Digital entertainment, broadly recognized as any entertainment consumed through a digital display is experiencing a shift in its delivery and consumption methods. Today consumers primarily use computers, smart phones, virtual reality headsets, even watches to experience digital entertainment versus television and movie theater screens. With our everyday life so connected to everyone and everything, small screen digital entertainment is rapidly replacing physical entertainment, and video games may be the leading indicator of this shift. Video games, an insanely popular pastime for millennials, has been at the center of digital entertainment for almost 50 years. But eSports (competitive video game play), a relatively new phenomenon, is leading the next generation of digital entertainment, and with it, ushering in a massively lucrative business enterprise.
eSports has long been thought as an international phenomenon, but with multi-million dollar tournament pool prizes, a large & extremely engaged audience and high profile celebrities investing big money in eSports, this pastime is on the cusp of becoming the next billion dollar industry in the U.S. From enthusiasts to professional investors, everyone in the U.S. wants to learn more about eSports & how the digital entertainment industry is being organized. We take a look at the history of eSports & how its future is being shaped in the United States.
What is eSports?
Electronic sports, or most commonly known as eSports, is a relatively new & exciting genre of competitive games in which professional teams play for prize money. Besides the participating teams, the owners & organizers of different eSports leagues generate significant revenue. Opportunities such as team representation, merchandising and broadcasting rights are all investment verticals within eSports.
eSports games are unlike the other story based console games where you have to follow the story line and guides to achieve the final goal. Rather than consoles games, eSports games involve a competitive environment in which every player in the team has to show their maximum team effort to win the tournament.
Not only the team effort, the individual skill level, reflexes, coordination, and communication level of each player matters a lot in the most popular eSports games.
There are various genres in which eSports games have been divided, such as First-Person Shooter, Multiplayer Online Battle Arena, and Real-time Strategy, among others. For all of these games, there are multiple teams which are being sponsored by different organizations & brands from across the globe.
eSports industry in the United States
If someone is even a slight follower of the professional gaming industry, he/she knows that over the past few years, the popularity of eSports has erupted. Currently, the eSports industry has millions of online followers and thousands of professional gamers. The popularity is undeniable with a single eSports event in 2016 drawing more unique viewers than the NBA finals, and only second to the Super Bowl for the most watched sporting event. In a very short period of time, the industry has flourished by leaps and bounds. In Particular in the United States, pro-gaming is being considered as a legitimate career as twenty thousand seat arenas are being sold out for eSports tournaments. Some areas of the country have embraced eSports and are working to develop a more structured platform that will open they path to huge investment dollars. Cities leading the way in this eSports industry buildout include Las Vegas, Los Angeles, Austin & Frisco TX, Denver, Seattle & Atlanta.
Competitive Gaming in a Thing, who knew?
The trend of professional gaming has been there for quite some time as players began to receive pretty substantial tournament purses in the late 1990’s. However, it was 2010 when the value eSports industry increased significantly, in part due to the release of video games such as Star Craft II. Considered an absolute home run in the industry, Star Craft II released by Blizzard Entertainment, paved the way for eSports as a spectator sport. This ultimately laid the foundation for today’s multi-million dollar eSports industry.
In the U.S., MLG or Major League Gaming is among the pioneers of the eSports industry. The company has established as one of the more formidable presence in digital entertainment & is a recognized brand in the world of eSports.
History of MLG
Through live and online events, in the past 10 years or so, MLG has expanded its footprint within eSports. They have distributed hundreds of thousands of dollars as the prize pools. They are considered by many as the gold standard inside the gaming world and the most reputable organizations involved in eSports. MLG was first televised in North America in 2006 on the USA Network with “Halo 2”. In 2011, the four MLG Pro Circuit Championship had 3.5 million viewers from all around the globe. While in 2012, the same event had over 11.7 million unique viewers, which shows a gigantic 334% boost in viewership in a time period of only six years.
