Number one sport involuntarily – experts discussed e-sports at the Startup Cafe meeting

On April 15, Moscow hosted the first online meeting of the Start-up Cafe, a project of the Moscow Innovation Agency with the support of the Department of Entrepreneurship and Innovative Development of the city, which this time was devoted to the theme of Sports Tech. It was also about e-sports – the moderator of the discussion and the head of the department of the Innovation Agency of Moscow Inna Gudovich called it “the most relevant niche” for investments in Sports Tech. Cybersport.ru attended an expert meeting – that’s what they discussed.

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“Start-up cafe” began with a short presentation by Alexei Parabuchev, the general director of the Innovation Agency of Moscow. He said that the Sports Tech industry is growing rapidly in the world, although it still cannot compete in terms of market size with video games or the EdTech industry. In 2018, the volume of this market amounted to $ 8.9 billion – ten times less than that of the gaming industry. According to experts, the growth of the sphere will be stable, but in the coming years it will not be able to impose a struggle on computer games or EdTech – by 2024, the Sports Tech market will be about $ 31 billion.

All investments in this industry are divided into three subgroups: solutions for athletes (37%), mechanisms for managing clubs and events (12%), and tools for engaging fans and producing content (51%). Standing apart is the e-sports field, which cannot be defined in only one of the groups. So, in e-sports there are gaming devices that fall into the category of “Solutions for Athletes,” but there is also Twitch, which works to engage fans and produce content.

The most popular investment destination for Sports Tech is News and Content. The most successful (by the total amount of attracted investments) startups from this sector for the period 2014–2019: the LeSports news portal ($ 1.33 billion) and the technology streaming company BAMTECH Media ($ 1 billion). The Discord service, better known to ordinary gamers, was also in the top ten – it took ninth place with an investment of $ 280 million.

If you conduct a similar analysis with the division into sports for which technologies have received the support of investors, you can find that e-sports is significantly ahead of all traditional sports and takes second place in the overall top. From 2014 to 2019, investors invested $ 1.1 billion in the development of Sports Tech solutions for the e-sports industry – almost four times more than in technology for football. Ahead is only fitness with $ 2.5 billion, as well as multifunctional solutions that affect several sports at once.

Parabuchev linked this popularity of the esports Sports Tech with the steady growth of the audience in this area. From 2017 to 2023, it will double – from 335 million to 645 million viewers. About half of them are regular spectators of e-sports tournaments, which facilitates communication with them for potential startups. Parabuchev noted that for the majority of representatives of this audience, video games and the corresponding sport are the “natural habitat”, and they remain in it for 30-35 years and even longer, while retaining consumer interest in products.

Parabuchev also listed the most promising areas of work at Sports Tech for the next three years. They are relevant not only for e-sports startups, but also for products in other areas. Big data analysis and artificial intelligence led the rating, and virtual reality technologies did not lag far behind them. 58, 55 and 45% of the experts surveyed voted for them, respectively (respondents could choose several options, so the total percentage of votes does not equal 100%).

When experts were asked to choose the most promising areas, e-sports turned out to be the undisputed leader. It was chosen by 43% of respondents, the second and third lines were taken by the mechanisms for training athletes, as well as the platform for the delivery of sports content (which may be relevant for e-sports).

Ilya Karpinsky – Director for Strategic Development MY.GAMES – said that he had previously studied big sport. According to him, traditional sports today are a business with subsidized support from the state or betters. The principle of eSports is like a big sport, but because of this, the industry has problems. So, according to Karpinsky, the betting business and computer sports can not always agree due to the fact that the latter is largely oriented towards an audience under 18 years old – one that is not available for BC. Support for game publishers is also needed – without them, Karpinsky believes, organizing large events is quite difficult.

Another esports feature highlighted by MY.GAMES Strategic Development Director is the lack of stars in the classic sense of the word. In big sports, players’ careers last many years, so brands willingly pay teams and federations to associate themselves with them. However, in e-sports, according to Karpinsky, it’s much more difficult to find individual sponsorship contracts.

He also noted that many products today are at the junction of the gaming and e-sports industries and it is sometimes difficult to draw a line between them. For example, these include various training services that help beginners to master competitive disciplines, or various analytical programs.

If we consider such startups as gaming, then e-sports, according to Karpinsky, is now faced with the same problems as any traditional sport. So, if the industry loses the support of publishers, then it cannot exist. However, Karpinsky sees no reason for negative forecasts. On the contrary, he believes that today eSports is looking for ways to become “the number one sports industry in the world.” However, as in big sports, independent startups in this area still have an unanswered question: “How to make money?”.

Director of Strategic Communications of ESforce Holding Yaroslav Meshalkin commented on the relevance of eSports in the realities of the COVID-19 pandemic. He refused to call this period the “high point of the industry”, but admitted that in March-April, organizers of offline events (concerts, sports events) came to his company weekly with questions about how they can translate their events online using technology eSports.

According to Meshalkin, after the announcement of the coronavirus pandemic, computer sports “became involuntarily [спортивной] industry number one “in the world both for betting (for lack of competitors among other sports), and for the viewer. The latter became possible due to the fact that big sport began to look for ways to integrate now inactive athletes into online events.

This has already created a huge variety of competitions with the participation of existing athletes: such events were organized by Formula 1, NASCAR, NBA and national football leagues in many countries. This attracted a large audience – including one that was not interested in e-sports. Because of this, the industry, according to Meshalkin, has become the main supplier of online formats and technologies for other sports fields.

How Formula 1 and other sports brands are mastering e-sports can be found in this article. Formula 1 Global Partnership Project Leader Will Simon said that Bahrain’s virtual Grand Prix has attracted more than 1.3 million viewers, and since then the company has managed to increase its reach even further.