COVID-19: the future of esports and gaming collaboration


Our team: Thomas Edwards, Alan Wetterhahn


Although the COVID-19 outbreak has been devastating for many businesses, certain industries such as the gaming and esports sectors may not be as badly affected as others.

Social distancing means that, whilst many businesses are suffering from a lack of people visiting their bricks and mortar outlets, the gaming and esports industries are seeing record numbers of visitors to their online offerings as people increasingly turn to entertainment from their homes.

Whist gaming companies will undoubtedly suffer from a lack of footfall through their land-based casinos (with visits to social venues being advised against by the Government, and a possible ban on such visits in the pipeline), and with esports suffering from the cancellation of arena-based tournaments and the closure of team outlets, both industries can counter the effects of these losses with their strong online offerings.

The online gaming industry is heavily reliant on sports betting. However, with the postponement of most of the major UK, European and US sports, the market for such betting has dramatically decreased. However, far from deterring customers from using the online betting services, the industry trends have been leaning towards people either betting on the sports that are still available, or sports punters turning to new areas of online gambling (for instance, online casino offerings).

This presents an opportunity for the esports industry. For various reasons, the esports industry and the online betting industry have, to date, been reluctant to fully engage with each other. At least in part, this is because the demographics of online gambling and esports players/viewers are often very different and the markets have been able to successfully exist separately from one another. However, because of the effects of coronavirus, this may be about to change.

The esports industry has reacted fantastically well to the drastic changes brought about by coronavirus. Many esports industry events have moved to take place wholly online, and with the sophistication of the technology (and users of that technology) involved, the transition has been rapid and fairly seamless. What is more, where the more traditional sports events have been forced to cancel or postpone, esports producers have spotted an opportunity in the market. There is perhaps no better example of this than Veloce esports’ ‘Not the Australian Grand Prix event’, which occurred in place of the cancelled official F1 Australian Grand Prix. Veloce managed to entice F1 driver Lando Norris to take part in this event (along with a host of other celebrity esports players) and the event led to Norris breaking the record for Twitch’s F1 offering, clearing 70,000 concurrent viewers. This comes amidst a time of record players on some of the leading esports titles (including CS:GO, which broke the 1 million concurrent players mark). This has obviously led to opportunities for esports brands to increase their online content offerings which will likely lead to increased income through online advertising, but online betting presents another possible revenue stream for these brands. It remains to be seen whether the increased online presence of esports fans will result in sales of merchandise that make up for (or even exceed!) merchandise sales that traditionally take place at esports arenas.

With record numbers of players and viewers tuning to esports (who knew that so many people working from home would have such an effect!), and plenty of online gamblers looking for new avenues in which to place their bets, it may be that the two sectors are on a collision course in the near future.

Online betting in the esports forum obviously needs to be well regulated. Apart from needing to comply with all applicable legislation (Including the Gambling Act), players and gamblers alike will demand certain standards of independence and integrity from any esports game wishing to cash in on the betting industry. Examples of how this has been done in the past include prohibiting betting on esports when the players are in remote locations, having regulated referees in attendance, and having specialist software in place to flag up any suspicious gambling patterns. The coronavirus poses new challenges for industry regulation as players and fans are forced to self-isolate and lock-downs are increasingly enforced. Online activity is increasingly becoming the only option. However, these are challenges that these sectors can overcome (especially with their use of innovative technology) and could open up very lucrative new revenue streams.

If you would like to speak to Thomas Edwards or Alan Wetterhahn about how to monetise your esports offering or gaming or esports concerns related to the coronavirus, please get in touch at awetterhahn@fladgate.com or tedwards@fladgate.com.

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