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This publication attempts to introduce the industry of eSports to the average person.
eSports is a growing industry, and it is my belief that it is currently positioned to make a radical impact to today's society - not only through the lens of entertainment and media - but many other ways society operates.
With increasing viewership, prize pools, and influence, eSports has evolved to more than just a game.
eSports- More Than Just a Game -
Prepared by Luc Ryu
Finalized: December 18, 2016
Despite being labelled as nothing more than a hobby for decades, video games, and their competitive setting of eSports have
finally started turning heads with their rapid growth in player base, influence, and viewership:
i. The largest prize pool in history recently eclipsed US$20.8M;
ii. A 17 year-old eSports player was recently listed in TIME Magazine as one of the world’s most influential teenagers;
iii. In 2016, more people viewed the grand finals of an eSports tournament than the clinching game of the World Series.
Analysts predict a $1.4B industry by 2020, but with the rapid pace of societal break-throughs occurring on a weekly basis, eSports
has the potential to be much more.
With the generation of Millennials ready to make their impact on society, eSports will soon break away from its stigma and
cement itself into today’s culture.
The objective of this publication is to highlight a number of recent key developments that are indicative of the
industry’s rising legitimacy, how the industry should be considered a disruptive force in today’s entertainment
media, and how the industry’s influence extends far past the computer screen.
eSports will be the next major source
of entertainment media.
*All figures in this report presented in USD unless otherwise noted.
Super Bowl NBA Finals MLB Finals NHL Finals Worlds (League of
2012 2013 2014 2015 2016 Traditional Sports
Viewership for traditional sports is
estimated by Nielsen. This does not
include foreign, or digital viewership. The
underlying methodology of estimation is
Methodology in estimating viewership for
eSports is unknown. Publishers simply
release a number months after the event.
Different publishers focus on different
metrics, making meaningful comparisons
difficult to make.
There are inherent difficulties in measuring viewership for both industries. Notwithstanding the prior,
the viewership of major eSports titles already rivals those of the major traditional sports. Such a large
base may be attractive to non-endemic brands who target groups with similar profiles as the average
Viewership is already beginning to
challenge traditional sports
2013 2014 2015 2016
Dota 2 Dota 2 - excl. TI League of Legends Counter-Strike: Global Offensive
While growth in annual prize pools across
the major titles appears to be decreasing,
the prize pool per event has increased. This
may suggest that forces are pushing away
less-polished events. Should this be the
case, it may further imply stability for event
organizers as market leaders begin to
eSports Superstars are Multi-
Millionaires from Prize Money Alone
Dota 2’s major tournament, The International (“TI”), had a total
prize pool of almost $20.8M in 2016, or 64.3% of the entire
available Dota 2 prize pool in the year.
DoB: Feb. 13, 1999 (17yo)
Name: Sumail Hassan
Career Winnings: $2.3M
Traditional Sports Team Across the
Globe are Taking Action
May 16Jan. 20
The entrance of traditional sports teams into the eSports space helps to establish legitimacy and has
received notable media coverage. More importantly, however, will be the introduction of industry best-
practices in the traditional sports world, with respect to infrastructure needs that help to facilitate safe
and sustainable competitive environments for players (e.g. the development of player unions).
Icons from Traditional Sports are
Seeing the Value
The entry of
icons help to further
attention on eSports.
In addition, the
advocacy from these
icons may help in
process of defining
eSports players as
“athletes” for the
purposes of obtaining
3x NBA Champion
Echo Fox(2000 – 2002)
Into NRG eSports
Jimmy Rollins *formerly Team Coast
(2005 – Present)
Media and Entertainment Leaders are
Already Investing into the Future
Market leaders in the entertainment and media industry are beginning to enter into the eSports space.
It is worth noting the connection that many of these corporations have to traditional sports, with
Turner Broadcasting also operating the digital experience for the NBA. The introduction of
broadcasting rights may provide motivation for more traditional sports teams to invest in eSports.
Partnering with WME/IMG, Turner
Broadcasting now operates one of the
largest Counter-Strike leagues in the world.
Matches are played live, at the Turner
Studios facility, and featured
matchups are aired on the TBS
channel. ELEAGUE is entering its
MLBAM is a spin-off of the MLB, and is
responsible for the digital experiences for
organizations such the NHL, and HBO.
MLBAM and Riot Games signed a $300M*
agreement with to develop the viewing
experience, and monetization and
commercialization of League of
*Agreement is for an average annual payment of $50M to 2023.
Through ESPN, Disney has broadcast a
number of high profile competitions such
as Heroes of the Dorm, The International,
and the League of Legends World
Championships. ESPN also has a
separate section on its website
and mobile app for eSports
Non-Endemic Brand Case Study:
ELEAGUE is a professional Counter-
Strike: Global Offensive league
started by Turner Broadcasting
System and WME | IMG in 2016.
