ESports Venues A New Sport Business Oppo
ESports Venues A New Sport Business Oppo
ESports Venues A New Sport Business Oppo
eSports Venues
A New Sport Business Opportunity
Seth E. Jenny
Margaret C. Keiper
Blake J. Taylor
Dylan P. Williams
Joey Gawrysiak
R. Douglas Manning
Patrick M. Tutka
Abstract
Typically played via the Internet, eSports (organized competitive video gaming)
is becoming a global phenomenon. The popularity of video games and the
desire to spectate online and in-person gaming has amplified as Internet-based
gaming has improved. eSports competitions are hosted all around the world,
but particularly in the United States, Europe, and Asia. While eSports-specific
venues are increasingly being built, many venues that host eSports competitions
were constructed primarily for other professional sports or entertainment. These
entertainment facilities must attract popular financially beneficial events in
order to survive. eSports events have great potential to fit this mold. This paper
briefly describes the development of eSports as well as discusses the current
trends in eSports spectator consumption. Moreover, current and future eSports
venues are described, highlighting potential licensing, equipment, and personnel
requirements needed for hosting eSports events. Open systems theory is utilized
to capture and explain the draw of hosting eSports events and how facilities must
adapt to their changing environment.
Keywords: e-Sports, video gaming, electronic sports, sport venues, facilities
Seth E. Jenny is a professor in the Department of Public Health and Social Work at Slippery
Rock University of Pennsylvania.
Margaret C. Keiper is an assistant professor in the School of Management at the University of
Alaska-Fairbanks.
Blake J. Taylor is an instructor in the Department of Physical Education, Sport & Human
Performance at Winthrop University.
Dylan P. Williams is an assistant professor in the Department of Kinesiology at the University
of Alabama.
Joey Gawrysiak is the chair of the Management Science Division, Harry F. Byrd, Jr. School of
Business at Shenandoah University.
R. Douglas Manning is the dean of Kinesiology and Athletics at Santa Ana College.
Patrick M. Tutka is an assistant professor of Sport Management at Niagara University.
Please send correspondence to dr.sethjenny@gmail.com
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Jenny et al.
Introduction
eSports, or electronic sports, are organized video game competitions and
this enterprise has become a world-wide sensation (Jenny, Manning, Keiper, &
Olrich, 2016). In 2014, 205 million people watched or played eSports (Casselman,
2015). However, eSports did not always have the popularity it is now receiving.
As Internet-based gaming improved, so did the popularity of video games and
the desire to spectate gaming online and in person. For example, the 2016 League
of Legends (LoL) World Championship—the most popular eSports tournament—
attracted 21,000 live spectators, was broadcasted by over 23 entities in 18 languages,
and garnered 47.7 million unique viewers with a peak concurrent viewership of
14.7 million people (Kresse, 2016a). Moreover, eSports attracts over $500 million
in sponsorships annually, including heavyweights Coca-Cola, Red Bull, Intel, and
Nissan (Casselman, 2015). Furthermore, beyond collegiate club sports, 42 U.S.
colleges and universities are members of the National Association of Collegiate
eSports (NACE, 2017) which recognize “varsity” eSports teams—many of whom
are supported by the athletic department and offer scholarships for these “student-
athletes.”
eSports fit into the model of “nontraditional” sports along with other activities
that utilize technology to remove the participant from direct action (e.g., Drone
Racing League), that are on the rise in popularity, and offer a contrast to traditional
sports (e.g., baseball, football, basketball, etc.) (Gawrysiak, 2016). Similar to the
differing types of traditional sports, there are varying genres of eSports games,
including first-person shooter (FPS), multiple online battle arena (MOBA),
fighting, real-time strategy, and sport video games. Video games such as Star Craft
2, Counter-Strike: Global Offensive, Defense of the Ancients (DOTA) 2, and LoL are
the most popular games within eSports (Moth, 2014).
