E-SPORT'S MOVING INTO THE BIG LEAGUES - A BUSINESS STUDY OF THE E-SPORT MARKET IN HUNGARY AND THE V4 COUNTRIES - PWC
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www.pwc.com/hu E-sport's moving into the big leagues A business study of the e-sport market in Hungary and the V4 countries
Introduction Market overview Market analysis
E-sports, virtual sports games, fantasy sports Participants and cash flows
The origins of e-sports Revenue sources in the e-sports
International organisations and competitions market
E-sports in Hungary
03 04 07
Social listening analysis of the Hungarian The relationship between
and regional consumer environment traditional sports and
e-sports
Statistical results of the V4 nations
Central topics in Hungary The relationship between traditional
Content in the Czech and Slovak languages sports and e-sports
Polish content Traditional sports clubs in e-sports
Perception of e-sports in the V4 countries Should e-sports be treated as sports?
13 20
Challenges The economic and Future vision of
The loot box problem
social impacts of the development
Cheating e-sports of e-sports
Protecting the physical and Economic impacts
mental health of young people
Social impacts
25 26 29
E-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries | 3 Introduction One result of the digitalisation of today’s culture is that many things around us, including sports, are being redefined. The growth of e-sports is dictating a faster tempo than any other branch of sport, or indeed any other sector within the leisure industry. What kind of economic structure underlies the development? Who is profiting from the growth in the sector? How can companies participate as investors or sponsors? These are the questions we set out to answer in this study.
4 | E-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries
Market overview
E-sports, virtual sports games, fantasy sports
According to the most widely accepted According to research by eNet, in With fantasy sport, the players can
definition, electronic sports, otherwise Hungary the most popular games played assemble their own dream teams
known as e-sports, is where professional as e-sports are Counter Strike: Global consisting of players who exist in real
players pit themselves against each other Offensive (CS:GO, FPS), League of life. The result achieved by the team is
in organised, competitive video game Legends (LoL, MOBA), and Hearthstone based on the outcome of the real-life
tournaments. It is important to (online collectible card game). players’ performance in real
emphasise that all three criteria have to competitions. The best-known fantasy
be met in order to fit the definition of E-sports should not be conflated with sport, NFL Fantasy Football, has
e-sports. Gaming at home, as a hobby, is virtual sport and fantasy sport. Virtual spawned a whole industry in the United
not considered to be e-sports. sport is where the outcome of the game is States, with fantasy consultants and
determined by a random combination of television programmes. The main
The video games that are most computer-based algorithms; viewers can difference between this and virtual sport
commonly encountered in relation to follow the game in the form of broadcasts is that fantasy sport is a social pastime.
e-sports are real-time strategy, fighting, transmitted via an electronic platform. The players create separate leagues
first-person shooter (FPS), and The most common virtual games are within their group of friends, and play
multiplayer online battle arena (MOBA) virtual football, horse racing and against each other throughout the NFL
type games. Also popular are the motorcycle racing, where fans can place season.
video-game versions of classic sports, bets in line with the traditional sports
such as football or motor racing games. betting model.
Figure 1
Types of e-sport game with examples
Real-time Strategy Fighting First-Person Multiplayer Classic Sports Other - Hybrid
Shooter Online Battle Arena
Source: PwC Hungary survey
E-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries | 5
The origins of e-sports
E-sports tournaments have existed for E-sports as we know it today were born
more than 40 years now. The first virtual in the ‘90s. This was when it became
encounter was played in 1972 with a technically possible for players not only
game called Spacewar. The US home to play against the computer, or “bot”,
electronics company Atari organised a but also to compete directly against each
video game competition in 1980, with other.
more than 10,000 participants.
International organisations and competitions
To understand the complex structure of Unlike football, however, e-sports do not The decentralised organisational
e-sports, the individual elements of the have a global governing body. Instead, structure means that several teams can
traditional world of sport may serve as a various national and international compete simultaneously in numerous
useful analogy. In the world of associations operate in parallel with each tournaments and leagues, usually in a
traditional sports, the major clubs like FC other. The oldest and largest e-sports knock-out system, in parallel with each
Barcelona, for example, do not limit organisation in the world is the ESL other. The producers of the games
themselves to operating in a single (Electronic Sports League), which runs themselves are often present as
branch of sport, but are also active in the competitions worldwide. The Cologne- organisers at these events. This is related
fields of football, handball or basketball. based organisation maintains 11 offices to the fact that the publishers have
This is also the case for some of the teams and several international TV studios intellectual property rights in the case of
in e-sports, who enter various team around the world. Another recognised every game, so nobody can organise a
members in various games. A good international organisation is the competition without permission from the
example of this is Fnatic from the United International e-Sports Federation (IeSF), publisher concerned. One of the most
Kingdom, or SK Telecom from South founded in 2008, which currently has influential actors in the international
Korea. Other teams, on the other hand, some 50 member states in five e-sports industry is the US games
concentrate exclusively on a single game, continents. developer Riot Games, which produces
only taking part in League of Legends League of Legends, among others, and is
competitions, for example. also responsible for organising the
League of Legends Championship Series
(LCS). Its competitor Valve, which
produces Counter-Strike and Dota 2,
organises the major competition known
as The International, where most
recently it was possible to compete for a
prize of over USD 24 million.
