re:Think Games — May 4, 20 Esports Industry Observations
At the risk of not being relevant because most of my observations are historic in nature — I still think it is worthwhile to build up my train of thought. Start at the beginning, and work my way through to where we are today. I like to understand the cause and effect of systems. It’s the engineer in me.
Good morning, and welcome to another week of ambiguity as the world tries to figure out how to come out of this self-imposed lockdown. While you’re trying to figure out your personal situation, I’m going to continue sharing my observations about the Esports Industry from my unique perspective both inside, and outside the industry.
Last week I wrapped up by laying out the case that most forms of competition that can draw an audience can be monetized. Monetization creates markets, markets create jobs, jobs imply industries. Pretty straight forward.
If you want to be involved in the industry, and you are not a professional gamer, the trick seems to be finding the opportunities. Having worked in the video game industry myself since the late ’90s, I am pretty familiar with that kind of question. People would often ask me, how do I get in the video game industry? I never really had a great answer. We just hired the best people we could afford. They had all sorts of backgrounds. In fact, when I was at Disney, we got to spend an entire day with Sr. Ken Robbins of Ted Talk Fame. Yes, that Ken Robbins. The expert on creativity. Turns out being creative is vitally important to Disney. In a room packed with 100 executives, Sir Ken (I can’t think of him as Mr. Robbins or just Ken), asked us to draw out a visual resume. Every one of us had a giant sticky note and a sharpie marker. When we were all done and we hung our personal artwork around the conference room of the Grand Californian, Sir Ken pointed out that not one single person in the room had the same resume as someone else. We had all followed varied and different paths to get to where we were.
In my experience, most industries are like that when they are forming. Everyone is trying to figure out how to get involved. From my perspective, I try to figure out where they came from so I can tell where they might be going. With that in mind, I spent a fair amount of time this past weekend trying to answer the question, “When did esports start?” There are many answers to that question. Some articles pin the start of the industry to the 1972 Space Invaders contest. Others push the date back as far as the 1950s when the first computerized contests happen.
I’m going to tell the source of the industry from my perspective — it was the combination of Starcraft and South Korea that sparked the explosion of the modern esports scene. Up until then, the video game industry was largely split by global regions with the United States generating 50–60% of all game revenue, Europe, the Middle East and Africa (Euromea) counted about 25–30% (European retail distribution was rough in those days, especially when you factored in all the costs of converting the languages). Japan typically pulled another 30% of revenue if the game was published by a Japanese company, and about 2% if it was an American company. The rest of the world (ROW) made up the difference, maybe 5% to 10%.
Then Starcraft hit and turned the model on its head. Back in the day, I heard from one Blizzard executive that South Korea by itself counted for 67% of the video games sales. No one in the video game industry had ever seen anything like it.
From my perspective, the origin of the modern esports industry starts there… in South Korea.