With the help of ESPN and other broadcasting companies, along with Internet
streaming, the viewership in eSports is comparable to many traditional sports
(Grubb, 2015). Aside from online streaming, millions of fans attend professional
eSports competitions in varying venues (Keiper, Manning, Jenny, Olrich, & Croft,
2017). These events involve eSports players arranged center stage in front of
desktop computer stations where the action is broadcast live via massive stadium
screens (e.g., Jumbotron) within the venue. eSports competitions are hosted
all around the globe, but primarily in large United States (U.S.) cities, Western
Europe, China, and South Korea. Many venues that host eSports were constructed
primarily for other professional sports or entertainment, but new venues have
or are currently being built specifically for eSports (e.g., Esports Arena, 2017b;
Millennial Esports Arena, Akers, 2017).
The purpose of this paper is to apply open systems theory to capture and explain
how facilities are adapting or being created to attract eSports events. This paper
provides a brief overview of the developing popularity of eSports, highlighting
the revenue possibilities and sport spectator consumption regarding hosting
35
eSport Venues
eSports events. Moreover, current and future eSports venues will be presented,
while briefly discussing the necessary licensing, equipment, and personnel needs
for hosting eSports.
extended the gap between the skilled and competitive gamer from the recreational
novice, while novice video gamers’ desire to watch elite video gamers perform
surged. Today, global eSports awareness has reached 1.3 billion people (up
15% from 2016), including 191 million eSports “enthusiasts” and 194 million
“occasional viewers” (Newzoo, 2017). Moreover, according to the Entertainment
Software Association (ESA, 2016), at least one person plays video games at least
three hours or more per week in 63% of U.S. households, with the average gamer
being 35 years old (41% female). Therefore, the industry of video gaming has
become a global multibillion-dollar industry. From 2006 to 2015, U.S retail sales
of video and computer games increased from $7.3 to $16.5 billion (ESA, 2016). As
consumers spend, event management and marketing opportunities thrive.
In 2016, 424 worldwide eSports events were held with prize purses greater
than $5,000, where combined prize purses totaled $93.3 million—over a 50%
increase from 2015 (Newzoo, 2017). The largest eSports tournament prize purse
is found at The International (Valve Corporation, 2016), which lists the current
prize pool at $20.7 million. With the continued rise in prize purses, Sallomi
and Lee (2016) predicted eSports will reach $1.2 billion in revenue in 2018. As
such, sponsors have taken notice and have begun to invest millions of dollars in
sponsoring eSports teams, events, and tournaments often held at non-eSports-
specific venues. For instance, Hyundai, Gillette, 5-Hour Energy, and Dell have all
partnered with differing eSports tournaments, leagues, or teams in order to gain
footing in the eSports industry (ENPE Media, 2016).
As introduced earlier in this paper, in open systems theory, an organization’s
responsiveness to environmental change becomes vital for success (Homburg,
Grozdanovic, & Klarmann, 2007). One of the key groups within an organization’s
environment that can influence the need for organizational change are consumers
(White, Varadarajan, & Dacin, 2003). In the sports event and facility world, the
value of consumers or spectators is clear. Spectators are what drives revenue for a
facility. Conclusively, sports facilities look to attract events that have the capabilities
to attract a large number of spectators, hence the appeal of eSports.
Watching eSports has become a stronger phenomenon than playing the games
themselves (Hamari & Sjöblom, 2017; Shaw, 2013). Newzoo (2017) revealed that
42% of eSports viewers (most commonly streamed through the Internet) do not
actually play the game they watch. These spectators may only watch because
they may not have the same skills necessary to compete at such a high level, but
appreciate watching such talented players. This rationale highlights how eSports
spectatorship has moved beyond just video game players and shares similarities
with other sporting events like the Super Bowl or World Cup where many spectators
watch, but do not regularly play American football or soccer, respectively.