6 | E-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries
E-sports in Hungary
The local precursor to e-sports was aired The “One Million for Hungarian e-sports” In an interview Balázs Biró (founder of
in Hungary between 1990 and 1993 in movement (or E-sportmilla for short) was E-sport1.hu, president of the One Million
the form of the TV programme ‘Elektor launched in 2013 at the initiative of for Hungarian E-sports Association, and
Kalandor’ presented by household name gaming enthusiasts, and has operated as chief organiser of the V4 Future Sports
Tibor Dévényi, in which callers played an association since 2017. The Festival), said that the purpose of the
Super Mario on an NES (Nintendo Association has received HUF 2 billion initiative is to educate society and lobby
Entertainment System) console, using (USD 7,2 M) in support for development for the recognition of e-sports as an
the buttons on their telephone keypads. of the industry. Also in 2017, the official branch of sport, and to put in
In contrast to this, in response to global Hungarian e-Sports Federation was place the organisational frameworks for
trends, securing Hungary’s place on the established, and since then it has e-sports in Hungary. He considers the
e-sports map is now a national strategic commenced the process of joining the latter to be essential to strengthen the
objective. International e-Sports Federation. confidence of sponsors and competition
organisers in e-sports, thus unlocking its
full potential.
E-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries | 7
Market analysis
Participants and cash flows
All the participants in e-sports have their publishers, which is why their role within influencers – these will be discussed in
own sources of revenue. The ecosystem is the ecosystem is key. Access to e-sports the chapter on Sponsorship and
driven by the gamers, the teams via the broadcasting of content Advertising – and betting offices,
organised around them, the tournaments (competitions, game streams, promote the growth of the e-sports
at which the teams compete, and the commentary) is provided to audiences by market, an arrangement that is
audience. Naturally, the games what are known as platforms such as ultimately beneficial to all concerned.
themselves are developed, and the right Twitch.tv and YouTube. The other
to hold competitions is sold by the participants, such as sponsors,
Figure 2
The e-sport ecosystem
Advertising
Sponsor Platform
Sponsorship and membership fees Broadcasting
Profit share (on main events)
rights
Stream
partnership
Financial reward Pay
Advertising
Competition Team Gamer Broadcasting
right
Influencer Competition entry fees
Association
Professional e-sport Association
consent
Community funding
Product and ticket sales Rights
Betting e-sport
In-game transactions Publishers
office community
Premium content
Bets, winnings
Advertising
Source: PwC Germany, PwC Hungary
8 | E-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries
Figure 3
Examples of participants
Developer/
Sponsor Platforms Competitions Influencers Teams Betting
Publisher
Fear
Thorin
Source: PwC Hungary
Revenue sources in the e-sports market
In Newzoo’s estimate, based on brand The most important e-sports markets a relatively minor degree of market
investments, in 2017 e-sports had grown continue to be the United States, South saturation has been observed recently,
to become a USD 655 million dollar Korea, China, and Germany. In South and thus since 2015 the United States has
industry globally, and in 2018 this will Korea, where e-sports has enjoyed great taken South Korea’s place as the world’s
expand by a further 38.2% ($906 M), and popularity for far longer than elsewhere, largest e-sports market.
go on to top USD 1.5 billion in 2020.
Newzoo has identified five main
Figure 4
categories of revenue source. Sponsorship
Global distribution of e-sport revenue in 2018
and advertising have the biggest slice, at
almost 60% of overall revenues. This is
followed by media rights with almost Merchandise &
Ticket Sales
20%, then by games publishers’ royalties
and merchandising and ticket sales, $95,5M
which have almost equal shares. +16,2%
11%
The Hungarian e-sports market is small Game
for the time being, but is growing Publishers’ Fees
dynamically. Specific data relating to the $116,3M 13%
size of the e-sports market is not +11,0% 2018 total Sponsorship
available, but the size of the domestic $906M 40% $359,4M
video games market gives a good +53,2%
+38,2%
approximation. In a 2017 survey, eNet
year on year
estimated the size of Hungary’s video 18%
games market at USD 109 million. This Media Rights
amount was calculated on the basis of $160,7M
transactions conducted in the following +72,1% 19%
three categories: in-game purchases,
hardware and game software purchases. Advertising
In 2016 this figure was around half the $173,8M
currently estimated value. This rate of +23,8%
growth permits us to conclude that
e-sports is increasingly of interest not
only to sponsors, but also to investors. Source: Newzoo
E-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries | 9
Sponsorship and advertising
The most important source of revenue – at
approximately USD 359.4 million based on
„
In our team, HellRaisers,
preliminary estimates – is sponsorship, approaching the sponsors in
where a segment growth of 53.2% is person is not allowed. Only
expected. The sponsors support individual team-level agreements are
teams as readily as they do the large-scale permitted. This is one of the
events, such as the ESL One, or the V4 Future reasons I don’t stream very
Sports Festival, which recently debuted in much, because it’s not expected
Budapest. The companies providing the most of me. Incidentally, it’s mainly
financial support are usually companies that in the USA that teams tend to be
distribute gaming devices: for example, Intel, more permissive when it comes
Asus, Samsung, Alienware, Logitech, to personal brand building.”
NeedforSEAT, Noblechairs, Razor or Nitrado.
Böröcz „DeadFox” Bence,
In Hungary, in addition to the Digital Welfare
Top CS:GO player
Program, Magyar Telekom is listed as a
primary sponsor.
Possible directions for sponsorship:
Sponsorship of individuals Sponsorship of teams Sponsorship of events
One of the strategic directions that we see Sponsoring a team can carry the greatest Sponsoring a particular event is a safer
emerging is where economic actors commit risk for the sponsor, as the composition of option, but the cost implications are also
to backing individual influencers the team, and thus the results it achieves, greater.
(commentators, gamers, ex-gamers, social can change extremely rapidly. Due to the
media celebrities) who are trusted by exceptionally rapid pace of growth in the
Generation Z, as a means of getting close to industry, however, sponsoring a winning
the members of this cohort and remaining team can bring outstandingly high returns
relevant to them. for sponsors.
