audience. With this piece of

information, we can deduce that a few factors of eSports sponsorships working is mainly with

the contract and when to advertise. To intertwine this information, one very apparent factor of

success here, is that when the game being produced is liked among the vast majority of gamers

around the world, sponsoring here would make success skyrocket and more profit and production

cost is put into the events. Although Dota 2 and Fortnite hold 1,000 tournaments, these are

smaller numbers than games such as Counter Strike: Global Offensive (CS:GO) and League of

Legends (LOL), attaining up to 6,000+ tournaments held with a total prize pool expense margin

of $99,000,000-$140,000,000, with triple the amounts of tournaments than the two bigger tiles

being DOTA and Fortnite (esportsearnings.com). Merchandising and appealing is a big portion

of success to the profit of not only the tournaments but to the eSports scene as a whole.

Appealing to the younger audiences and building the connections between the players, the game,

the audience, and the industry boost affiliation between profit which is not only held at the very

top of the eSports barometer, but between all eSports games’s comunnities.

The research that has been conducted helps evaluate the reasons why and why not the

eSports scene can become profitable, and what factors contribute to a successful eSports event.

Although this research has deduced that the main factors of success are: Popularity,

Sponsorships, Merchandising, Appeal to Players, Investments, and Community Growth, we must

break down the main factors that contribute to success. The main factor that contributes to the

success of eSports tournaments and eSports as an industry is sponsorships and investments. The

biggest annual income in the eSports industry is Sponsorships. Sponsorships besides help give

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funds to run eSports events, but keeps the community engaged and recycling profits back into the

industry. Sponsorships are not only vibrant logos and marketing advertisements, but come in

forms such as coupons, and even brands that do not relate to video games, expanding the growth

of the eSports scene. Sponsorships help provide not only income to the people who are playing

and entertaining the viewers, but help the viewers in saving money and spending more with

coupons or products that are sold under the Sponsored players and or teams. ESports is not only

important to me, but everyone in the gaming community because of how much the entertainment

industry has developed. In addition to this, does this have to matter to those who partake in this

entertainment, but those in any environment; it provides a large portion of entertainment to a

rising scene of people who are interested in game just as people who enjoy sports enjoy watching

it, as to people who know what sports are and not particularly interested but support it. To

conclude, eSports events would not be able to run as wide and popular as it is currently to this

day without the investors putting money into this form of entertainments, and sponsors

sponsoring eSports players and or teams to help keep the orgs and players in business to help

keep the eSports tournaments and events en masse.

Work Cited
Korpimies, Samuel. "Sponsorships in eSports." (2017).

Leon, M., Hinojosa-Ramos, M., León-Lopez, A., Belli, S., López-Raventós, C., & Florez, H.

(2022). eSports events trend: A promising opportunity for tourism offerings.

Sustainability, 14(21), 13803. doi:https://doi.org/10.3390/su142113803

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Mozur, P. (2014, Oct 20). E-sports serve as korean pastime: Computer games play major role in

society, but danger signs emerge. International New York Times Retrieved from

https://www.proquest.com/newspapers/e-sports-serve-as-korean-pastime/docview/

1613815374/se-2

Parshakov, Petr, and Marina Zavertiaeva. "Determinants of performance in eSports: A country-

level analysis." International Journal of Sport Finance 13.1 (2018): 34-51.

Sazali, A. A. (2019, Dec 17). International body to galvanise e-sports launched in singapore:

Global E-sports federation to instil olympic values in fast-growing sport. The Straits

Times Retrieved from https://www.proquest.com/newspapers/international-body-

galvanise-e-sports-launched/docview/2327312765/se-2

Schlesinger, J. (2019). E-sports revenues are soaring, but should investors play along?: Instead of

betting on one e-gaming company, ETFs can provide diversification among e-sports

providers.

Top Games Awarding Prize Money.” Esports Game Rankings :: Esports

“Earnings,https://www.esportsearnings.com/games.

Urbaniak, K., Wątróbski, J., & Sałabun, W. (2020). Identification of players ranking in E-sport.

Applied Sciences, 10(19), 6768. doi:https://doi.org/10.3390/app10196768

Wingfield, N. (2014, Dec 10). E-sports become a big-time college team event: E-sports craze

attracts thousands of students with scholarship prizes. International New York Times

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Retrieved from https://www.proquest.com/newspapers/e-sports-become-big-time-

college-team-event/docview/1634499977/se-2

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