ith live sports temporarily on hold, more Americans than ever have turned to esports to fill the void. Robert Rippee, director of the hospitality and esports labs within UNLV’s International Gaming Institute (IGI), spoke about the phenomenon and what’s next.
As people hunkered down at home and looked for new ways to live, work, learn, and (of course) play, one sport emerged perhaps stronger than its ever been: competitive video gaming, or esports.
Prior to the pandemic, the esports industry had already grown into a global force, with a market surpassing $1 billion for the first time in 2019.
While arena-packing live esports tournaments have taken a hit along with other sports, none are perhaps better suited to benefit from current stay-at-home orders and the slow, but eventual, return of live sporting events. In March alone, viewership on the popular video game streaming platform Twitch rose 23 percent, which amounts to about 1.2 billion hours of video games watched.
NASCAR, Major League Baseball, the NFL and soccer have also turned to esports to keep fans engaged with players’ tournaments during the hiatus from live competition. Even Vegas is getting in on the action, as the Nevada Gaming Control Board approved wagering within the past month on multiple esports competitions.
How can the esports industry parlay its strong mainstream interest during the pandemic into long term growth?
It’s important that the esports industry sustain the innovation it has shown, which includes continuing to deliver strong entertainment-style products that are of interest to a mainstream audience.
Additionally, the industry can partner with facilities and brands that mainstream audiences will be seeking to reengage with. Work with these brands to find a shared customer strategy, find commonality, and then deliver joint experiences.
There’s strong market potential, both with core gamers and with mainstream audiences. The growth in esports competition in colleges and high schools is a direct indicator of that potential. I once challenged a group of university presidents to tell me what was the largest student club or organization on their campus. My bet was that it was the esport club.
Many professional sports leagues have turned to esports to stay connected with fans during the shutdown. What impact does this have on building overall interest in esports among new demographics?
To participate in esports, any outside company has to work to truly understand the industry and take the time to become a part of the ecosystem. This audience, the esports gamers and spectators, desires authentic and sustained company engagement, which means a lot more than just throwing ad or sponsorship dollars at an event.
I’ve heard students in my lab, all gamers, discuss different companies in that context. They react negatively if they feel a company is simply throwing dollars at the sport rather as a way to curry favor than truly participating in it. To build a lasting impression, they need to be in it for the long haul.
How does involvement from celebrities – particularly professional athletes – help build the credibility of esports as an industry on the rise?
It helps, but only if the celebrity has some relevance to the audience. Using an extreme example, a long-retired NFL player would have little relevance to the core esports participant or fan. It is likely they would not even know who he is. On the other hand, a celebrity DJ would likely see stronger crossover support between fans of their music and the esports audience. Again, there needs to be an authentic connection, which requires taking time to truly understand the audiences involved.
We’ve seen some successful examples in the professional sports world. Look at the recent experience of NASCAR with online racing during the pandemic. They had record views for their media and stronger response than I would have predicted. Major League Baseball also recently launched a players tournament that will now air on ESPN, which has been growing its coverage of esports in recent years.
Temporary closures have made it harder for gaming operators to engage with customers. How can esports help fill that void?
The growth of online gaming while people are nested at home was not surprising. Consumers are online to a degree we have never experienced before, and a significant percentage of that time is spent in entertainment pursuits. Smart operators realize they are, in fact, entertainment providers. Diversifying their entertainment offerings to include online components such as these make perfect sense. Many already discovered it with social gaming; this is one step beyond that.
There is definitely a heightened interest in esports in the gaming community. Given the present circumstances, it is highly correlated with increased interest and participation in online gaming.
Operators are now thinking about more diverse models. Models that might engage an existing customer in a different way or a completely new customer who has little interest in traditional bricks and mortar casinos.
Over the past month, the Nevada Gaming Control Board approved wagering on seven different esports tournaments? Why is this a big deal?
Gaming operators and sports betting are trying to diversify, I think this is a signal from Nevada Gaming Control Board that they are there to support them and help them find innovative ways to reach this audience.
That said, wagering on esports hasn’t grown as quickly in the U.S. as it has globally. In my opinion, one reason for this is that we haven’t yet found the right type of convergence between esports fans and wagering in U.S. markets. The opportunity is there. Now it is up to the innovative operators to experiment and determine the way to drive that convergence.
How can gaming companies use this bump in esports interest to keep core fans and new audiences engaged as things begin to trend back to normal?
First, companies must take the time to understand esports and the behaviors, trends and feelings of the audience. It’s not a quick fix.
It’s also important to appreciate that the audience includes both gamers and spectators. Finally, and perhaps most importantly, they need to do their research and not make unnecessary assumptions about demographics and esports, such as assuming all gamers are young people.
Some research suggests that the average age of a gamer is 30 years old. Given this average, a significant audience is already well above the legal gambling age and should be of interest to all operators. Esports has also emerged as entertainment and not purely for gamers. If one considers the exponential growth in viewership of platforms like Twitch, it would shatter any preconceived notion that the popularity in the paradigm has been driven only by hard-core gamers. This trend tells us that there is a significant spectator element as well, a fan base.
As Nevada and the nation begin to recover from the COVID-19 pandemic, how can esports play a role in the gaming industry’s comeback?
It’s hard to say, but we certainly have some excellent competitive facilities in Las Vegas for esports, such as at the Luxor. Ultimately, time will tell.
We know the gaming industry is going to face capital constraints during the recovery. Because of this, the ability to build or convert facilities dedicated to esports will be difficult, but the more entrepreneurial and innovative operators will also see this as an opportunity to reach an underserved segment.
The late Dr. Clayton Christensen described this phenomenon very well in his landmark book, The Innovator’s Dilemma. Dr. Christensen theorized that those disruptive ideas that serve an underserved segment can, in turn, grow to dominate a market.