The history behind a $5 billion eSports industry

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The history behind a $5 billion eSports industry

According to a Activate’s recent Tech & Media Outlook for 2017, annual revenue for eSports is projected to exceed $5 billion by 2020. For comparison, that’s more than the National Hockey League’s (NHL) $3.7 billion in average revenue and the $4.8 billion from the National Basketball Association (NBA). eSports events are filling existing sports stadiums, including KeyArena in Seattle, STAPLES Center in Los Angeles and SAP Center in San Jose. These are arenas that house professional sports teams like the San Jose Sharks and Los Angeles Lakers, Clippers and Kings. Tens of thousands of people and arenas dedicated to eSports are starting to pop up everywhere.

While the entrance of eSports into the mainstream – including broadcasts on large media networks such as ESPN, TBS and Yahoo! – may seem recent, eSports have been around for more than four decades. In order to understand eSports, it’s important to learn the history surrounding this industry and why this surge has been in the making for a long time.

Editor’s note: Gallery design by Rebecca Friedman, TechCrunch’s social media associate. 

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The 1970s

“Star Wars” was the highest-grossing film of the decade, Elvis Presley was the No. 1 artist, and disco was at its peak. And in 1972, the first eSports competition was was launched with the game “Spacewar,” which took place at Stanford University.

Students were invited to an “Intergalactic Spacewar Olympics” and the grand prize was a year’s subscription to Rolling Stone magazine. It would be another eight years later, before Atari held its “Space Invaders” Championship in the first large-scale video game competition. Over 10,000 players from across the United States showed up — proving demand for the new competitions.

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The 1980s

While the 80s wasn’t a big decade for eSports, innovation in the industry brought video games into mainstream culture with the introduction of the Nintendo Entertainment System (NES) in 1985.

The NES helped revitalize the gaming industry with iconic games such as “Pac-Man,” “The Legend of Zelda,” “Super Mario Bros.” and “Donkey Kong” leading the charge. The end of the 1980s also brought about another console – the Sega Genesis. With more and more big companies investing in the space, it gave many people their first taste of gaming and the competition that comes with it.

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The 1990s

The 1990s brought Internet connectivity to gaming, which paved the way for the eSports movement. This infrastructure transformed the gaming landscape as new games let players compete online in tournaments for “Quake” and “Warcraft”. Blockbuster Video – yes, a video store – also ran a popular gaming tournament in the early 1990s and the latter part of the decade saw the rise of celebrated competitions.

Tournaments established in the late 1990s included the Cyberathlete Professional League (CPL), QuakeCon and the Professional Gamers League. PC games played at the CPL included “Counter-Strike,” “Quake” and “Warcraft.” With the increasing regularity of organized large-scale tournaments, team federations were formed in the most popular games like “Counter-Strike.”

Some of the more well-known eSports leagues at the time included Mousesports, NiP, SK-Gaming and Team 3D, with top teams winning prizes totaling in the hundreds of thousands. The goal of these federations was to increase stability in the eSports world, particularly in standardizing player transfers and working with leagues and organizations.

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The 2000s and Beyond

In the early 2000s, modern eSports was driven by its immense popularity in South Korea. One of the contributing factors was the heavy investment in the mass building of broadband internet networks following the 1997 Asian financial crisis. Internet cafés, rather than soccer fields or shopping malls, became the most popular hangouts for large numbers of young people.

The 1998 release of the real-time strategy game “Starcraft” helped pave the way for televised eSports. Coverage of competitions for games like “StarCraft” and “Warcraft III” became regularly televised on dedicated 24-hour cable TV game channels such as Ongamenet and MBCGame. These channels went on to generate over $200 million in eSports revenue in 2007.

Today, SuperData Research projects that over 213 million people will watch competitive gaming this year, and the industry is on track to reach 303 million by the end of 2019.

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