E-sports consumers and their interests without a direct connection to e-sports In this light, it is hardly surprising that
are clearly definable. Maintaining a among the sponsors. This is also the revenues from advertising space sold
presence through e-sports represents an demonstrated by the fact that over 600 during online streaming are in second
exceptionally efficient channel for the sponsorship agreements were made from place among the major sources of
marketing activity of the brands that 2016 to mid-2017, with more than 100 of revenue. In 2017 these amounted to USD
target them. It is precisely this group that these being what are known as non- 140.4 million – a growth of 23.8% year
is very difficult to reach using traditional endemic brands. The telecommunication on year – which considerably exceeded
methods, because they do not watch sector (Vodafone, T-Mobile, SK Telecom), the rate of growth in the revenues of this
television and use ad blockers for for example, sees e-sports as a potential kind in traditional branches of sport.
filtering out simple online goldmine, but investors are also arriving
advertisements. For this reason, it is from the automotive industry, FMCG
increasingly common to find brands industry, body care and financial sectors.
10 | E-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries
According to some sources, at this year’s
Figure 5
Intel Extreme Masters championship and
Approximate number of sponsorship agreements made from 2016 to mid-2017,
expo, the total value of advertisement
by sector
sales may have been as high as USD 27
million. The event had a total of
approximately 169,000 visitors during Online media
the five days, in addition to the millions
of online viewers, so the non-endemic
Non-alcoholic drinks 40
brands brought multitudes of their 50
product ideas to the event in order to find
out how they can connect more Online services
effectively with the fans of e-sports. The
holding of physical events, therefore, 60
Total IT/Computer
could be an important building block for
the sector’s development. Large-scale 610 360
events however, require the appropriate
infrastructure. Accordingly – in Hungary
too – the development of sports facilities Retail
and Internet access could have a 100
beneficial effect on the industry, because
the availability of a good-quality venue at
an affordable price could attract global
events to our country. Source: Nielsen Market Intelligence
„
Gillette entered the e-sports market in 2017 by concluding a
global partnership agreement with ESL to become a
sponsor of the Intel Extreme Masters world
championship in Katowice, Poland.
“Young men are increasingly difficult to reach via traditional channels,
so we could not neglect the upcoming generation, present en-masse in
e-sports. Gillette’s entry to the market was preceded by a major survey,
as we had to step out of our tried and tested processes. Due to the
exceptionally broad international access, national or regional
approach is no longer relevant. We had to understand how e-sports
consumers think and communicate, what is important for them, and
what brands they listen to. Relevance and humility were important in
order to gain the community’s acceptance, as gaming culture is very
closed. In this scene, the members of the community actively and
assertively make it known if they don’t like something. This is where the
greatest risk of market entry lies: if you get it wrong, you could kill off
your brand for a whole generation. Gillette has received very positive
feedback so far, so I can say that we will continue to maintain a
presence in this sector going forwards.”
András Papp
Gillette Brand Communications Leader,
EIMEA region at Procter & GambleE-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries | 11
Revenues from media Spending by e-sports fans, incidentally,
rights, game publishers’ is currently significantly lower than that
of the fans of other sports. By way of
fees, merchandise and
comparison: while an average e-sports
ticket sales fan’s spending on e-sports in 2017 was
USD 3.6 (HUF 1000) in the United
The game publishers’ fees listed by States, the average spent on
Newzoo (estimated at USD 116.3 conventional sports, taking all sports
million, or HUF 31.8 billion, for 2018) into account, was USD 54 (HUF 14,800)
represent publisher expenditures on the per annum. We assume that the
organisation of e-sports events that go to spending of e-sports fans will creep
independent partners, or what are upwards as the years pass, just as it has
known as white label organisers. This done in the case of the traditional sports.
sum does not include the fees for events One reason for this could be that, as the
the publishers organise themselves. market matures, a growing number of
sponsors will build a rapport with a
Additional revenues derive from the substantially higher number of
amounts charged for the competition consumers. Also, the current audience
media broadcasting rights, both on TV consisting of minors or people at the
and online. Both broadcasting and start of their careers is likely to maintain
content production are dominated by the its connection with e-sports later, when
online platforms, among which Twitch. it has greater purchasing power.
tv and YouTube stand out, although
conventional television channels also
exist; for example, in Hungary, the Figure 6
Digital natives are expected to maintain their interest is e-sport
mindiGO Sport service package created
in the long run while their income is increasing
by Antenna Hungária includes an
international e-sports television
channel.
25% 90 000
80 000
Similarly to the traditional branches of
20% 70 000
sport, the e-sports industry now also
offers merchandise such as clothing and 60 000
various computer accessories. The 15%
50 000
USD
revenues from such merchandise and
40 000
ticket sales are expected to total USD 10%
30 000
95.5 million in 2018.
5% 20 000
10 000
0 0
13-17 18-24 25-34 35-44 45-54 55-64 65-74 74-
share of e-sport fun in age projection income
group
Source: PwC, Statista, Newzoo12 | E-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries
Revenues of the e-sport- Games of chance in e-sports can usually • “social betting”: Bets are made in
related gambling industry be played with real money, virtual groups, either with real money or
currency or virtual consumables (such as virtual currency, and in this way the
Newzoo’s estimate does not include game elements of value) and represent members of the group can bet on
revenues from gambling related to an extraordinarily wide variety. One of several events or with greater sums
e-sports. We will present these on the the most popular forms of gambling is than if betting individually.
basis of Statista’s forecasts. placing bets on the outcome of e-sports • fantasy betting: The e-sports version
events. This type effectively works in the of the fantasy leagues associated with
According to Statista’s forecast, e-sports same way as traditional sports betting. conventional sports: the players
gambling revenue could rise from USD themselves can assemble their own
24 million (2015) to USD 1.8 billion by In addition, the e-sports industry (as a dream e-sports teams of players who
2020. One of the main reasons for the result of its digital nature) has introduced exist in real life. The result achieved by
expected growth in the betting market is numerous new types of gambling into the the team is based on the outcome of the
that the e-sports market itself is also realm of conventional sports betting. real-life players’ performance in real
expanding. The fan base is getting The greatest turnover is generated by the competitions.
bigger, and a growing number of following types of game: • challenge betting: : The players hold
professional events are being organised. competitions between each other,
The greatest challenge is represented by • “skin betting”: “Skins”, which are which anyone can join for a fee. The
the uncertainty surrounding regulation, virtual cosmetic elements (such as an competition is played for the
which we discuss in the section entitled ornately decorated helmet or gold nomination fees collected from the
Challenges. Kalashnikov) that can be accessed in players.
the games, are used as virtual currency.
