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Esports will not replace real-world sport, but its growth could still be a boon for both markets

Published: 14:05 23 Sep 2020 BST

Gfinity PLC - Esports will not replace real-world sport, but its growth could still be a boon for both markets

Earlier this year, the coronavirus pandemic and lockdown measures around the world slammed the brakes on most live sport, with football matches, motor racing and other events postponed as the world battled the infection.

During the period, esports events stepped in to fill part of the void created by the absence, with esports media group Gfinity PLC (LON:GFIN) partnering with Formula 1 to host the F1 Esports Virtual Grand Prix, a series created to enable fans to watch Formula 1 races virtually using the F1 video game franchise.

The expansion of virtual motorsport, where contestants race cars in a video game format instead of actual cars, has continued apace, with Gfinity announcing in June that it has also signed a deal with Abu Dhabi Motorsport Management, for a new virtual racing contest, the V10 R-League, which premiered on September 7.

READ: Gfinity agrees distribution rights for new V10 R-League

With other real-world sports seeing video-game based equivalents appearing, such as the ePremier League esports football tournament, and the pace of growth of the esports market (it is expected to grow to US$6.82bn (£5.45bn) by 2027), could virtual sports eventually eclipse real-life sport in terms of popularity?

Cooperation not competition

Paul Kent, Gfinity’s head of esports and competitive gaming, doesn’t think so. However, he said that esports is not aiming to replace real-world sports, but rather serve as a complementary offering that can help both markets draw in new customers.

Speaking to Proactive, Kent said that he did not see a situation where games such as football simulator FIFA became more popular than real-world football leagues, however, he said this is not the intention and that esports offer an alternative form of competitive entertainment that may attract those less interested in real-world sport, particularly the coveted youth market.

“Kids and young adults these days might get into gaming and then watch competitive esports which then could lead them to get interested in real-world sport”, he said.

However, Kent also said that not all sports will have the same effect when compared to their esports counterparts, with virtual motorsport offering a more interesting avenue for Gfinity and other esports media groups as the experience of racing is much harder to replicate among the public, in contrast to more easily accessible sports such as football.

“The lines are blurred between real-world and virtual motorsport during the pandemic”, Kent said, saying that growth of interest in digital motorsport accelerated during lockdown when races were cancelled.

“It [virtual motorsport] will never replicate the actual experience but it is very close” the esports head continued, adding that one of the advantages of virtual racing was that it allowed other sports stars and celebrities to participate aside from professional drivers, widening the appeal and potential audience base for any broadcasts.

He also said esports events can serve as “short sharp bursts” of entertainment that audiences have to invest less time into than a full event, potentially drawing in more interest.

“I don’t think it is ever going to replace real sport in a like-for-like manner, but I do think it will act as a supplement and appeal to demographics that traditional sports no longer do”

Bookies get in on the act

Perhaps another sign of the growing popularity of esports is the parallel rise of wagering on events and tournaments in the markets, with companies such as Esports Entertainment Group Inc (NASDAQ:GMBL) offering wagering services on esports events.

Kent said this is not a new development, with many popular esports games such as Counter-Strike having built their popularity through the wagering of in-game rewards, although an unregulated money betting market did exist in the early days.

The difference now, he said, is the emergence of regulation and established players. “We are seeing [esports betting] emerge in a more professional manner, with traditional bookmakers and household name companies start to take an interest”.

The fact that mainstream bookies are taking an interest is once again a sign of the sector’s money-making potential, as well as its popularity among the sought after young adult market.

“It validates the credibility of esports and the teams that compete in the tournaments”, Kent said.

The future is freemium

In more recent times, there has been a rise in popularity of ‘freemium’ games in the sector, which have very little or no upfront cost to play and then make money on in-game ‘microtransactions’ for weapon skins, character outfits or other cosmetic and gameplay items. One example of the freemium model is competitive shooter Fortnite, which since its release in 2017 has seen its popularity explode and as of March 2019 had around 250mln players, a number that has likely continued to balloon since then.

Such popularity and ease of access has resulted in the game becoming a key component of the esports genre and can be seen as a symptom of freemium games eclipsing their standard priced counterparts in the market.

However, Kent said the freemium model is a return to form for esports games and arguably the key ingredient to succeeding in the sector.

He highlights Quake, one of the first esports-like games that helped popularise online multiplayer in the late 1990s, as well as League of Legends which was free to play initially with microtransactions added.

“Esports became massive in the late-2000s, we saw publishers move into that space and now things have come full circle…with games like Apex Legends free to play from day one with a freemium model…For esports to be successful, it needs to have a massive audience, and once you have that audience you can monetise it in a number of different ways”.

He also said that games that are free at outset also allow communities to form around them, another key component for success in esports.

“People will happily pay money to lock themselves away in a [video game] adventure…but if you want people to go and play with other and build a community, that is a different model and one that I think we are seeing in esports again”, he concluded.

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