Karakus (2015) noted over 250,000 people streamed online LoL regular season
matches worldwide and over 27 million people watched the LoL finals—9 million
more than the 18 million viewers of the 2014 NBA finals. Moreover, 14% of North
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eSport Venues
Americans aged 21 to 35 years watch eSports at least once a month, while 18%
of this group watch this amount of ice hockey—a comparable statistic (Newzoo,
2017). Headset microphones give eSports players the ability to communicate
with one another as the spectators listen, allowing fans to easily hear mid-game
player comments similar to NASCAR drivers and pit crews during races (Hamari
& Sjöblom, 2017). Twitch (2017), YouTube Gaming (2017), and Ustream (IBM,
2017) are commonly used live and recorded eSports online streaming platforms.
eSports is also shown on television with live commentating similar to
traditional sports. For example, Turner Sports broadcasts ELeague, a professional
Counter Strike: Global Offensive league featuring 24 teams from across the world
on TBS (Putterman, 2016). ELeague has achieved solid ratings, averaging 271,000
viewers across live and time-shifted viewing. However, spectators attending live
eSports events are becoming more common. Lee and Schoenstedt (2011) noted
while traditional sport fandom may involve spectatorship at live events, the culture
of eSports consumption appears to primarily be an online endeavor. However, the
opportunity to explore live eSports events in sports stadia appears to be gaining
traction.
While there is little empirical data on why eSports fans would consider
watching eSports at a live event rather than via the Internet, there have been studies
investigating the motivations of consuming eSports compared to traditional sports
(e.g., Hamilton, Garretson, & Kerne, 2014; Karakus, 2015). Data shows that social
interaction is one of the main contributors to eSport consumption (Brenda, 2017;
Hamari & Sjöblom, 2017). Watching a live eSports event also gives the fan a means
of escape from reality, the drama of a sporting event, and the realized fantasy
of seeing their favorite players up close. Moreover, similar to National Football
League (NFL) fans wearing the uniform of their favorite player, many eSports
fans arrive at events dressed up as their favorite video game character—coined
“cosplay” (i.e., costume play). While these characteristics are similar to traditional
sports, eSports may be unique due to their often intimate venues, technological
access to interact with others through live chatting and message boards, and often
fan organized cosplayer showcases (Brenda, 2017).
“Vicarious achievement, acquisition of knowledge, aesthetics, social
interaction, drama/excitement, escape (relaxing), family, physical attractiveness
of participants, and quality of physical skill of the participant” (Trail, Anderson,
& Fink, 2000, p. 157) are common motives for sport consumption based on
social and psychological needs. Other factors that may affect fans’ motivations
to consume sport in person include gender, sport, stadium, and host of other
influences related to budget, time, and/or personal interests (Wann, 1995; Wann,
Grieve, Zapalac, & Pease, 2008). Clearly, fans may have different motivations for
consuming sport in-person.
While traditional sports still depend on ticket revenue, multibillion-dollar
media contracts have diminished the consequence of sold-out stadiums as the
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Jenny et al.
Hosting eSports
eSports stadium attendance has seen substantial growth over the last few
years. For example, 173,000 people attended a two-weekend tournament in
Poland in 2016, up from 113,000 in 2015 (Elder, 2017). In 2015, seven venues had
crowds over 13,000 for a single eSports event, with five having over 20,000 (Kresse,
2016b). Certainly, these types of attendance figures have encouraged more venue
managers to have interest in hosting eSports events. However, the challenge for
many non-eSport-specific venues is providing the necessary infrastructure to
make eSports work (Hill, 2013). Fortunately, much of the needed technology
requirements needed to host eSports events are already included at major venues
due to pressure from traditional sports teams and other organizations that the
venue hosts (Maddox, 2016). The modern stadium provides many amenities
that fans find attractive, from the beauty of the stadium itself, to comfort, access,
scoreboard quality, and the ease of the layout (Tutka, 2016). Several venues that
solely host eSports events already exist.
The following sections introduce three approaches or areas that sports venues
can respond, or have responded, to the changing event environment. Equipment
and personnel needed to host eSports events, adapting existing facilities, and
creating new eSport-specific facilities are all covered. All three topics covered are
various ways organizations have responded to the external environment within
sports events and facilities that now includes eSports.
participants, and large-scale monitors for the audience to see the in-game action.