The bets on the results of games are
made for these. The “skins” may be
redeemable for real money later.
Figure 7 Figure 8
E-sport betting market revenue E-sportsbook betting volume by game, 2016
worldwide
Other
2015 24
Starcraft 2 9%
2016* 381 8%
2017* 738
Dota 2
2018* 1096 League of
18% Legends
2019* 1453 38%
2020* 1810
* becsült eredmény
CS:GO
The total European sport betting market
revenue is currently appr. 185 000 mUSD 29%
Source: PwC, Statista, Naurus AdvisorsE-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries | 13
Social listening analysis of the
Hungarian and regional consumer
environment
Due to the rapid international expansion, the analysis is, based on the massive topics and opinion leaders generating
according to Newzoo’s calculations, quantities of qualitative and quantitative outstanding levels of interest in the topic,
e-sports is as popular as ice hockey or data accessible in the “online space” as well as the distribution of the content-
baseball among American men aged (social media websites, news portals, related and statistical data along various
between 21 and 35 (with 22% of them forums, blogs, etc.), to be able to give a dimensions. The study also included an
watching it). The number of viewers new and different perspective on the user analysis of the overall emotional charge
globally could reach 380 million this attitudes towards e-sports, the impulses, of user-generated content.
year. According to eNet’s research, in events and anomalies that trigger
Hungary e-sports had more than 223,000 interest in the topic. In the analysis we studied content
individual viewers in 2016. This figure generated between 1 September 2017
had grown to 420,000 by the end of 2017. Our research extended to include a study and 20 March 2018 in the Hungarian,
of the online discourse emerging in Polish and the Czech and Slovak markets
To complement the traditional surveys, relation to e-sports in the “Visegrád 4” (we examined the Czech and Slovak
PwC Hungary also conducted a study of group of countries during the past six content together due to the similarities
the e-sports topic using the social months, in the context of which we between the two languages and the
listening methodology. The purpose of analysed the news items, posts, focus lower number of hits).
According to a survey by PwC Global Media Outlook, the group of Basic social listening concepts
people interested in e-sports (either as viewers or players) is as follows:
Mention: an individual social media post
or internet news item, comment, forum
thread or other content featuring any key
words of the topic being analysed; also,
all posts/comments that are associated
with relevant content relating to the
same issue.
Access: the number of individual views
69% generated by the analysed mentions. (In
the present analysis this does not
Average age: denote the number of individual users!)
Between 18 and 34 28 years From a mixture
of races
Who have several smart Typically with high
devices on which they purchasing power
follow, or themselves
play, e-sports14 | E-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries
Statistical results of the V4 nations
Mentions, views Figure 9
E-sport in numbers in the V4 countries
The diagram below shows the statistical
results of our social listening survey, the
recognition of the e-sports topic, in the
analysed Visegrád countries.
334200
mentions
As the chart clearly shows, the
recognition and popularity of the 49800 27300
e-sports topic – even allowing for the mentions mentions
different sizes of their populations,
differs for the individual countries. In
117M
access
Poland, the large user base and 35,1M 12M
correspondingly substantial numbers of access access
mentions and views are primarily due to
the large population; but users with an
Czech Republic
interest in e-sports are exceptionally Hungary and Slovakia Poland
active in comparison with the other
analysed language regions whether we
examine them in terms of the absolute or
relative values. Based on our research, Population : Population: Population :
the activity of Hungarian users is also 9,9M 15M 38M
(persons) (persons) (persons)
significantly higher than that of the
Czech and Slovak commenters.
A total of almost 50,000 mentions
appeared on Hungarian-language online Source: PwC Hungary
platforms, generating 35 million views.
The Czech and Slovak content fell
somewhat short of this, as we measured
27,300 mentions and around 12 million Figure 10 A man’s world
view on these online platforms. The Distribution of e-sports mentions
Polish market far exceeds the above by gender Several studies concerned with the topic
figures, with more than 334,000 make mention of the fact that e-sports
mentions in the period under analysis. are generally of interest to male users,
These mentions generated 117 million with the majority of analyses estimating
views. their share at 70-80%. Our social
listening survey also provides evidence of
7% female
93%
male
the male-dominated nature of discourse
on the topic; the distribution of the
mentions by gender leads to the
conclusion that not only are more males
interested in e-sports, but they also
participate far more actively in the online
discourse than female users in the whole
Source: PwC Hungary V4 region.E-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries | 15
Central topics in Hungary
Hungarians are true team
omnivores
The word cloud that emerges from the
online discourse of Hungarian gamers
player
reveals which were the most popular
games in the past six months.
tournament
CS:GO is the most popular game in championship
Hungary, with the present version of
Counter-Strike featuring in 2000 of the
analysed mentions.
Other leading game titles:
• LoL (1729 mentions),
• Overwatch (1275), Hungarian users are far more open to the devices (e.g. Clash Royale) are also
• Hearthstone (1075), various more colourful genres of game absent from the word cloud; interest in
• PUBG - PlayerUnknown’s than their Czech and Slovak, and these titles is lower.
