eSports Weekly Round-up — May 19, 2017

By Brian Cullingworth, Last updated May 19, 2017

e-Sports Viewership Up 19 Percent In 2016

IHS Markit study predicts that the eSports video market is expected to deliver US$1 billion in advertising revenues by 2020

A study by IHS Markit reports that in 2016 global viewership figures for eSports events rose by 19 percent to 6 billion hours, and forecasts that the eSports video market is expected to deliver US$1 billion in advertising revenues by 2020.

According to the research outfit’s eSports and the Future of TV report, online video remains the key driver of the eSports video market, with China the largest market for eSports video, accounting for 57 percent of all viewing last year. The number of video streams delivered in China totalled 11.1 billion in 2016, compared with North America, the second-largest market, with 2.7 billion video streams.

Esports advertising revenue was about US$280 million globally in 2016, but eSports is expected to become a US$1 billion industry by 2021. The growth will be primarily driven by video, influencer marketing and sponsorship, according to IHS Markit.

“The rapid growth of eSports audiences has attracted some of the industry’s largest media and technology companies to the genre, with the likes of Amazon and MTG acquiring key assets,” said Ted Hall, research director for IHS Markit and the report’s lead author.

“Some of these acquisitions are initiating shifts in eSports business dynamics, with players such as China’s Tencent seeking to control assets across the value chain, and publishers moving into league operation. Investment in eSports will pay off for its big-name backers, as the genre expands both within its target demographic and outside it, with increasing exposure on linear TV set to bring in casual and new fans.”

IHS found that whilst online still accounts for the majority of eSports video viewing, the global reach of the activity and the fact that publishers of eSports content are using video to drive other businesses holds important lessons for TV companies.

“The rise of eSports provides some valuable lessons for channels and programmers more broadly. In particular, it demonstrates the value of aggregating audiences globally, rather than the more country-specific approach that defined much of the traditional TV business,” said Dan Cryan, senior director, IHS Markit and a co-author of the report.

Concerns Over The Rise Of E-Sports Gambling

Vertical and its influence on gambling youth to be discussed at next GambleAware conference

The rise of eSports, and the gambling that increasingly is associated with it, is a cause for concern at the UK Gambling Commission, the GambleAware charity and ESIG, a nascent eSports self-regulatory body, according to a report in The Telegraph newspaper.

Quoting growth figures from the latest IHS Markit study (see previous InfoPowa report) the newspaper notes that since November 2014, the Gambling Commission had contacted 100 unlicensed online gambling sites, and 16 of these were related to gambling using virtual currencies on eSports tournaments.

The Commission found that unregulated third-party websites were on the rise, and there were concerns that the youthful demographic that principally makes up the eSports audience would be “lured into gambling”, the newspaper reported, observing that this issue is now a “key focus” for the Gambling Commission.

The problem gambling charity GambleAware is also worried, with chief executive Marc Etches telling the Telegraph that the charity is “very alert” to the eSports issue and the potential problem gambling dangers that it represents. He said that the subject will heavily feature on the agenda at GambleAware’s conference at the end of the year.

“We’ll be asking what implications this has for minimalising gambling-related harm in the future,” he said. “Gambling is everywhere and technology makes it very accessible. One specific thing we will be exploring is this convergence between gaming and gambling, which is very real.”

Ian Smith, the head of the first eSports self-regulatory body Esport Integrity Coalition (ESIG) said he understood the concerns being expressed regarding the thin boundary between eSports and gambling, and the impact this could have in the near future.

He said his organisation was trying to prevent the incursion of undesirable elements, but that eSports is now presently a “coherent industry” which ESIG was trying to bring together.

“ESIG is as close as it gets to some form of regulatory body,” he said. “We are literally in the process of recruiting members to ESIG one by one and it’s a long and tedious process.”

The lack of an established regulatory body and few formal relationships between eSports providers and gambling companies makes it a potentially attractive target for unregulated gambling sites, mainly because data collection is unreliable which makes it easier to defraud people, he opined.

The Telegraph noted that the Gambling Commission was engaging with major games development and financial processing companies to weed out unlicensed eSports betting providers.

“We are targeting the lifeblood of these businesses and Mastercard and Visa have agreed to work together with us, support which is key,” a Gambling Commission spokeswoman said.

The Telegraph article closes with the observation that super-corporates like Amazon also have an interest in ensuring the integrity of eSports, pointing out that the company bought streaming platform  Twitch and its 55 million-strong database three years ago for $970 million

“It will no doubt be keen to help regulators, like its peers in the payment processing world, tackle anything which could give the sector a bad name, as will Tencent, the Chinese internet giant, which dominates the Asian nation’s eSports market and this month announced the forthcoming launch of a dedicated esports TV channel, ESPTV,” the Telegraph concludes.

http://www.telegraph.co.uk/business/2017/05/13/gaming-gambling-rising-risk-esports/

Chinese Internet Giant Tencent To Construct E-Sport Industrial Park

Wuhu City chosen for centre

Chinese internet commerce giant Tencent, which acquired Finnish mobile games developer Supercell for $8.6 billion last year (see previous InfoPowa reports) has announced a new eSports project to construct an “eSports-themed industrial park” in the city of Wuhu, China.

The park will include a “gaming university, cultural and creative park, animation industry park, creative neighbourhood, Tencent cloud technology business community, and a Tencent cloud data centre.”

There is also the possibility that Tencent may develop an on-site theme park and facilities to hold national eSports tournaments once construction is complete in Wuhu.

The Wuhu project is part of ambitious Tencent plans that include an Honor of Kings theme park in Chengdu City, where the game’s developer is located. Honor of Kings is extremely popular with Chinese video gamers, and boasts over 50 million active users, according to independent studies. Revenues are around $435 million a month from the game.

The latest moves by Tencent are reportedly part of a strategic plan to expand the group’s eSports footprint; Tencent’s online gaming division reportedly delivers revenue of RMB70.84 billion and at last report revenues were up 25 percent year-on-year. The division provides almost half of the group’s annual revenue.

Dreyfus Plans To Extend Global Poker Index To Embrace E-Sports

Competitive gaming element important in the sportification of poker, says entrepreneur

Poker entrepreneur and CEO-founder of Mediarex Sports & Entertainment, Alex Dreyfus says he wants to expand his Global Poker Index project to embrace eSports.

“For the last two or three years, we’ve tried to bridge the eSports vertical, because my team and I believe that one of the angles we can use to promote poker is by focusing more on the competitive gaming element,” he said in a statement to Poker News this week.

He added that the industry should try and build more gateways between the two environments due to the importance of eSports to a new generation of live and online poker players.

“The World Poker Tour audience is 55-year-olds on Fox and ESPN, and appealing to them doesn’t attract the new demographic to whom poker really appeals,” Dreyfus said.

“If we don’t renew the reservoir of players and fans, then the game will dry up. I’m not talking about money, but interest and exposure. The eSports industry is not something that has come along last month, but has been building for the last 15 years.”

Dreyfus noted that a growing number of professional sports companies are investing and engaging with eSports in a way that they have not done with poker.

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