The Tokyo Olympics are in full swing and yet somehow it feels, hollow. While we know that COVID-19 wreaked havoc on traditional sports, we hoped this would be the moment where sports could unite us once more. However, it hasn’t been the most compelling event. The majority of the early conversation has been about whether to have the games at all or how difficult it is to actually watch them. But there’s been one sector that’s seen growth, one area of sports & entertainment that continues to grow despite COVID restrictions. One that would have brought new, COVID-safe energy to the Olympic Games. Esports. But old media and traditional sports brands continue to ignore it.
Traditional Sports Are Struggling, (comparatively)
Even before the pandemic, traditional sports were already trying to solve for capturing younger viewers. But the shutdowns haven’t helped in the slightest. According to Forbes, viewership for the Stanley Cup finals was down by more than half (61%), and the NBA Finals were down by 49%. And the last World Series, between the LA Dodgers and Tampa Bay Rays, was the least-watched MLB championship series on record. Needless to say, this isn’t a great look for sportsball. While some will say the truncated seasons made sports harder to follow, others simply turned off ESPN in favor of their Playstations.
Conversely, the esports market is hitting its stride. When added all together, esports brings in more viewers than the MLB, NFL, NHL, and MLS. That’s right, more people are watching professional video games than professional baseball. And 73% of those viewers are between 18 and 34. Traditional sports are greying and esports is growing. So why is it so hard for traditional TV to adopt esports as a product?
An Obvious Meeting Point
We’ve all seen some of the massive numbers for broadcast licenses and exclusivity for traditional sports but Gen Z simply doesn’t care. Why? Because the leagues aren’t meeting them where they already are. Twitch and YouTube. Esports is inherently an online product. While in normal times, esports events are played in person. The vast majority of its consumption is via streaming platforms like Twitch. According to TwitchTracker, around 3 million people are tuned into Twitch at any given time a day. And when the big esports events such as League of Legends Worlds or EVO is going on, you can expect a large chunk of that audience to be glued to their computers. If it’s not streamed online or through an on-demand app, Gen Z is simply not interested. With traditional broadcasts, they can’t chat during the game, spam emotes during a big play, or even trigger funny alerts that make them feel like a part of the action. That’s a massive issue for big sports broadcasters.
Fast forward to the Tokyo Olympics and the attempt to bridge the gap is half-hearted at best. Earlier this year, the IOC relegated esports to a side event, which featured none of the top games in the world. A choice that all but ensured that no one would watch it. Also, NBC’s efforts on Twitch feature no actual Olympic events or replays of events, creating little incentive to watch on Twitch above any other platform. Even more head-scratching is that videos of previous streams are not available to watch. This means you must watch it live or miss it forever. A cardinal sin in media nowadays.
But The Money?
With all this said, traditional sports still have a 100-year head start on esports. The infrastructure for revenue, advertising, and media have all been long established. But that doesn’t mean esports won’t get there. Others are investing in esports because they see the tides shifting. Esports organization, Evil Geniuses, just partnered with the English Premier League’s Wolverhampton Wanderers this month. The move sees EG now valued at around $255 million. Meaning an esports team is more valuable than half the teams in the Spanish Soccer League, La Liga. Team Solo Mid was valued at around $440 million in 2020, making putting it on the same level as back-to-back Stanley Cup Champions, Tampa Bay Lightning.
Esports is already a billion-dollar industry that is going to continue to grow. And a litany of ad buyers (who should be very attractive to broadcasters) are already in on esports. Budweiser, Facebook, Honda, Red Bull, T-Mobile, and others have taken the plunge in the space. Now it’s time for the TV/Streaming companies to do the same. They have the know-how to take esports to a truly transcendental level but refuse to see its value. But if they don’t act now, Twitch and YouTube will corner those markets and close off a major avenue for old media. So NBC, ABC, and others…give video games a shot. I think you’ll be surprised.