Publication: May 2022
Short link to this post: https://bit.ly/3Ffp13p
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Authors: Esports Research Network: Tobias M. SCHOLZ, Nepomuk NOTHELFER

Executive summary
Key findings
  • Modern esports is about 25 years old and therefore relatively young.
  • The descriptive esports definition has three fundamental elements: (1) a human element, as in players, (2) a digital element, as in video games, and finally (3) a competitive element. The key characteristics of esports are based on these elements.
  • Esports is an independent product of digitalisation with its own principles and rules. It is a cross-sectional topic that ranges from gaming to entertainment and media, culture and art, education, business and talent, diversity and inclusion, and sports.
  • Esports is not a single, homogeneous ecosystem but is highly heterogeneous (in terms of the content of video games, the way they are played and the publisher’s strategy behind each ecosystem) and therefore has few universal industry standards.
  • The question if esports is sports is insufficient as it lacks a necessary frame of reference. Due to their broad scopes, both terms overlap. Therefore, a terminological/legal separation is needed. This can only be achieved by explicitly excluding video games from sports.
  • A market analysis of the European esports industry is complex as the data is highly heterogenic. However, it is evidenced that the market is growing, and that the government funding is currently inconsistent and effectively insufficient.
  • Esports represents opportunities and challenges for the European society.
  • To develop a suitable strategy in this volatile and fast paced industry, an ongoing examination of the phenomenon in detail is required to ensure appropriate adjustments to the strategy.
  • The esports industry is constantly growing and rapidly evolving. Therefore, it is necessary to address challenges as soon as possible.

Esports is an independent product of digitalisation with its own principles and rules. The industry is highly heterogeneous (in terms of the content of video games, the way they are played and the publisher’s strategy behind each ecosystem) and therefore has few universal industry standards. Thus, esports is not a single, homogeneous ecosystem. Although the initial situation and the decisive roles are often very similar, the details of the structure depend on the strategy of the respective publisher. Esports athletes participate in competitions directly (in game or in an external setting) or as employees/contractors of a club (or “clan”, “guild”, etc.). Those tournaments are either organised by the publisher or with the publisher’s permission (or unpaid toleration) by third party providers. The publisher’s different philosophies range from micro-managing every aspect of the ecosystem to being completely absent. Federations are currently primarily lobbying groups.

Modern esports is about 25 years old. The industry is therefore relatively young and is constantly and rapidly developing due to technological progress. A market analysis of the European esports industry is complex as the data is highly heterogenic. However, it is evidenced that the industry is growing.

There is an ongoing debate regarding the definition of esports. The definition of a phenomenon depends on what the defined term is to be distinguished from. It is recommended to form a so-called descriptive term that contains the fundamental characteristics of the phenomenon. For esports, these are: (1) a human element, as in players, in order to differentiate from machines or artificial intelligence, (2) a digital element, as in video games, in order to differentiate from analogue types of competition, and finally (3) a competitive element in order to differentiate from non-competitive gaming. Superficially, the digital aspect can be separated into hardware and software. On both levels, there is a great heterogeneity. Esports is not only about sitting in front of a digital device but can require full-body movement as well. Competition is about comparing mental and/or physical performance. Video games based predominantly on luck or external factors cannot be considered esports as there is no comparison of performance.

The question of whether esports is sports is insufficient as it lacks a necessary frame of reference. Due to their broad scopes, both terms overlap. In addition, both industries have their own rules and simply replicating existing sport systems is potentially damaging for the development of both industries. Therefore, a terminological and legal separation of sports and esports is necessary. This can only be achieved by explicitly excluding video games from traditional sports. In comparison, esports is more international and more heterogeneous than traditional sports while having less industry standards and being equally dependent on external funding (although traditional sports are much more subsidised by the state).

Notably, esports can be more than just competition for its own sake (e.g. gaming, entertainment and media, art and culture, education, business, diversity and inclusion, as well as sports). Furthermore, esports is part of the platform economy and can be used as a tool for employer branding, talent acquisition, or as an internal innovation driver. Esports is both global and local with the potential to act as a medium for communication, the revitalisation of cities, bridging borders, and educating young and old. Similar to traditional sports, esports is a platform for learning and engaging in positive social values such as fairness/fair play, willingness to perform, and teamwork. The skills needed in esports are required for digital work as well, such as creativity, focus on performance, motivation in the face of a challenge, strategic thinking, reaction speed, focus, working memory, visual and (English) language skills as well as teamwork. Large parts of esports offer great potential for inclusion with assumably less barriers such as physical characteristics and identity than in traditional sport. Consequently, esports can be an object of study and a test laboratory to explore digital or hybrid societies and a digital European identity.

On the other hand, esports poses challenges such as the stigma against women, precautions against cheating, the discrepancy between the publisher’s control and the use of its product as a contribution to society as well as environmental sustainability. If esports is to be promoted and utilised, society needs to be educated on the topic as there is still widespread stigmatisation associated with it. Without support in legitimation the divide between the industry and society will grow. For a suitable strategy in this volatile and fast-moving environment, a constant examination of the phenomenon in detail as well as constant adjustments to the strategy are required. As esports is constantly and rapidly evolving, it is necessary to address these and future challenges as soon as possible.

Link to the full study: https://bit.ly/699-635

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