These big figures, without any doubt, are mind blowing. However, this spectacular rise can’t be attributed to MLG alone. During the same time period, large tournaments and leagues began to form and also contributed towards the growth of eSports in the United States.
EVO, The Evolution Championship Series has hosted a large number of fighting game tournaments. EVO is a well-known franchise in the eSports industry. In 2015, one of the events hosted by EVO had a record-breaking 4.7 million unique online viewers.
Across the industry in the U.S., video game developers and owners of eSports titles have collaborated with organizations like EVO and MLG for hosting of events, formation of leagues, and execution of eSports tournaments.
League of Legends is a massively popular free-to-play game (MOBA) developed by Riot Games. They have hosted their own competitions over the years, in which The League Championship Series has become one of the most coveted tournament invites. Unlike other developers, Riot protects its own players. They offer a decent salary to each team competing in the LCS. This strategy is great to encourage gamers to focus on the game, and treats them as very well payed team members.
League of Legends in the United States
By proving that the League of Legends is a legitimate sport to the U.S. government, Riot has exhibited many examples of some of the biggest tournaments in the history of eSports gaming. The professional eSports players are now recognized as pro-athletes and the U.S. government has taken responsibility to provide the visas to the international eSports players so that they can compete in U.S. based eSports tournaments. Much of the credit goes to the video game developers for leading the way in standardization of the eSports industry in the U.S.
Riot & Los Angeles
The Staples Center in Los Angeles has hosted the LCS Championship multiple times. Staples is the same arena that the two Los Angeles based National Basketball Association teams play their home games which demonstrates the level of credibility the eSports competitions receive. The Center has hosted players from various nations and countries from around the globe and has awarded millions of dollars in tournament prize money.
Valve & Seattle
Valve, the developer of the highly successful free-to-play MOBA, Dota 2, hosts their biggest event of the year, The International in Seattle. The International features the biggest prize pool in the history of not only eSports but other traditional sports as well. In 2016, the sixth edition of The International, had the final prize pool of $20,770,460, making it the largest prize pool in the history of eSports gaming.
Streaming Platforms and USA Casters
Aside from these multi-national and multi-million dollar competitions, the growth of the eSports in the United States can be attributed to the origin of video games streaming platforms like Twitch and YouTube Gaming.
Many gamers stream their game play through twitch and also collect advertising revenue for the broadcast. Twitch streaming, which has become massively popular, has expanded to an IRL (in real life) section of the platform where interested viewers can get a glimpse into the real lives of eSports gamers. Twitch boasts a viewership of 10 million viewers each month and is in heavy competition with Youtube & Facebook for rights to the most popular game broadcasters as known as Influencers.
Thanks to the online platforms like, YouTube and Twitch, eSports casters or broadcasters have seen a tremendous rise. They happen to offer in-depth analysis and guide the online audience through each eSports competition just like professional sports broadcasters you would hear covering an NBA, NHL or NFL game.
One of the most famous examples is the Dota 2, North American based caster, Nebtune. He brings in thousands of people to his Twitch channel every time he streams. Anyone, ranging from, amateurs to casters and professional players can stream on Twitch since it is free and easy to use platform. Nebtune is one half of a dynamic casting duo known as the Brown Battalion. The eSports casters gained significant media recognition after winning a competition called “So You Think You Can Cast”.
What is Cosplaying?
Cosplaying is an art in which the people partaking in it, known to be as Cosplayers, wear costumes to role-play as individual inspiring characters. Modern inspirations for cosplay are movies, comics, and anime and last but not the least, video games.
Cosplaying comes in a range from throwing a bed sheet over your shoulder to the accurate representations of the source materials and fabrications. Cosplay contests have become a significant part of these eSports tournaments along with networking & business expo, BYOC Lan parties and the competition themselves being the primary attractions.
Cosplayers and Digital Entertainment
Lindsay Elyse is one of the known world’s few full-time Cosplayers hailing from North America, with over one million Facebook fans, 99k Twitter followers, and more than 100k Twitch followers.