The type of video game played within the event will not only determine whether
computers or gaming consoles are needed, but will also define the peripheral
equipment—such as gaming mice, controllers, and computer monitors. Depending
on tournament rules, some professional gamers may bring their own equipment
which must first be inspected by tournament organizers to check for any special
modifications that may give that gamer a particular advantage. The proper
equipment is further contingent upon the type, size, and location of the event.
Similarly, the personnel needed to host eSports events parallels traditional
sporting events. Both event types need ushers, concession staff, custodians, security,
and ticket takers, but quantity differs based upon the size of the event and arena.
However, there are many unique positions needed, including technical staff for any
technology snafus as well as event/game managers who act as quasi-referees and
settle any rules disputes.
In addition, eSports event hosts act as main orators in order to address the
crowd, introduce teams, and present awards. This person also works with the
event/game manager to keep the event running smoothly. In some smaller live
events, this person may also assist as a broadcaster. Broadcasters are often referred
to as “shoutcasters” or “casters” and provide commentary for the viewing audience.
Much like in traditional sports, broadcasters are often former players of the game
played at the event and possess the experience required to be able to relay the action
to the audience. Casters serve an important role in all eSports competitions as they
are the ones that the audience relies on for game information and interpretation.
40
Running head: ESPORTS VENUES 24
Table 1
41
Table 1
Sample Venues
Sample Venuesthat
thathave
HaveHosted
HostedeSports
eSports
Venue Name Location Seating Capacity Size Sample eSports Tournament(s) Hosted
Air Canada Centre Toronto, Canada 19,800 665,000 sf • LoL North America Finals (2016)
Bill Graham Civic San Francisco, CA 6,000 31,140 sf • LoL World Championships Group Stage (2016)
Auditorium
Chicago Theatre Chicago, IL 3,533 4,500 sf • LoL World Quarterfinals (2016)
Commerzbank Frankfurt, 55,000 429,480 sf • ESL One Frankfurt Dota 2 Tournament (2016)
Arena Germany
Copper Box Arena London, UK 4,000-6,500 25,833 sf • Gfinity G3 (2014)
Key Arena Seattle, WA 17,072 400,000 sf • International Dota 2 Tournament (2014 – 2015)
Lanxess Arena Cologne, Germany 20,000 86,111 sf • ESL One Cologne - Counter Strike (2014 – 2017)
Jenny et al.
Madison Square Manhattan, NY 19,830 20,976 sf • LoL North American Finals (2015)
Garden • ESL One New York-Dota 2 Championship (2015)
• LoL World Championship Semi-Finals (2016)
Mandalay Bay Las Vegas, NV 12,000 70,333 sf • LoL North America Championship Series (2016)
Events Center
Rotterdam Ahoy Rotterdam, 15,000 (arena) 581,251 sf • LoL EU Spring Finals (2016)
Netherlands 40,000 (complex)
Royal Opera House London, UK 2,268 11,346 sf • Call of Duty European Championships (2015)
Sang-am World Seoul, South Korea 45,000 155,674 sf • LoL World Championship Finals (2014)
Cup Stadium
SAP Center San Jose, CA 19,190 450,000 sf • Intel Extreme Masters Tournament (2015)
Staples Center Los Angeles, CA 20,000 950,000 sf • LoL World Championship Finals (2013, 2016)
Wembley Arena London, UK 12,500 56,000 sf • EU League of Legends LCS Championship (2014)
• eSports Championship Series (2016)
Note. sf = square feet; LoL = League of Legends.
eSport Venues
Recently, some publicly financed sports stadiums have come under scrutiny
with taxpayers sometimes feeling the brunt of financial loss if these facilities do
not generate enough revenue within the community (Dorfman, 2015). With some
venues losing money annually, adding eSports to their event inventory may assist
with revenue generation. As previously noted, the Staples Center was one of the
first American venues to invest in significant infrastructure improvements to host
the eSports 2013 LoL final, which sold out in one hour (Tassi, 2013). Other venues
have followed suit with Madison Square Garden, Key Arena, and the SAP Center
all improving their capabilities to better host eSports events (Gaudiosi, 2015;
Henry, 2016; Nino De Guzman, 2015).
