Blending new realities: The Switch on embracing esports’ return to the live venue while seeking new virtual opportunities
By Charles Conroy, vice president gaming, The Switch
Despite the pandemic throwing a curveball at many in the broader sports and entertainment sector, with venue closures and travel restrictions being rife, esports surfaced stronger than ever.
The impressive resilience of esports has been widely documented and discussed. However, perhaps less reflected upon is the enthusiasm of esports fans and organisations to return to live physical events, despite the sport by nature lending itself easily to the virtual world. As a result, in 2022, the esports industry aims to bring back the magic and power of live tournaments, creating myriad opportunities for both fans and esports organisations.
The wholesale return to live esports events will be driven by a strong flow of sponsorship dollars through leagues and teams, demonstrating their resilience to the global pandemic. The global esports audience grew to 474 million in 2021 from 436 million in 2020, up from 398 million before the pandemic in 2019, according to esports analytics and market research firm Newzoo. In 2021, revenues were up by 14.5%, with over 75% of the total coming from media rights and sponsorship, Newzoo also reported.
And the growth is expected to only get stronger from here. Allied Market Research recently reported that the esports industry generated revenues close to $1 billion in 2020 and projects the sector will generate $4.75 billion by 2030, with a compound annual growth rate of 17.5% from 2021 to 2030. Esports leagues and event organisers are at one of their most financially stable positions and – with their events enjoying unprecedented flexibility through advances in remote and cloud-based production technologies – are in a position to invest in bigger and better live event productions in 2022.
More live interaction for digital sport
Although esports leagues have proven they have the wherewithal and resources to remain profitable by running virtual shows, as we’ve seen over the course of the pandemic and beyond, the appetite for live events is enormous. In fact, while esports does not have to go through the pain of organising live events, many esports organisations are committed to getting back to the arena as soon as they can anyway.
Major live tournaments are already appearing on the esports calendar. League of Legends’ 2022 tournament is set to take place across four cities in North America – New York, Toronto, Mexico City and San Francisco – towards the end of next year. In addition, ESL’s Intel Extreme Masters will take place in Katowice, Poland and Cologne, Germany – and esports will, for the first time, be included in the 2022 Asian Games in Hangzhou, China. This return to the live venue presents a whole ecosystem of revenue and engagement opportunities.
Underpinning all of these developments will be the continued emergence of distributed production workflows, which bring together cloud, remote and mobile elements. Virtualised production workflows in the cloud will provide leagues with the flexibility, scale and robustness needed to support a wide range of live events over the next year, from the biggest to the more niche.
With uncertainties remaining on what travel restrictions and venue access will look like over the next 12 months, leagues need to prepare for the possibility of having minimal onsite personnel – often with considerably short notice – and instead embrace distributed production workflows. The result is production crew can work from anywhere using just a computer and an internet connection.
An entertainment pioneer
While a huge number of fans are itching to go back to venues to watch esports in person, many are also looking to visit new worlds in 2022 to make the live esports experience even more vivid. Indeed, a trend that is quickly gaining traction is the esports metaverse, championed recently by Meta (Facebook), Disney and Microsoft.
The metaverse has actually existed conceptually in esports for the past two decades, with gamers creating avatar versions of themselves to explore and engage with virtual environments. A modern esports metaverse could see gamers virtually attending live tournaments from the other side of the world through interactive experiences such as virtual reality, engaging in real time with fellow gamers and their favourite celebrity players.
The extent to which the metaverse will come to fruition as a genuinely viable business model in 2022 comes down to how much of someone’s life they are willing – or want – to transfer into the digital world. The main driving forces will be digital inclinations of younger players and the quality of content available. If digital offerings in the metaverse provide a greater level of interactivity, entertainment and fulfilment that engage the next generation of gamers, then we could see a closer collaboration between game studios and esports event organisers in 2022 to realise the potential of this technology.
In 2022, esports organisations are also expected to embrace other digital technologies that enhance fans’ enjoyment of the live event. These technologies include tradeable digital assets such as non-fungible tokens (NFTs), which would give fans unique memorabilia from games and build deeper relationships and loyalty with them beyond live tournaments. We’ve already seen traditional sports leagues such as the NFL and NBA trial NFTs to boost fan engagement and revenue. With the ease of clipping and editing that live production in a cloud environment offers, esports leagues and event organisers will be able to generate NFTs – unique images or GIFs capturing critical moments in the live action – in near real time. These NFTs will be available for fans at venues to purchase, complementing the live esports experience.
While 2021 was defined by a vast acceleration in the use of cloud-based production in esports, 2022 will be heralded as the year leagues took full advantage of the opportunities these workflows offer. The ability to tap into the best production crews in the world because they are not bound by geographical distance, coupled with the option to produce and deliver more live coverage from more venues, means we are primed to enjoy one of the most exciting and explosive years of live esports yet. The journey to get here may have seemed an arduous one during the past two years, but we have now reached a point where we are only really getting started.