OVERVIEW OF ESPORTS

Overview of Esports 30th Dec 2021 By Matthew Chan Kuok Han Learning Goals 1. Students will be able to comprehend & understand the definition of esports. a. Define the KEY difference between Esports & Gaming. b. List out the KEY game which help propel South Korea into an esports powerhouse. c. Provide the reason why esports was able to grow so quickly in the 2000s. 2. Students will understand the ecosystem of esports & it’s stakeholders. a. List out all relevant stakeholders of the esports ecosystem. b. List out 3 Malaysian Esports Organizations & Event Organisers c. List out at least 2 Game Developer & the Game Title they Produce 3. Students will be able to explain simple monetization models & career advancements of an esports organization. a. List out the 3 main avenues of revenue generation of esports teams b. Explain 1 economical reasoning on why teams create new jerseys every year c. Explain the basics of broadcasting in esports. LOOP 1 1 Introduction Before we dive into any topic it is always important to understand the base history & definition of any subject and this is no different. The best way to truly explain what esports is, to go through what it really means. In short esports, means electronic sports & just like sports, the thing that make esports interesting is competition. Esports in its truest form of nature means competitive gaming, where a group of people come together to play and compete against one another to win a prize or a title. That’s the main definition of esports. 1.1 Gaming vs Esports Now it is important to note the difference between gaming and esports. Esports is part of a gaming ecosystem whereas gaming does not need esports in its infrastructure to be relevant. To fully understand this, think about how music functions. Music is derived from instruments like guitars & pianos. However, music can be created exclusively with a guitar without the function of a piano but on the other hand, whatever notes and sound you make with the guitar will be considered a genre of music. Now let’s compare that back in esports terms. Like I mentioned esports is 100% part of the gaming ecosystem but there are also other factors part of it. I’m sure many of you have heard of the game called “Angry Birds”. You see, Angry Birds doesn’t have any form of esports in it, you have a goal (to eliminate the birds) and you have your resources (using the Angry Birds). While you’re playing the game, it’s not esports, its just gaming.

Esports come to play when two parties are competing with one another, for a prize to win. Doesn’t matter its on an international stage with millions of people watching or it’s just a small competition in your school. As long as there’s a competition & players are going against each other on a fair setting, that’s esports, that’s the key difference between esports & gaming. Fig 1.1 Esports is within the Gaming Ecosystem 1.2 History of Asian Esports Now that you know how to differentiate esports & gaming. Let’s go into the 2nd layer of the introduction, the history. There’s a lot of debate where esports started but generally people have agreed that the first signs of it came in 1972 at University of Standford where students came together to play a game called “Spacewar”. The students compete against each other to see who could get the highest score and the winner got 1 year of magazine subscriptions of the “Rolling Stones”. Fig 1.2 Game of Spacewar @ 1972 Soon after, countries all over the world started to have the same concept, competing in games for a prize. The most famous example is the country of South Korea & the game Starcraft. It was a simple game of strategy where players would have to overlook building & controlling of “armies”. Until today, Starcraft is seen as one of the most influential esports titles in South Korea. Due to its complex gameplay, the public was getting extremely interested in watching the top players come up with strategy with lighting fast reflexes to compete against one another.

As the interest of the game started to grow, competitions started to get bigger. First it was small rooms, then it was hosted in malls, and it became so huge that once the finals were hosted on a beach. Fig 1.3 The Korean Star League 2006 Finals, Busan, South Korea. Due to the increased popularity of esports, the players became superstars of the game. Players were getting into TV commercials & followed by millions of fans. While South Korea has Starcraft, European & North American countries had Defensives of the Ancient (DotA) & Counter Strike 1.6 (CS 1.6). These games are considered the major players on how esports grew in these continents. Akin to how esports grew in South Korea, they played a similar role in those countries, on a smaller scale of course. Over the years, more gaming titles became more prominent into the esports culture with more support over the years. It is important to note why the 2000s were the growth years of esports. It was because of internet availability. It was these years where internet became more readily available for people to use, and gamers were getting connected to one another and not limited by location anymore. Internet united not only people but also gamers, thus creating esports. LOOP 2 2 Ecosystem of Esports To understand the full esports, you’ll have to understand there are many different stakeholders in the system that makes the whole thing work. Below is a chart of the esports ecosystem and I will slowly dive into each ecosystem and how they play a part in the role. 2.1 Teams Teams are party who participate in the tournaments. Locally you might be able to recall teams such as Orange Esports, Geek Fam & SMG as examples. Internationally there are many more teams to reference, EVOS Esports, Faze Clan, TSM, Fnatic are just a few of the thousands upon thousands of teams out there who compete in tournaments. These teams provide aid infrastructure for players to compete in tournaments, they give players salary, accommodation, and other training needs so their players can fully focus on training and get the best results.

