The rise of esports as a spectator phenomenon

In October 1972 at Stanford University, the first known video game competition took place. A handpicked list of the best Spacewar! players at the school were invited to watch and compete, and the lucky winner would take home a subscription to Rolling Stone magazine.

Stanford was the location for the event because its Artificial Intelligence Lab was one of the few places with enough advanced hardware to run the game. According to event organizer Stewart Brand, very few people in the world even knew that they could play games on computers; the first Pong cabinet would not be installed until several weeks after the Spacewar! tournament.

For a game to become a sport, it needs three core components: competition, tournaments and spectators. Although it may have been unknown by the participants at the time, on that fateful day at Stanford University, the next great sports empire was born. By combining competitive elements of gaming with a fan base, the foundation was set for the nascent world of video games to one day achieve widespread spectatorship and popularity. In fact, esports are now on a fast track to becoming one of the most popular activities watched and played around the world within the next 10 years.

A new type of sports competition

From the inception of the video game industry, players have competed for high scores and bragging rights. When Atari hosted the Space Invaders Championship in 1980, more than 10,000 people gathered to sit at rows and rows of computers and zap aliens. Gaming competitions were popular enough by 1989 that a full-length feature film – The Wizard – was released. It was also a vehicle for launching a new game, Super Mario Bros 3.

As the growth of the internet enabled more connections around the world, gaming was an inevitable addition. The world changed again in 1988 when Netrek, the first team-based internet game (and third internet game overall), was introduced. By 1993, Netrek was attracting up to 5,000 players per day.

It was an entirely new gaming experience. Players no longer needed to track down a friend at the arcade to battle; their opponent could be on the other side of the world or in a house down the street. As hardware advanced, connections improved, and developers enabled gamers to talk to each other, online gaming started to boom.

This explosion was built upon the foundation of one of the great benefits of gaming: on-demand competition and interaction. As technology has caught up, it is also attracting on-demand spectators.

Growth of esports

Three core elements are contributing to the esports industry’s rise as the next major spectator sport: streamed competitions with organized leagues, professional players that can be viewed anywhere, and live events in major offline sports venues. If you want to see how this plays out in real time, there’s no better place to go than Twitch, where people from all over the world can tune in and watch gamers, or “streamers,” play video games.

If you aren’t a gamer you may be unfamiliar with Twitch, but as the largest livestreaming platform in the United States, it’s rapidly becoming a household name. Twitch has seen phenomenal growth over the past few years. In 2014, Amazon bought Twitch for nearly $1 billion, though some business analysts questioned the move. Today, Twitch has approximately 5 million active viewers who spend 106 minutes each day watching live gaming, which ranks higher than prime time cable TV networks like CNN. Overall, the global esports audience is projected to double in the next three years from 300 million to more than 600 million viewers – and by the end of this year, 1.6 billion people will have some knowledge of esports.

Although the audience for gaming content is predominantly found online, traditional television is also making a play for viewers. In 2016, both TBS and ESPN began investing in esports leagues and broadcasting competitions, and others have followed suit. The appeal of reaching those massive online audiences has TV executives jumping out of their seats.

Why? Games that began as two people huddled over the same vacuum tube screen, and then went global thanks to the rise of internet gaming, are now coming back to bring people together in person. People are consuming esports everywhere – together.

The future of sports is digital

Offline sports leagues like the NFL and NBA provide an intriguing analogy. Both were founded in the first half of the 20th century, but they only became revenue powerhouses in the late 1990s. Effectively, it took over 50 years to make something like the NFL the juggernaut it is today. By comparison, in just 46 years since Stanford’s Spacewar! competition, esports viewership is already comparable with the NFL and NBA.

Headline esports tournaments fill major stadiums and draw traveling audiences and media like any marquee offline sporting event. In 2014, Seoul’s Sangam Stadium – a venue used in the 2002 FIFA World Cup — hosted 45,000 in-person attendees to watch the League of Legends World Final. More than 27 million additional fans watched online. The 2017 League of Legends World Final in Beijing was viewed by 60 million people, up from 43 million the previous year.

However, even with impressive metrics and market achievements, the world of esports isn’t without controversy. With the rise in popularity come the same issues that have arrived in legacy sports, such as cheating, player exploitation, and even performance-enhancing drugs. In addition, esports have also opened the door to a new blend of disruption, with cyber attacks becoming more frequent along with overloaded servers and dropped connections. Plus, like with any engaging activity drawing the attention of an increasingly mainstream audience, esports can attract regulatory scrutiny — such as the World Health Organization recently adding a gaming disorder to the International Classification of Diseases.

Despite these growing pains, the popularity of esports shows no sign of slowing down. Look no further than the latest Global Games Market Report from market research Newzoo, which forecasts 2.3 billion players across the globe will spend a whopping $137.9 billion on games by the end of the year, up 13 percent from last year. There’s no question: despite some inevitable challenges ahead for esports, the category is clearly one to watch.

Andrew Paradise is the founder and CEO of mobile esports company Skillz.