Battlegrounds (1050). especially their Polish counterparts,
because – as we will discuss later on – in Other words featuring in the word cloud
the latter language regions CS:GO almost provide a great illustration of the
completely displaces the other games. It parallels between e-sports and
is important to note, however, that FIFA traditional sports. These are “team”,
as a sports game, and the games that are “player”, “tournament” or
regarded as leading title on mobile “championship”.
Photo by Maxime Rossignol on Unsplash16 | E-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries
E-sports in provincial towns An interesting phenomenon is that A relatively major centre for mentions
mentions relating to the topic are relating to the topic is Debrecen, where
An examination of the geographic “exported” to provincial areas by the the IT faculty of the local university was
distribution of the mentions reveals that, various themed bars/cafés. In Pécs, Győr the first in the country to organise an
in Hungary, almost 75% of geotagged and Szeged, establishments similar to the e-sports championship between
content was generated in Budapest. sports bars of Budapest have opened, universities, and the FIFA e-sports team
Naturally, the capital city has more which make it possible to practice of the local football club DVSC also
events and venues that are specifically e-sports in this form. posted from the city.
concerned with e-sports. Examples of
these include the several e-sports bars The situation is similar in Miskolc, where
and hardware and computer peripheral several posts were generated in
shops that promote e-sports; but the connection with the foundation of a
majority of e-sport-related competitions similar team at the local club, DVTK.
and events are also held in Budapest.
Figure 11
E-sports centres in Hungary
6
DVTK FIFA-
team
Bar of Legends
e-sport bar Debrecen University
E-sport competition
3 + DVSC FIFA-
team
181 7
Main topic:
BarCraft visit
Hardware shops
News, events
2 2
Barcraft Szeged
Bar of Legends
e-sport bar 20
20
Source: PwC HungaryE-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries | 17
Content in the Czech and Slovak languages
Extatus, the Czech-Slovak
The Instagram post of the prize competition, with a Razer gamer set up for grabs
“show team” (Source: Instagram)
In the case of the Hungarian content, it
was observed that the mentions were
generated in relation to many different
topics; there was no central, predominant
game, news item or event in respect of
which an especially high number of posts
was generated.
In the Czech and Slovak analysis, by
contrast, it was observed that the users
always showed a special interest in the
Extatus international (Czech-Slovak)
team. Not only news of the team itself,
but items related to Extatus were also
popular, such as the more significant
international competitions, develop E-sports, a new marketing The Czech website czc.cz, which sells
ments and trends in the team’s primary channel for peripheral hardware and gamer peripherals,
game, CS:GO, and reports on many manufacturers advertised prize competitions for social
websites concerned with professional media followers on several occasions,
e-sports. Among the timeline-trend analyses of the where the prizes were devices that had
social listening survey, we highlighted been used by professional
This phenomenon shows how important the results of the analysis of content in e-sportspersons.
and beneficial it is for a nation to have its the Czech and Slovak language, which
“own” internationally successful, show what an important channel the During the total analysed period – as the
recognised e-sports team (later we will e-sports scene has become for companies graph below shows – the greatest user
see how this is especially true in the case that manufacture and distribute gaming activity was triggered by such a prize
of the Polish market). peripherals. competition, overtaking all the other
e-sport-related posts by a significant
margin.
Figure 12
User activity in social media
1500
13.12.2017
1382 mentions
1250
Razer prize competition on
the Instagram page of
czc.cz.
1000
20.03.2018
750 776 mentions
02.09.2017 IX Gaming YouTube channel’s
592 mentions CS:GO-related video
500
COOL E-sports and eXtatus
CS:GO competition videos
250
0
2017 2017 2017 2017 2018 2018 2018
september october november december january february march
Source: PwC Hungary18 | E-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries
Polish content
Poland, the stronghold of The success of Virtus.pro in Poland has The Boniek “scandal”
e-sports in Central and contributed greatly to the fact that in
recent years not only has the number of Zbigniew Boniek, now retired, is one of
Eastern Europe
fans grown considerably, but an the most famous and successful Polish
The introductory, statistical data have increasing number of professional teams footballers of all time. Boniek tweeted
already revealed that e-sports enjoy have also appeared on the scene, who about e-sports on several occasions
greater popularity in Poland than in the have also been able to build up large fan during the analysed period, taking the
other countries included in the survey. bases for themselves (e.g. GO, CS:GO position that “e-sports is not a sport”.
The deeper content analysis of the online teams).
mentions, however, revealed not only All his comments of this nature went
that the quantitative data represent a The maturity of the Polish market is also viral in the Polish e-sports scene, with
different order of magnitude, but also evidenced by the success of YouTube almost all the major websites concerned
that the Polish e-sports market is also channels associated with the individual with e-sports sharing the news and
more mature than that of the other V4 e-sports, which show match commentary stating their arguments against Boniek’s
countries. and competition summaries (for example opinion.
Rito E-sports or DD E-sports). These
Poland has a CS:GO team that has video channels make very in-depth, Not long after the incident, TAZ (a
achieved major successes at global level, professional summaries that are member of the Virtus.pro team) also
Virtus.pro, the members of which are evocative of traditional sport analyses, to shared a fan’s comment, which said that
real stars in their home country. The which the users also display an obviously professional gamers are now celebrities
most popular and successful player in the serious attitude, and engage in who can mobilise crowds of people with a
team is Wiktor “TAZ” Wojtas, whose professional discourse regarding the single gesture, who have tens of
name is also the most frequently featured videos. thousands of fans and are role models for
word related to the topic – probably a a lot of young people, and thus they
result of his currently pending transfer. With respect to the Polish content, it was certainly deserve recognition. TAZ did
After his matches, his performance is observed that CS:GO, as an e-sports title, not mention Boniek directly in his post,
analysed in the minutest detail, clearly dominates in comparison to the but a connection can be identified
sometimes in comparison with past other games, with one of the main between the two. The post naturally
games. reasons for this being that the most went viral, garnering great success
successful Polish teams all compete in among gamers.
this game.
