A growing revenue opportunity
The Esports industry is a massive one, with revenues estimated to top $1.5 billion by 2023, new investments into the sector could yield significant earnings. It’s no mystery that gaming sports have become a new rage as millions play games like League of Legends, Fortnight, and more.
Along with game popularity also comes massive audiences who are willing to watch and bet on games with their favorite teams or players. The total viewership of Esports is expected to grow by 9% every year until 2023. That comes atop the already impressive audience of 454 million viewers worldwide to an eventual audience size of 646 million by 2023.
If you’re even halfway decent at math, you can see that a doubling of the audience size over several year periods, quite impressive. That also means understanding the landscape of Esports is vital if investors and others wish to pull out profits from this increasingly popular competitive gaming world.
The Tier System
While the Esports world is not governed by one official body, there are some authoritative figures among the bunch. Websites like “esports observer,” for instance, are well renowned in the community for their commentary and blazing the way towards more sports like recognition of the community.
Websites like these, therefore, have sought to establish a game tier system that aims to create a hierarchy in the Esports world. This tier system seeks to rank games according to several key metrics. The purpose of this is to establish which games are more popular and, therefore, profitable compared to others.
Establishing Criteria For The Tier System
One system proposed in 2017 by Jens Hilgers, a popular commentator in the Esports space, suggests there are three tiers. Jens first set up three criteria for each category.
Tier I, for instance, has a monthly viewership that equals more than 20 million hours watched. This alone is a useful metric for total viewership and resulting revenue from ad viewership. Tier, II, on the other hand, has much lower total hours watched per month at just two million hours. Tier III then comes in at less than 200,000 hours watched per month.
Along with the total hours watched per month, this tier system also accounts for the total prize pool or the money that can be won from tournaments throughout the year. Tier I requires an annual prize pool or $5 million or more. Tier II comes in at between $100,000 and $1 million. Meanwhile, the lowest tier, tier III, offers less than $100,000 in rewards.
The third criterion is defined as the number of “MAU’s” each game has. An MAU is simply someone who plays the game on a monthly basis. This is considered a useful metric for an active user base, considering it quires the gamer to come back and play several times per month.
Therefore, this metric measures the total potential user base of the game, to a degree. The reason this isn’t foolproof is that this data is not easy to access. No one officially publishes how many MAU their games have become. It isn’t easy to track.
Secondly, MAU’s represent a number of people who play the game often enough, but it does not take into account people who play offline, more sporadically, or may have an interest in watching Esports but not playing the game. This is similar to how millions of people watch American football, yet have no interest in playing it.
With that said, MAU is perhaps the best way to define the user base for games anyway. Tier I requires MAU’s at or above 8 million. This means 8 million monthly users or more. Tier II requires anywhere from above 500,000 MAU’s to just under 1.5 million. Tier II meanwhile requires any number up until about 500,000 MAU’s.
What Are The Top Esports Games
Now that the tier system is defined, where do games land in these ties? Tier I, as of the time of this writing, has only four games. Lease of Legends, Dota 2, Counter-Strike, and Hearthstone are all considered by being Tier I.
Keep in mind the previous metrics are only baselines. For example, Counter-Strike is reported to have somewhere around 24 million monthly users, and therefore a much more massive fanbase than the Tier I designation would suggest.
The tier system does categorize relative investment risk and reward quite well among the Esports games. For example, if a company wants to invest in advertisements during Esports competitions, then a Tier I designation is sure to appeal to an audience/fan base numbering in the millions. Yet, that also comes with a higher price tag.
Tier System and Esports
So, the ever-growing world of Esports stands to offer an exciting new opportunity for revenue and advertising. By using the Tier system, companies and investors can quickly decided how much risk and cost they’re willing to put up given certain levels of users among popular Esports games.
While the tier system isn’t perfect, it does represent the current best method of establishing the risk to reward factor.
Why Don’t Sports Games Make Good Esports
I want to point out why games like Madden, FIFA, and other sports video games are not considered Esports. The largest problem is to do with balance.
In Dota 2, for example, developers can quickly adjust charters’ skills and powers to make the game fairer. However, in games like Madden, certain players are matched with there real-world abilities. This means that no matter what, some characters in the game will always be better than others, therefore producing an unfair advantage in the competitive space.
Another reason is the gap that artificial intelligence produces. For instance, again in Dota 2, each player understands and can predict outcomes of inputs. In Madden and FIFA, however, article intelligence attempts to mimic real-world variables in which sometimes the same exact inputs produce different outputs.
This is also unfair and just plain weird in the competitive gaming world of eSports.
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