Teams can consist of multiple people in the hierarchy, as of 2021, it is not surprising for teams to have players, coaches, analyst & managers as part of their “team”. Everyone plays an important role for the team to excel. The players are the one who are great at the game and compete at the highest level while coaches & analyst are typically thinkers, drafting out strategies for the players to use in-game. Finally, the managers of the team. They are the personal that keep everyone focused and keep everything organized. While teams might separate the work differently, the general idea is there. 2.2 Game Developers & Games Titles This stakeholder is arguably one of the most important in the whole ecosystem as without them, esports wouldn’t even exist. Game developers are people who well, develop games. Think of Valve, Riot Games, Moonton, Tencent. These are companies that make games happen, all esports titles are derived from gaming, as we have already established in the previous chapter. Without Riot there will be no League of Legends, without Valve, DotA2 & CS:GO will not exist, so on and so forth. Game developers are at the heart of the whole esports ecosystem and is it important to understand this is the key difference between esports & sports. In sports no one can “own” the sports; think about it who “owns” football, FIFA doesn’t own it, they just govern it. While in esports, games are “owned” by developers. Developers are the stakeholders that identifies how they want the game titles to be integrated with the esports ecosystem. If you have developers that aren’t interested in esports, the game just won’t be a success & vice versa. 2.3 Event Organisers Event organisers are the companies who create events, as the name states. They are the ones that work closely with the Game Developers to make the esports ecosystem a reality. Big event organisers in Malaysia can be seen as IO Esports, ESL Asia and The Gaming Company. These guys are the ones who make the groundwork happen. They interact with teams to get them to join events and also work with developers to ensure all the rules & regulations are followed. They are also responsible on ensuring the esports “show” is running smoothly at al times. Typically, they are the broadcasters of events & ensure the esports tournaments shows are livestreamed on the internet so everyone can enjoy. 2.4 Viewers/Fans Lastly, without the fans to enjoy, esports will be nothing. It is important to remember that esports is an entertainment & just like another other entertainment, if there’s no one interested in it, it will not be a success. Teams and event organisers work extremely hard to entertain their fans, either with good tournament performances or with fun content. The biggest mistake anyone can make it to neglect your fans. Without fans, teams will not have any influence and event oragnisers will not have anyone to entertain. Key point: esports is a form of entertainment, thus it is a form of marketing for game developers. Think about the last time you watched an esports event, did you have an urge to suddenly play the game again? That’s the power of esports. LOOP 3

3 Monetization in Esports A lot of times people wonder, how to you earn money in esports, especially as a team. Is the prizepool enough? Well, I can tell you it comes from various different factors. Esports is just like any other business, think of esports as a traditional sports team. Think about how Real Madrid or Manchester City make money, that’s how esports teams make money as well. 3.1 Sponsorship & Content/Marketing The first key aspect to look at is sponsorship. As teams get more & more famous in the community, they will naturally attract more attention as well. This will translate to brands being interested in your brand to advertise to their key market. Brands will pay big money to be associated and connected to esports teams, showcased their logo in their jerseys or just having a picture with the players holding the projects will bring attention to their brand. Fig 3.1 EVOS Esports Players on Yamaha Bikes Teams generally do content with the brand’s item to showcase the product. Different brands might have different goals while working with esports teams. Some companies may want viewers to just know about their brand & products while others would want the fans to buy their products. Teams will create marketing campaigns with their players to advertise these items. In any situation, each brand will have their own goal and they see esports teams as marketing tools to get their product shown to the public, and generally that’s how sponsorship work. They will pay a team a lumpsum of money in exchange of awareness and associate with the team and can directly target the team’s fanbase. 3.2 Prizepool