“E-sport’s a big bubble. I understand
that there’s lots of money in it, but the
whole thing’s a joke. Sitting for hours
on end and
doing battle
with a
joystick?”
Source: TwitterE-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries | 19
Perception of e-sports in the V4 countries Note:
Based on PwC Hungary’s social
listening surveys to date, it can be
One of the great advantages of the social The Polish and the Czech and Slovak established that the number of mentions
listening methodology is that the users have a very positive opinion of the is generally high in these types of study
algorithm is capable of measuring the content generated in relation to the topic. because there is a lot of undirected
emotional charge of the individual The general sentiment of Hungarian conversation regarding the individual
mentions, and determining whether a users was significantly more negative topics in the online space. It is also
given user opinion, expression or than that of the other V4 countries, but important to highlight that, based on our
comment is positive, negative or neutral nevertheless it can be stated that, overall, research to date, a positive mention rate
in tone. the distribution of sentiment is also of over 15% or a negative mention rate
of below 10% can be considered as a
favourable with respect to the Hungarian
clearly supportive user attitude.
In the next section, we take a look at results.
which content and topics gave rise to the
most important expressions of sentiment.
Positive content is hard to judge, because With respect to the positive mentions by
users who are concerned with the topic are 9% 17,5% Hungarian users, there was no prominent
almost always happy to see any content that negative positive topic around which a major positive peak in
relates to their hobby. If somebody sentiment could form, but in general terms
photographs a player at a tournament, or if every minor or major Hungarian success in
an article is published on the gamer scene, e-sports was well-received.
the commenters show a great deal of
enthusiasm.
Hungary
In addition, dissatisfaction was also
Where neutral content is concerned, it is observed due to the high number of cheats
safe to say that, overall, neutral mentions 73,5% that can be found in e-sports games.
were generated with regard to a great many neutral (CS:GO and PUBG are particularly affected
individual topics, due to the informal nature by this.)
of online discourse.
Moreover, it is also a common phenomenon
that communicating users depart from the IEM Katowice was such an important
topic during the individual posts. international gaming event that it also gave
5% 24,5% rise to a relatively high number of positive
In many cases, the mentions analysed in the negative positive mentions in the Czech and Slovak online
online space have low analytical potential media. Masses of videos, competition
due to their low information content, and summaries, analyses and reports were
consequently they are placed in the neutral generated about the championship,
category (e.g. pictures, certain emoji, especially in relation to the Czech teams
abbreviations, slang, etc.) Czech Republic participating in it.
and Slovakia
There was no single, generally prominent
70,5% topic; however, there was a professional
neutral Czech e-sports person(Aleš Kněžínek) who
generated masses of negative mentions.
If Virtus.pro, AGO or any other Polish team
took part in a competition, even if they left
without any major successes, it always
generated a large wave of appreciation and
2,3% 23,7% positive mentions by users.
negative positive
The most popular YouTube channels posted
detailed video summaries of every event.
The bulk of negative mentions criticised the
lifestyle of gamers, highlighting that they set
Poland
a bad example to children, who might get
the impression that you can earn millions by
74% sitting at home inside a curtained room and
neutral “playing”. Certain commenters were
outraged that professional gamers make
statements to the effect that they are “useful
Source: PwC Hungary members of society”.20 | E-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries
The relationship between
traditional sports and e-sports
The relationship between traditional sports and e-sports
If we examine this aspect scientifically, in • Psychology (mental fitness): Besides • Media (coverage of sport in the
accordance with the definitions, then the advanced motor skills, a high level media): The championships or players
stamina, strategic thinking or reaction of strategic thinking, situational generate coverage in the media just
times are just as important in e-sports as awareness and lightning quick like with traditional sports, though
they are in the traditional branches of decision-making abilities are needed; typically, of course, via different
sport. Therefore, just as chess, darts and and all these are usually deployed in platforms.
poker are sports, e-sports can also be the context of a teamwork situation.
regarded as mind sports. • Technology (development of
• Structure and competition system equipment and clothing): The quality
E-sports adopts, from traditional sports, (organisational structure) Various of the gamers’ devices is very
numerous factors that strengthen its teams play against each other in important, just like Formula 1 motor
claim to be treated as a sport: leagues, where there are also racing: you need a car as well as the
championships at regional and global driver. The right kind of chair, for
• Physiology (physical fitness): level. The matches are watched by tens example, is just as important to a star
Comprehensive training is just as of thousands, and sometimes millions player of Overwatch or Dota 2 as Roger
important here as in classic sports, of viewers, and their fairness is Federer’s tennis racquet or Lionel
which is why the professional teams overseen by a referee. Messi’s football boots.
have also incorporated physical
training plans into their programmes. • Community (institutional
An e-sportsperson can perform up to affiliation): Similarly to other sports,
400 keystrokes or mouse manoeuvres in e-sports too, every team has its own
per minute, which is four times the base of fans, and there are also bars
number of actions performed by an that specialise in showing e-sports
average computer user. tournaments.
Photo by Dominik Kuhn on UnsplashE-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries | 21
Traditional sports clubs in e-sports
The number of teams that play
Figure 13
traditional sports and also have a direct Total Sports teams invested or who have an interest in e-sport directly through
or indirect interest in e-sports, in the players or teams
outstanding performance of e-sports
players, or in the sponsorship of teams
now exceeds 200, and this figure is NBA Basketball teams with Australian A-League teams with
growing at an exceptionally rapid pace. an e-sports player 2 fifa players
Sports teams entered in to the
This February, FC Barcelona announced
that it would participate in the first ever
VFO FIFA League
7 9
Sports Teams indirectly
Pro Evolution Soccer 2018 gaming
championship. After this, it is hardly
6 involved or invested in
e-sports
surprising that the smaller clubs are also
moving in this direction. Dutch Football clubs 49
with FIFA player
In line with international practice, the 18 Total
trend for traditional sports associations
to establish e-sports teams has also
199
French Football clubs Sports teams with at
started to take hold in Hungary; the with FIFA player least one e-sports player
or team
pioneers in this country are MTK
(Budapest), DVTK (Miskolc) and Honvéd
18 92
(Budapest), but DVSC (Debrecen) also
has a formidable FIFA team, and most
recently FTC and UTE also launched Source: Reddit.com
their own e-sports sections.
