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Arrival…of E-Sports

Issued: April 07 2017

E-sports tournaments including Counter Strike: Global Offensive, above, now generate millions of dollars.

Bird & Bird’s inaugural sports and media seminar provided an overview of one of the fastest growing, and least understood, sports on the planet: e-sports.

E-sports is a form of competition that is facilitated by video games. Players, playing in teams against each other, are projected on screens in stadiums and are seen by large audiences with paid tickets.

According to research, traditional sports tournaments in 2016 such as the Wimbledon Men’s/Women’s Singles, Golf Masters and Tour de France cycling race generated US$27.12 million, US$10 million and US$2.45 million in revenue, respectively.

For e-sports in the same year, the international Dota 2, Counter- Strike: Global Offensive ESL One Cologne and League of Legends’ World Championship tournaments made US$20.8 million, US$1 million and US$5.07 million in revenue, respectively.

“Despite e-sports’ infancy, its revenue is catching up with traditional sports and global audience is also growing significantly,” says Alex Norman, a registered foreign lawyer at Bird & Bird in Hong Kong.

Statistics show that in 2015, there were approximately 111 million occasional viewers and 115 million frequent viewers of e-sports. But in 2016, the numbers jumped to 125 million and 131 million, respectively. Projections for 2019 also look promising: 165 million and 180 million.

Each viewer is worth approximately US$3.62 according to research.

In terms of audience demographic, 37% percent of the audience is males aged between 21 and 35. Males aged 10 to 20 account for 20%, and males aged 36 to 50 for 11%. While the audience is predominantly male, females aged 21 to 35 make up 16%, which is the largest slice in this gender.

To handle such massive audience, e-sports involve publishers, associations, tournament organizers, leagues, teams, sponsors, games, players and streaming services.

“We have strategic training programmes and coaches for our professional players, as if any other sports,” says Derek Cheung, chief executive officer at Hong Kong E-sports. “We have content and event teams to organize tournaments. We make money not only when fans buy tickets to see their players play but also buy the games the players play as well as the team shirts they are wearing.

“But before viewers buy anything, we must push out stories of the individual players, as people love to know more them. It’s just like finding out more about your favourite basketball player before buying his sneakers,” adds Cheung.

China, Hong Kong/Macau, South Korea, Europe and the US are currently the biggest markets for e-sports. Players compete in these regions for world championships.

Despite the small geographical size of Hong Kong, it is huge commercially, Cheung says. “There was an indoor event last year in Hong Kong and tickets were sold out quickly. This summer, we’ll be seeing an outdoor ticket-selling event, which has never been done before and we expect bigger crowds.”

To explain the e-sports phenomenon, Cheung attributes to the shift of the gaming experience.

“The industry used to design and focus their games on individuals only but now, it is all about connection and vanity - players purchase in-games and weapons, and share their scores and looks to others instantly online.”

As far as piracy is concerned, Cheung does not see much infringement yet.

“For now, there is not much piracy concern for e-sports compared to the film and TV sector. However, we did hear some copycats trying to do something very similar to last year’s hottest mobile game, Clash Royale. Well, with about 35 million players daily, infringers [could not] resist copying the game.”

In spite of the optimism, David Allison, a partner at Bird & Bird warns that taking the e-sports content, monetizing and sharing it without the right owner’s approval is still a huge potential problem.

“For example, in Australia, there was a man doing a Facebook Live of a boxing match, which he shot live on his TV. While his re-broadcast attracted thousands of views within minutes, the TV channel called the guy and asked him to turn off immediately – I don’t know how they got his number, either – but he refused. The channel then contacted Facebook and the broadcast was shut down.”

Along with investments from the private sector, Hong Kong’s 2017-18 budget has just announced plans to further promote e-sports. 


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