While many venues have renovated to host eSports events, Sacramento’s new
Golden 1 Center was built to host eSports as one of its major components (Gatto
& Patrick, 2016). It includes 650 miles of fiber optic cable and 300 miles of copper
in its infrastructure to support continuous technological improvement (Pierce,
2016). The facility will also house a 6,000-square-foot data center to allow the use
of technology to transform the building into whatever is needed from a technology
standpoint (Pierce, 2016). When the facility was designed, the goal of the venue
was to host events that needed large bandwidth such as drone racing and eSports.
The Golden 1 Center is an innovation of the open systems theory model of sport
facilities, showcasing its adaptability to future needs. However, certain eSports
events can only be hosted in venues of adequate size.
The capacity of each venue varies depending mainly on the location and type
of event hosted. For example, the 2014 LoL Finals were held at the Seoul World
Cup Stadium in Seoul, South Korea, which boasts a seating capacity of 45,000.
However, smaller gaming tournaments like NBA 2k17: Road to the Finals was held
in Orange County, California, at the eSports Arena with only a fraction of the
seating capacity and popularity.
Moreover, in order to host an eSports event, regardless of size, a tournament
and/or broadcast license from the game’s publisher is needed. In many cases,
small community events are covered under a community tournament license as
long as they are below certain thresholds and may not require formal licenses
from publishers. For example, Blizzard Entertainment (2017) established criteria
such as prize pools below $10,000 for a single event, not charging for online
streaming and not broadcasting on television, amongst others, that allow smaller
event organizers to put on the competition easily. Larger organizers that do not
fit Blizzard’s outlined criteria would have to apply for a formal license instead of
using the Community Competition License.
eSports-Specific Venues
The final approach to responding to the environmental change in the form of
the growth of eSports comes with a more all-embracing response. Cities or private
entities are building venues that are primarily used for eSports. This too is an
example of an organization responding to the environment in which they operate.
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Jenny et al.
eSports stadium attendance has seen substantial growth over the last few
years. For example, 173,000 people attended a two-weekend tournament in
Poland in 2016, up from 113,000 in 2015 (Elder, 2017). In 2015, seven venues had
crowds over 13,000 for a single eSports event, with five having over 20,000 (Kresse,
2016b). Certainly, these types of attendance figures have encouraged more venue
managers to have interest in hosting eSports events. However, the challenge for
many non-eSport-specific venues is providing the necessary infrastructure to
make eSports work (Hill, 2013). Fortunately, much of the needed technology
requirements needed to host eSports events are already included at major venues
due to pressure from traditional sports teams and other organizations that the
venue hosts (Maddox, 2016). The modern stadium provides many amenities
that fans find attractive, from the beauty of the stadium itself, to comfort, access,
scoreboard quality, and the ease of the layout (Tutka, 2016). Several venues that
solely host eSports events already exist.
eSports venues are located in cities all around the globe but are primarily
in larger U.S. cities, Western Europe, China, and South Korea. Table 2 provides
several venues built specifically for eSports located in the U.S. (three in California),
United Kingdom, and South Korea. These arenas are usually smaller in size and
seating capacity compared to traditional sporting venues (Brinkley, 2016; Cano,
2017). However, these venues allow for easy broadcasting and facility usage for
eSports, albeit significantly smaller live attendance (Karakus, 2015). Due to being
focused on gaming, eSports-specific venues are designed with a large center-stage
with desktop computer stations for gamers to access and for organizations to build
out specific designs for their specific game (Cano, 2017). These venues also have
significant broadcast capabilities, with several million spectators often tuning in
online (Karakus, 2015; Kresse, 2016b).
