I had a chance to talk with Michael Prindiville about eSports this morning and I came away with a few new thoughts about eSports and how it fits into the live entertainment ecosystem.
eSports is a combination of spectator sports, gambling, and video games:
If you are of a certain age, the big jump might be to ask yourself, “what in the world would people want to sit around and watch video games for?”
I’ll admit it, I’ve done it.
After speaking with Michael, I came away with a better understanding of the appeal of eSports.
First, you have the game itself.
If you’ve been in college and lived in the dorms, you know that video games were like a connective tissue that brought people together, along with music and beer.
Second, you have the intensity and passion of a live entertainment experience.
I’ve heard about the eSports championships and they have cheering sections and engagement that can rival a major college football game.
Finally, you have gambling.
I never really thought about the gambling aspect, but having skin in the game makes things much more real.
Combined, you can start to see the appeal of eSports…it isn’t a one or nothing thing, but an all of the above thing.
Building demand is going to continue to be an issue:
Most sports are suffering from a demand issue right now. We talk about ratings, that’s great…but we also see how many empty seats there are.
In eSports, explaining what is going on, why it is important, and why people should care is going to continue to be an issue.
This shouldn’t come as a slight or a surprise, building and driving demand is one of the key aspects of any business.
For eSports, building demand might come with different challenges than other sports or entertainment products, but that isn’t new to any new category.
The in-person experience actually leads to a diverse revenue model:
I struggle to get behind any business that has a business model that relies too heavily on one or two revenue streams. This is why I worry so much about professional sports right now, the TV money has created an environment where all the other revenue streams are so small in comparison that it has created an environment full of unintended consequences.
In eSports, due to the nature of the games and the experience, many streams of revenue are built in from the start.
One of the most interesting for me was the way that partnerships could drive people out to sponsors, create an experience, and grow revenues.
After my conversation, I don’t know that eSports is going to be a huge hit or not, but I do have a better appreciation of the business model and what is being aimed for.