Examples of sports clubs with e-sports teams:22 | E-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries
“The idea of creating the MTK E-sports Team came up during a friendly
conversation. The initial idea took shape after a bit of planning, and
last September we contracted the best FIFA players in the country, then
in a pilot scheme we launched our pro-clubs FIFA team (in pro-clubs
game mode, every character is controlled by a different player). The
launch went so well that last year we came second in the domestic
pro-clubs championship. Encouraged by this success, we have decided to
also compete in the 1v1 game, and we will be debuting in this at the
beginning of May (in 1v1 game mode, a single player controls the whole
team of 11). The decision to choose FIFA was motivated by our desire to
adopt the online version of a game that the fans of traditional sport
also know and love. We hope that the overseas model will take hold
here too, and through e-sport we will succeed in winning back young
fans who have dropped out of the traditional football scene. Besides
this, another objective is to get the media on side. MTK is negotiating
with several channels regarding the broadcasting of e-sports matches.
Alongside our achievements in Hungary, we would also like to attain
international successes. In partnership with an events management
company, we plan to hold a championship in our stadium as soon as
this year. And next year we expect to add another game to our
portfolio. Precisely what game this will be has yet to be decided, as
there are lots of factors to weigh up. We wouldn’t like to be associated
with a game that is seen to be controversial, hard-to-follow or violent.
Incidentally, we are not only targeting the 15-25 age group that is
regarded as the classic e-sports fan base, but also the over-40s. I know
from my own experience how exciting it can be to see how the game
that I myself used to play when I was younger has developed.
In business terms, so far the section has no significant revenue; but a
sponsorship agreement was recently concluded with a Hungarian IT
company, and we hope that as the team develops more sponsors will
follow. At the moment, for example, a financial institution is showing
serious interest in the team.
The question of whether there is any need to channel e-sports into the
frameworks of traditional sports is often asked. Along with a number
of experts, I don’t believe this is necessarily a requirement. I believe
there is a realistic possibility that, based on a well-defined set of rules,
under certain circumstances, an “e-Division 1” could be created in
collaboration with the Hungarian Football Association (MLSz). This
will require determined advocacy, however, because feelings of hostility
towards e-sports are still encountered within the traditional sport
professions.
The future certainly holds considerable business potential. However, I
cannot predict which games will be the vehicle for this expected success.
Here in Hungary, if the government’s interest is maintained in the years
to come, our prospects are very encouraging.”
Péter Szegő
Head of the MTK E-sports TeamE-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries | 23
Should e-sports be treated as sports?
The upward curve of the branch of sport The recognition of e-sports as an official The e-sports community, however, is not
is shown by the fact that medals will be branch of sport, incidentally, is lobbying for its activity to be recognised
awarded for e-sports in the forthcoming progressing at a different pace in each as a sport – they say that they do not
2022 Asian games. Beside this, the hot country. At present, there are more than need the obligations that this entails.
topic among audiences is whether 60 countries where e-sports is classed as Moreover, the difference between MOBA
e-sports will be accepted as an Olympic an officially recognised branch of sports. and FPS is greater than that between
sport in time for the 2024 games in Paris, These include, among others, China, the running and motor racing, so it is not
which would send a clear message out to USA and South Korea. In France, the certain that the two would be able to
the sceptics. same labour-law and residency-law rules coexist well within the framework of a
apply to e-sportspersons as to single federation. According to members
Our social listening analysis reveals that professional sportspersons engaged in of the community, the general norms are
the acceptance of e-sports as “traditional” traditional sports; but at the same time, already informally in place, and it would
sports has been the subject of debate for a e-sports is still not explicitly recognised not necessarily be a good thing for
relatively long time now, both within the as a real branch of sports. e-sports, which currently operates on a
gamer community and outside it. The market basis, to be subdivided into
inclusion of e-sports in the Olympic In legal terms, e-sports is currently not federations similar to those of traditional
Games would represent a form of one of the official branches of sports in sports. They confirm, however, that in
high-level legitimation for e-sports. Hungary. Recognition as a sport, the long term it will be necessary to
however, would have tangible positive commit to some kind of structure.
Although this topic did not generate a aspects. Digital sports would be able to Overall, however, we are seeing that it is
high number of mentions, the majority of share in the sport funding provided by more important for the traditional sports
such opinions concur that e-sports federations, and non-profit sports clubs to channel e-sports in their own
includes games that are not necessarily could receive tax breaks. With these direction; because after all, they are the
suitable for the Olympics. Even benefits, and by ensuring employees’ ones whose audience is aging
supporters of e-sports; that is, users who rights, the base of e-sportspersons could dramatically.
would include it among the traditional be further expanded.
sports, tend to be in favour of the
establishment of its own events, Figure 14
competition structure and system. Viewership demographics for top properties
A positive phenomenon related to the
topic is that the number of people who PGA Tour 64 +5
completely reject the legitimacy of
e-sports, or their nature as competitive ATP Tour 61 +5
sports, is negligible.