Moreover, sample future eSports-specific venues currently being constructed
include the 16,000-square-foot “Esports Arena” in Oakland, CA (Brinkley, 2016),
the 200-spectator, 15,000-square-foot “Millennial Esports” arena in Las Vegas, NV
(Akers, 2017; Cano, 2017), the multi-level, 30,000-square-foot “Esports Arena” in
Las Vegas, NV (Esports Arena, 2017b), a 14,000-square-foot eSports arena within
the new Golden 1 Center (home to the NBA’s Sacramento Kings) in Sacramento,
CA (Gatto & Patrick, 2016), and the 15,000-seat Major League Gaming (MLG)
Arena in Hengqin Island, China (Makuch, 2014). Additionally, Esports Arena
(2017a) has announced the first North American mobile eSports broadcast truck
under production which purportedly provides “an engaging Arena atmosphere
anywhere in North America” (para. 1). These developments show significant
investment in facilities engaged in eSports specifically, but many multi-purpose
arenas are now hosting eSports too.
43
ESPORTS VENUES 25
Table 2
Table 2
SampleeSports-specific
Sample eSports-Specific Venues
Venues
Venue Name Location Seating Capacity Size Sample eSports Tournament(s) Hosted
Blizzard Arena Los Angeles, CA 450 50,000 sf • Overwatch Contenders Playoffs (2017)
• Hearthstone’s Summer Championship (2017)
Blizzard eStadium Taipei, Taiwan 250 17,500 sf • Overwatch Pacific Championship (2017)
ELEAGUE Arena Atlanta, GA 300 10,000 sf • Counter-Strike: Global Offensive (2016 season)
Esports Arena Santa Ana, CA 1,000 15,000 sf • Call of Duty (2015 - Present)
• Hearthstone (2015 - Present)
• Dota 2 (2015 - Present)
• LoL (2015 - Present)
• Counter Strike: Global Offensive (2015 - Present)
• Starcraft II (2015 - Present)
• Daily Custom Tournaments (2015 - Present)
GameSync Gaming San Diego, CA 100 6,000 sf • LoL (2015-Present)
eSport Venues
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Jenny et al.
Future Research
As with any new and emerging industry, the eSports ecosystem does have its
own set of unique problems, especially from the event management and facility
perspective. Historically, there has been a lack of standardization in the industry
which could prevent players and teams from knowing which tournaments are
real and which are scams (Irwin, 2016). This issue is becoming less concerning
as leaders have emerged (e.g., Electronic Sports League, ELeague, Activision-
Blizzard, etc.), where governing bodies have helped regulate the industry with
standardized tournaments, schedules, rules, media deals, etc. However, future
studies might explore the current state of this phenomenon.
Moreover, eSports will always involve ever-changing technology as new
games, software, and hardware advance (e.g., virtual reality eSports). This presents
an issue for eSports event venues as they must adapt to technological upgrades.
Investigating eSports developments and market demands will always be a fertile
area for future research. In addition, much like how the base of sport management
literature has been grounded in business theory, there is a need for future
research to empirically investigate eSports through a sport management lens.
Regarding eSports venues, this might include studies on the motivations of why
spectators attend live eSports events or why eSports players (both professional and
recreational) participate at certain eSports competitions. Finally, future studies
might explore the challenges and effective strategies of eSports event managers
(e.g., facility design, marketing, sales, safety, cybersecurity, sponsorship, legal
issues, concurrent and post-production event video streaming, etc.).
Conclusion
eSports is a steadily growing community and business while hosting eSports
events continues to provide great promise for generating revenue. As evidenced
throughout this analysis, eSports appears to be navigating a major social and
economic change within the sporting industry, impacting facility and events
management. The best remedy may be for marketers and other stakeholders to
take time and learn the eSports industry (Irwin, 2016). eSports researchers and
experts should be sought after for outside companies to gain the insight needed
to manage successful eSports events and develop quality venues. In line with
open systems theory, facility managers should adapt to the changing environment
through investigating the local eSports market, or risk missing out on an excellent
avenue for growth potential.
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