If one more VC discovers eSports this week & starts tweeting about it, I am going to come up with an ultimatum. And it will not be pleasant.
— Startup L. Jackson (@StartupLJackson) August 15, 2015
Like many others nowadays, I’m fascinated by the phenomena around “esports,” which can mean watching other people play video games or code or do both, either in person, or online, or on one’s phone. I had to laugh when Startup L Jackson tweeted “If one more VC discovers eSports this week & starts tweeting about it, I am going to come up with an ultimatum. And it will not be pleasant,” because it’s true…but there is good reason. I was catching up on some reading today and realized there are actually a confluence of non-connected trends which form to make the present day fascination quite logical:
One, the youngest millennials are now right in the middle of their teenage years, right around when they can almost drive a car. This generation entered the world when mainstream gaming consoles hit the market and started to invade the home, with the Nintendo Entertainment Systems coming to the U.S. in 1986, the Sega Genesis in 1989, Sony’s Playstation in 1994, and the XBox in 2001. Like I did, many folks owned or tried every system, and they popularized casual video game play.
Two, the culture around these home gaming systems is that only 2-4 people could play at a time. If you grew up around these consoles, you would clearly remember waiting your turn, and while you waited, you would watch other people play the same game you wanted to play. You’d just sit there. You didn’t have a phone to distract you or the Internet at home to jump on. Turns out “watching other people play video games” is randomly engrained in millennial muscle memory because everyone exhibited the behavior. This turned out to be inherently social behavior, waiting in tournaments to play the next round of EA Sports Madden or NHL, or trying to win Zelda or Metroid.
Three, over half of millennials grew up in an age where network TV was on the decline. Today, for many of them, network TV is wholly irrelevant. Instead, they stream content online, pay for subscriptions, buy individual shows, and watch shows on-demand. While mobile phones and networks take the place (in terms of attention) of TV, there are hours in the day folks can devote to this and they certainly do.
Four, the infrastructure required to support a range of esports activities has become robust enough to handle the traffic. People can now broadcast and/or consume esports media from home, networks like Twitch.tv and others have cropped up and amassed large audiences. Mobile phones, data networks, and video channels are also more robust, of course. MLB recently announced it was spinning out its quietly robust digital streaming and hosting business, a unit which could be worth many billions of dollars more than it is today. As livestreaming technologies have demonstrated this year alone, social networks like Twitter are ready to provide users with live content (a la Periscope) and to support those streams as a piece of audience development and engagement.
Five, the cultural interconnectedness from a tech point of view between Asia and the U.S. is also responsible for the trend hitting the west. The culture of watching others play video games in larger audiences began in parts of Asia, which made sense because that’s where the home consoles were originally developed and released, before shipping to the west. Like messaging platforms today, the esports behavior is older and just took a bit longer to incubate here in the west, but now these micro-cultures have converged.
Sixth, the global rise in the importance of and celebrity around computer literacy is timed in such a way that it doesn’t make the act of participating in esports seem like a waste of time. Rather, it can be seen as both educational and social, as both entertainment and interactive.
And, there you have it, all of these forces put into a blender, and it all explains why esports is so popular, why sports and media networks are not only allocating mindshare and budgets to it, but also doing this for derivate products, such as gaming networks which let fans bet on esports participants, among other parlays. It’s been almost a year since Microsoft acquired Minecraft and when Amazon acquired Twitch, and with most technology investors being a bit older than the millennial generation, most of them have enough nostalgia to understand the behavior and recognize the power in the mass audience aggregation when they see events like this one. Like Facebook and Instagram and Snapchat aggregate audience attention on the web and on phones, esports is starting to do the same thing in the same channels, but also in real life, where kids of all ages collide, compete, and make new friends. It’s almost like an entirely new social network, and that’s what gets people excited — and rightfully so.