Of course, there’s also prize pool. This is pretty straightforward. Team wins championships they also earns money. However, it isn’t lucrative as people think. It’s true that some tournaments have huge prize money for teams to win but majority of the money goes back to the players. Typically, teams such as EVOS Esports & TSM will only take around 10% of the prize money they win and after you consider all the factors of payment the players salary, renting gaming houses and buying equipment, it isn’t enough money. 3.3 Merchandise Teams also invest in creating their own line of merchandise to bring in more money for the team. This can be an extremely profitable for teams as bigger teams can sell a lot of quantity as popular teams might have fans in the millions. This is why you can see teams creating their multiple items of merchandise and different jerseys every year, so they can capitalize on their supporters buying jerseys every year, generating more income. At it’s core, merchandise can be the part where esports organisation generate the most money. 4 Roles in Esports In this last part of the overview of esports chapter, I’m going to talk about all the possible roles that are needed for the whole esports ecosystem to function. From an outsider’s perspective, it might only be seen as gamers are the most integral part of esports, but if you dive in deeper, you’ll start to realise that a lot of other roles are needed as well. In this part, I’ll dive into the lesser known part of jobs inside the esports ecosystem. 4.1 Gaming Going from the most obvious ones first, players & coaches, the heart of any team. As a spectator it may seem as though there’s a high chance for casual gamers to have a career in professional gaming, but it is only the top 0.00001% of gamers that can truly make gaming as a pro career. It is important to remember how hard it is to break into the esports pro player level. While there also other avenues such as coaches & analyst that is also part of the Gaming vertical. 4.2 Management/Corporate Team An overlooked part of the esports team’s support system is the management team. The people that actually make the whole operations for the team. You might be surprised how much paperwork is needed for teams to operate. Below is a list of jobs required by almost every esports organization that may not know about. 1. Finance Admin 2. Videographer/Editor 3. HR Admin 4. Sales & Business Development As you can see, esports organisations are just like any other company, they need people to also run the backend of the business for the team to keep on operating. Player contracts, payrolls & content planning, essential parts of esports organisations. 4.3 League Operators

For teams to compete, there needs to be a league operator as well. These are the guys who ensure the tournament runs smoothly. They are essentially the referees of the game, making sure no teams are cheating and are following the schedule. Without these people, esports events will be a literal disaster as they are the ones who will communicate with teams on their match-ups and also advice teams whenever there’s a dispute between any teams. League Operators are highly regarded in the ecosystem and every event organisers will have large teams of League Operators or L.O. in charge in keeping the tournament fair & on-time. Think of them as football referees or badminton umpires, they are the ones who typically write the rulebooks of events as well. 4.4 Broadcasting The front liner of all esports tournaments. Broadcasting is an often overlooked art in the ecosystem. People forget how difficult it is to broadcast esports events where activities are happening so quickly in front of everyone’s eyes. The broadcasting team are the ones responsible that make the shows happen. 4.4.1 Observers Observers are responsible of controlling the camera in-game and showcasing what is projected onto the livestream for the viewers to see. A good tournament can be decided whether the observers are attentive as bad observers might miss critical actions on camera, making the audience miss crucial parts of the game. 4.4.2 Shoutcasters Shoutcasters are essential the commentators that narrate the game for the audience. These guys are important as they essential act as the “host” of the show and will be the voice that viewers listen to throughout the broadcast. Shoutcasters spent years & years studying their craft and learning about the game. It is not as easy as just good public speaking, you’ll have to spend time to study about teams, game mechanics & also be charismatic enough on camera for people to enjoy the show. 4.4.3 Directors/Producers Last but definitely not least are directors. Directors are responsible to put everything together, they are the ones that control the cameras, the microphone volume and also the lights. They have one of the hardest jobs whenever the esports show is ongoing as they have to ensure everyone is working together like a well oil-machine. Handling live shows is scary enough, handling live esports shows are extremely difficult as an esports director cannot control the outcome, they have to react to what the teams onstage are doing and quickly come up with an entertaining programme. Conclusion I hope after reading through these materials, you’re able to comprehend the basics of esports. As you can see from the notes, esports isn’t as straightforward as you might think. There multiple layers to

consider. However, if there is one thing you should take away from this chapter, is that esports is general a form of entertainment and competition. It is entertainment for the viewers watching & competition for the gamers to compete in. Everything else in between is what makes up of the esports ecosystem.