The pandemic brought a new class of gamers online for the very first time, and the gaming space has never been larger or more diverse. At the same time, while esports saw some viewership gains in the past year, it still had to deal with plenty of hurdles tied to pandemic restrictions on physical events.
At TechCrunch Disrupt, we recently sat down with Evil Geniuses CEO Nicole LaPointe Jameson who helms one of the oldest esports leagues around as one of the youngest CEOs in her class. We chatted about the challenges facing the esports industry to keep pace with a rapidly diversifying audience and the opportunities for building a league that can adjust to those shifts faster than others.
Evil Geniuses (EG) was founded in 1999 and has had a winding journey since. LaPointe Jameson got involved when the Chicago-based firm she worked for, Peak6 Investments, took over EG as part of an Amazon divestment following its acquisition of Twitch, which had previously owned Evil Geniuses. The capital injection came at a time when esports leagues were finally catching the attention of institutional investors who saw big opportunity in the space.
Years later, that potential is still there, but the path toward mainstream embrace has been more circuitous than many had hoped. Hard viewership numbers are hard to come by but signal a subindustry that’s growing more slowly than the overall industry it sits inside. Still, LaPointe Jameson believes the industry has plenty of room left for rising players to innovate and create new opportunities for the whole industry.
“Esports is still defining itself. It’s relatively new and it’s relatively newer in terms of when institutional investment has entered the space to — excuse the pun — level up in professionalism,” she tells TechCrunch. “Unlike traditional sports peers where there’s a lot of legacy infrastructure and a lot of loose rules and provisions, our biggest hurdle to innovation is not that big compared to what you might see in traditional ball-and-stick sports.”
Nicole LaPointe Jameson. Image Credits: Evil Geniuses
Some of LaPointe Jameson’s “innovations” at Evil Geniuses might seem like pretty standard offerings, including health insurance and an HR department, but even these benefits have remained starkly absent inside the industry. That greater maneuverability was hampered in some ways by the pandemic — COVID presented plenty of complications for esports organizations, as steady progress in building out high school and collegiate leagues stalled and leagues were forced to grapple with rapidly readjusting advertiser budgets.
“I think the split in how esports has been impacted has been pretty clear. On one hand, viewership generally rose, interest in gaming and esports generally rose, you can look at public comps for big developers and they’ve typically outperformed expectations during the pandemic,” LaPointe Jameson told us. “That being said, most of the revenue in the esports space, like traditional sports, comes from direct sponsorships or marketing and those budgets were put on pause in the pandemic. And so we had interest in eyes, but not often the capital or the magnitude of capital to fund.”
Chasing where the tournament money is versus clinging to proven franchises that can be expensive to participate in has been another challenge for leagues. While capitalizing on excitement around titles surging in popularity can bring in new fans, ensuring that organizations aren’t being distracted by titles from developers that may not prioritize maintaining a competitive ecosystem around has been a broader struggle.
“EG used to be the best in the world at a game called Halo, but competitive Halo is not a game that exists anymore because the developer didn’t continue to support the game from a competitive standpoint,” LaPointe Jameson says. “And so, unlike basketball, which isn’t going anywhere, our games might come and go. Fan excitement, the audience and the viewership as well as the talent skilled enough to compete at the level we want to compete at, ebbs and flows at a much faster cadence than you see in other activities and that’s just the nature of the product we play in.”
Esports is still dominated by a handful of older titles that are importantly seeing consistent support from their developers. Some of the top titles in the esports world are older releases such as League of Legends (released in 2009), Counter-Strike: Global Offensive (released in 2012) and Dota 2 (released in 2013). While newer titles like Overwatch and Fortnite have sought to become a bigger presence in the esports world, some newer players are finding that revamping gameplay to satisfy a growing consumer audience and maintaining stability for competitive athletes are goals that are often at odds with each other.
Ultimately, reaching an audience as wide and diverse as traditional sports have may simply take more time for esports as generations that grew up with gaming get older and bring more positive associations toward gaming with them.
“How we help bridge the multigenerational audience from a consumer perspective is difficult … Today, it’s a bit of a dance to bridge the understanding for some of the older generations that have negative perceptions of what gaming is, which often aren’t factually correct,” LaPointe Jameson says. “I am a complete optimist around the younger generations — I don’t believe esports will be perceived as a niche sport for younger audiences.”