May 29, 2019, 6:21 PM ETPanel, Fireside Chat

eSports: The Bumpy Ride to ROI

Gaming is three times larger than the film industry and five times larger than the television industry.
One-third of the global population plays games for an average of one hour daily.
87% of all spending on mobile app platforms is allocated to gaming.
The addressable gaming audience has grown from 200 million (90% male) a decade ago to over 2.6 billion (50% female), with significant untapped penetration in markets like India (<10%).
The industry is described as a "strategic imperative" rather than a luxury for traditional media and sports organizations.

Immortals Gaming Club (IGC) closed on $30 million in new capital and announced the acquisition of a matchmaking platform in Brazil to capture 90% of the local user base.
IGC rebranded to a "holding company" structure (IGC) to consolidate B2B relationships with game publishers and league operators, contrasting with the single-brand model common in traditional sports.
Esports teams trade at an average of 14 times annual revenue, compared to 6.5 times for the NBA and 11.3 times for Airbnb at its 2017 funding round.
Panelists suggest the high multiples may reflect "tourist capital" from traditional media investors, a shift in valuation logic from competitive play to influencer-driven content, and expectations for future growth.
Major tech entrants (Google Stadia, Apple Arcade, Microsoft xCloud, Amazon) are disrupting the landscape, creating a "boom" in M&A and infrastructure investment for the next 3-7 years.

Twitch, the primary distribution venue, reports an average session length of 109 minutes with 1 million concurrent users daily.
Twitch monetization relies heavily on voluntary viewer subscriptions (altruism-based) alongside advertising, with non-endemic brands reporting higher CPMs and purchase intent than premium cable.
Panelists note that the "cord never" demographic (18-34 year olds) is highly receptive to advertising, viewing sponsorship as a way to directly support content creation.
New content verticals on Twitch, such as "Gamer Snacks" (cooking), achieve 84% completion rates, significantly outperforming standard YouTube averages.

A strategic divergence exists between "closed league" franchises (e.g., Overwatch League geolocated teams) and "360-degree" influencer brands that leverage personal social reach.
Panelists assert that local tribalism (e.g., LA Valiant vs. Boston) successfully transcends digital boundaries, despite the global nature of the games.
Player retirement is occurring young (average age 21.5), creating an urgent need to transition athletes into influencer/content creator roles.
IGC aims to be the first in the industry to set high standards for player treatment, contract enforcement, and diversity, viewing this as a competitive advantage.
The panel anticipates player unionization will occur "sooner than thought," though early unionization might grant teams more control in exchange for standardized wages.
Concerns regarding player behavior, toxicity, and harassment are managed through strict Terms of Service, robust auto-moderation, and community self-regulation.

Gaming is not a zero-sum game against traditional sports; audiences are "blending" through cross-promotional live events (e.g., Lionsgate's Ash vs. Evil Dead with LA Valiant).
Traditional sports owners are increasingly "leaning in" to esports via partnerships (e.g., NBA 2K, FIFA) to access the elusive Gen Z demographic.
Game publishers are using esports infrastructure to accelerate the long-term relevance of their titles, with legacy games like Counter-Strike (20+ years) showing sustained growth in Asia.
Regulatory challenges include cross-border gambling distinctions, prize money transfers, and fraud prevention in global markets like India and the Middle East.
Mobile gaming is identified as the primary catalyst for the industry's ubiquity and social acceptability.