Major League Baseball 57 +4
Women’s Tennis Association 55 -8
NBA 53 +3
Olympic Games 50 +4
National Football League 49 +7
National Hockey League 43 NA
Source: Facebook
English Premier League 42 +2
39 +4
International football
Median age of TV viewers in 2016 Change since 2006
Source: PwC’s Sports Survey24 | E-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries
“
The Hungarian Government is working
to leverage the opportunities offered by
e-sports, and develop a national digital
sport strategy as part of the Digital
Welfare Programme, and in its role as Sport is another part of our lives that is being fundamentally affected
regulator, to react quickly to the needs of by the digital transformation. In order for Hungary to maintain its
the new industry. outstanding international success in the traditional fields of
competitive sport, continuous digital innovations are needed in the
area of sport as well. These can be used to give an improved sporting
performance. For example, a unique digital technological innovation
that improves competitors’ cornering technique contributed to the
Olympic gold win of our short track speed skaters. Digital innovations
can be used to bring the “sporting experience” closer to young people
who are starting to drift away from traditional sports. Traditional
sporting events supported with virtual and augmented reality, and the
new generation of smart stadiums, together with e-sports, represent
excellent opportunities for traditional sports to retain and attract
young fans. This is because such tools can mobilize large numbers of
people who would not otherwise take part in sport-related community
events.
E-sports help to strengthen skills that also make a substantial
contribution to the development of digital competencies and digital
literacy. Besides this, digital sport and e-sports offer excellent
opportunities for Hungarian technological startups, whose
developments can easily go on to achieve international successes.
Another interesting question is whether e-sports will remain
technology/platform/publisher-dependent in future, or whether an
integrating platform will emerge that is capable of unifying the
market.
Many people ask me why we launched our efforts for the development
of e-sports in the context of a V4 initiative. The V4 countries and
Germany have traditionally had a close economic and cultural
relationship. Germany is one of the drivers of digitalisation in Europe,
while the V4 countries make up the most dynamically developing region
in the EU, so it was self-evident that the V4 countries would be
Germany’s digital partners when it came to industry 4.0, 5G, or
e-sports.
It is my conviction that if Hungarian e-sports will be a part of the
Hungarian system of sports institutions with equal rights and status,
this could contribute to a strengthening of Hungarian sports. I consider
it important for e-sports to be defined as sports in the Act on Sport. A
positive change such as this could greatly assist the Hungarian e-sports
community in growing to become one of the leading forces in the
European market.”
Tamás Deutsch
Deputy chairman of the Hungarian Olympic Committee, president of the National
Federation of Sport Associations, chairman of the MTK football club and Prime
Minister’s Commissioner for the Digital Welfare ProgrammeE-sport's moving into the big leagues – A business study of the e-sport market in Hungary and the V4 countries | 25
Challenges
The loot box problem
The unregulated e-sports market, are not classed as gambling. The It seems to be in the interest of
accessible by everyone, poses a very regulation, however, is not consistent and participants in the e-sports market to
serious problem in that it can lead to every country sets its own boundaries; so eliminate such problems, so further
addiction, which is particularly dangerous in Belgium, for example, loot boxes are regulatory steps can be expected in the
for the young. Without appropriate treated as a form of gambling. near future.
regulations or follow-up monitoring,
young people are spending thousands of Due to the criticism they have received,
The loot box is a consumable virtual
dollars either on in-game purchases or on the games publishers are also trying to
item that can be used to obtain further
websites operated by third parties. do something about the phenomenon.
virtual game elements in a random
For example the publisher of CS:GO,
manner. The game elements expand the
Dr. Mark D. Griffiths, an expert on game Valve, has introduced a rule that freshly range of opportunities for customising
addiction, explained that the loot box acquired virtual plunder may not be sold the player’s avatar, for example, but can
system of rewards is very similar to the commercially for seven days. This could even used for the purpose of obtaining
way slot machines work, and accordingly, be effective because the majority of equipment such as weapons or armour,
buying them can lead to addiction. (such gambling-based websites rely on the which could alter the course of the
as when a player finds an in-game loot box ability to trade high quantities of items game. In most cases these boxes can
of unknown content that requires very frequently, and not on maximising be purchased using points acquired in
payment to unlock). Despite this in his the amounts received from the individual the game or with real money.
country, the United Kingdom, loot boxes bets.
Cheating
Cheating in games; that is, manipulation Doping, however, is a real problem At the should be looked for in the event of which
of the program, is not a problem. Attempts competitions, referees watch and perform suspicious behaviour patterns. All of this,
can be detected during the competitions. random testing for possible drugs that as in the case of the traditional sports in
If cheating is found to have taken place, boost concentration, such as the non- the past, is dangerously unregulated for
the player concerned is banned from the prescription product Adderall, in the the time being.
league, and often his or her account bodies of the players. However, we can
linked to the game is blocked, which has find no clear guidelines regarding
sufficient deterrent force. precisely what kind of other materials
Protecting the physical and mental health of young people
Mental development furnish them with various advisory Developing physical fitness
warnings. First-person-shooter games and
In e-sports, many players and fans are still the e-sports events related to them are The physical health of gamers, similarly to
minors, so those who fear for the health of subject to age restrictions. This is traditional sports, is an important success
our children, mostly on the basis of supervised by the PEGI in countries of the factor during a game. Most teams make it
stereotypes, regularly make their voices European Union, and the ESRB in the compulsory for players to regularly visit
heard. It is often claimed on various United States. Furthermore, the social the gym, because in order to give 100% in
forums that aggressive behaviour and integration of young people can directly a game they need to keep their bodies fit
social isolation can be observed in gamers benefit from the fact that they have to as well, and in this way they also set a
as a response to first-person-shooter cooperate and communicate in the course good example for their fans.
games, but these claims are refuted by a of the game. Besides this, several
whole series of independent research grassroots organisations provide venues
studies. To protect the psychological and common events for the gamers, where
development of young people, strict they can also meet up in person.
organisations censor the games andYou can also read