Amie Lynn is a third-year journalism student at the University of Arizona. At the same time, she is a part-time professional Cosplayer to help to fund her education.
Both generate income through modeling work, getting paid to promote vendors’ booths and selling prints of themselves to fans, which ultimately contribute towards the advertising revenue. New Cosplay platforms have launched to support the growing demand to organize the community around eSports events.
NBA launches eSports League
The National Basketball Association (NBA) recently announced that the organization will launch a professional eSports league. The initial NBA eSports season will debut in 2018 with about half of the leagues teams participating at launch. The NBA has the largest Millennial audience as well as the largest International audience, so it seems that its digital entertainment expansion with the NBA eSports league will be well received by its core consumers. The NBA eSports league will be called the “NBA 2K eLeague”.
Take-Two Interactive will be the partner of the NBA which will power the organization’s dream to reality. Take-Two Interactive is the developer behind the “NBA 2K”, the immensely popular gaming series of the NBA. The partnership with Take Two will enable the NBA to be the first of the major professional sports leagues in the United States to operate an eSports league. The Professional Futsal League of the United States is also looking to launch an eSports league as futsal is a very popular sport among gamers.
The NBA franchises will be responsible for the management of player rosters and organization of NBA eLeague team events.
The gaming league will follow the steps of the real-life NBA franchise. The process of forming a team of 5 players will involve recruitment through virtual try-outs, which will filter out the best players to be qualified for the first draft. From there, the teams will follow an 82-game schedule leading to playoffs and a championship.
NBA leads Expansion of Digital Entertainment
This investment in the world of eSports could be the sight of big things to come for the NBA franchise on the global scale. The NBA, flush with capital from its 2015 deal with broadcast networks may be picking the absolute best timing to venture into eSports. NBA organizations have profited an estimated $4B since 2015.
In eSports, similar numbers could be seen, as statistically there was a growth of 51% in the revenues of eSports in 2016 which in terms of cash were approximately $500 million. With the current pace, in 2019, the industry will break the $1billion mark.
Adam Silver, the commissioner of NBA and also the man whose virtual avatar will hand out the trophy to the winner of the eLeague said “We believe we have a unique opportunity to develop something truly special for our fans and the young and growing eSports community.”
This is definitely a step in the right direction for NBA 2K. Instead of trying to create a new IP geared towards eSports competitive play, like Battleborn or Evolve, they are using a game with an established user base. The NBA eSports league, if successful, would serve as a model for all major professional sports in the U.S. to follow.
The Future of eSports in the U.S.
So, to sum it all up, the surge of eSports has been tremendous in the United States over the last decade and looks to continue growing at a significant rate for the foreseeable future. The popularity of eSports can be attributed to the growing population of consumers of digital entertainment and the love & dedication gamers, amateur and professional, have with eSports titles such as Counter Strike, League of Legends and DOTA2. Auxiliary pieces to the industry such as the commentators/casters and the cosplayers to help to bring excitement to the rapidly expanding eSports community.
It might sound all fun and games but pro-gaming is a fiercely competitive business and very expensive to get into if you are thinking of team ownership. To compete with the best of the industry, each player should spend countless hours to work, not only on themselves in skill development, but also on perfecting their platform strategies, including merchandising, broadcast rights and branding partnerships. There are eSports consultants and eSports business experts that support the management, representation and platform building of eSports teams & businesses.
Entrepreneurs looking to break into eSports should determine which vertical to pursue as not to fail from opportunity overload. Whether you are in the United States or anywhere, you have to organize a solid business model and product roadmap to launch an eSports brand. Since the eSports industry is constantly evolving, it takes significant determination and expertise to make it big as a caster, team owner or eSports player. But if you can find a niche area to grow within the eSports industry, you may be in for the ride of your life as we are only at the beginning of the eSports and digital entertainment expansion in the United States.