In addition to producing live streams
on Twitch for the legacy audience,
they have began broadcasting key
matches on their TBS channel.
ELEAGUE has been given “Major” status by Counter-
Strike publishers, Valve, and will host the first Major* of
2017, with the finals played out on January 29.
Snickers is the official marketing partner of
ELEAGUE. They capitalize on their “You’re Not
You When You’re Hungry” tagline by acting as title
sponsors for blooper reels.
Arby’s is the official Quick Service Restaurant
partner of ELEAGUE. Their advertisements run
online and on cable broadcasts, and are
Sony Pictures was signed on with ELEAGUE for its
first season. Sony was the exclusive movie studio
With Millennials representing 54% of the eSports audience, western non-endemic brands are beginning
to transition into the eSports landscape to increase their brand awareness. Increasing viewership and
engagement numbers, coupled with the relative youth of eSports, help to position eSports as a cost-
efficient marketing channel for the time being.
* A Major is a tournament sponsored by Valve with prize pools of at least $1M. They also sometimes include
exclusive in-game content related to the tournament, including fantasy leagues.
Engagement of the Target Market at
the Collegiate Level
In an effort to engage the target market of Millennials, third-party organizers have joined game
publishers in creating eSports tournaments focused at the collegiate level, providing scholarships as
incentives. As the participation rates in eSports increases, a post-secondary institution’s openness to
eSports may drive enrolment rates, as prospective students look for ways to fund their own education.
Borrowing from established intercollegiate rivalries,
Riot Games partnered with the Big Ten Network to
produce The BTN Invitational – a head-to-head League
of Legends match between rival schools Ohio State
and Michigan State.
The Collegiate StarLeague is one of the premier
collegiate eSports leagues in North America. They have
partnered with Riot Games to host the 2017 uLoL
Campus Series – a collegiate League of Legends
UBC’s six-member League of Legends team
won $180,000 in scholarships for placing
first in the 2016 uLoL Campus Series.
Tespa is a network of over 190 chapters across North
American schools. In 2016, Tespa partnered with
Blizzard Entertainment to host Heroes of the Dorm, an
intercollegiate Heroes of the Storm tournament.
The grand finals of Heroes of the Dorm were televised
on ESPN2. Each starting player on the winning team
from Arizona State won $75,000 in scholarships.
Transactions in the Industry Provide
Preliminary Valuation Points
Despite the relative opacity of the industry, a number of precedent transactions help in establishing
preliminary price points for different types of organizations. Although valuations appear to be trending
upwards, there are legitimate concerns for a bubble harboured on an eventual plateau of growth, and
current lack of bottom-line profitability for many teams and organizations.
League of Legends Spot Purchases
The relegation format of the League of Legends Championship Series (“LCS”) makes
participation in the top division valuable. The following are transactions for the right to
play in any League of Legends league. These do not include the value of teams, their
brands, or any of their goodwill unless otherwise noted.
Purchaser Target Transaction
Rick Fox Team Gravity Dec. 18, 2015 North America;
FC Schalke 04 Team Elements May 7, 2016 Europe;
Team Huma Oct. 20, 2016 Europe;
Wesley Edens Cloud9
Dec. 9 , 2016 North America;
The following is an
estimate of the value of
an established eSports
team playing only in the
North American LCS. The
following uses an overly
basic asset approach
anchored on reported
Asset Notes Low High
LCS Spot  $1,800,000 $3,600,000
Brand  $5,000,000 $15,000,000
Roster  $700,000 $787,500
Total $7,500,000 $19,387,500
 High end assumes an LCS spot would be valued at 2.0x a 2nd Division spot.
 Source. High end assumes the 5th player would be paid 50.0% of the average $175,000 per player.
• The extreme opacity of the industry makes market-based valuations difficult.
• There is a large discrepancy between European and North American 2nd Divisions.
• Riot Games’ new initiatives in supporting teams, and the potential of the MLBAM deal
may explain the increase in North American spots.
Introduction: eSports will be the next major source of entertainment media.
SuperData – eSports the 2016 Report
Slide 1: Viewership is already beginning to challenge traditional sports
Slide 2: eSports Superstars are Multi-Millionaires from Prize Money Alone
Slide 3: Traditional Sports Team Across the Globe are Taking Action
Slide 4: Icons from Traditional Sports are Seeing the Value
Slide 5: Media and Entertainment Leaders are Already Investing into the Future
Slide 6: Non-Endemic Brand Case Study: ELEAGUE
Slide 7: Engagement of the Target Market at the Collegiate Level
Slide 8: Transactions in the Industry Provide Preliminary Valuation Points