As esports continue to grow in popularity and make their way into mainstream media, people who aren’t familiar with the history of esports may think it came out of nowhere. In reality, esports have origins dating back to the 1970s. Since then, the esports industry has quickly expanded in both participation and viewership. But despite its growth, peoples’ understanding of esports is still limited.
So, what exactly are esports? Esports, also known as Electronic Sports or Competitive Gaming, is a virtual sport where individuals and teams compete in video games for money and fame. Most people participate in these games on a PC, but competition can be on any gaming console.
This form of electronic entertainment began when pinball competitions were held throughout the world, and the word “esport” was already in use. However, live audience numbers of 5 or more digits spectating matches online today is something entirely new.
Esports and the gaming industry as a whole have come a long way in recent years, even compared to just a decade ago. Video games were merely another type of entertainment before, but they’ve become their own entertainment universe and grown into a multi-billion dollar industry.[m1]
So, how did we get from leisurely playing our Nintendo 64 to creating an entirely new league of sport? Let’s take a trip down memory lane to retrace the history of esports.
The Beginning of Esports: Early Developments of the ‘70s
The beginning of the history of esports: Stanford, California, October 19, 1972. Stanford University staged the first official video game competition. At this event, gamers played Spacewar, a space combat game first developed in 1962. The students in attendance had a chance to win a year’s subscription to Rolling Stone. At this point, competitions were held for the highest score because there was no multiplayer.
This event marked a new era of video game competition, and set the stage for gaming for the rest of the ‘70s. Competitions continued throughout the decade. In 1978 gaming giant Atari held the first international Esports tournament for their football video game. This competition was followed by Atari’s Space Invaders Championship in 1980, drawing over ten thousand individuals.[m2]
Electronic Sports Player ranking is born
Now that esports were gaining international attention, there needed to be a way to keep track of wins, high scores, and more. In 1980, Walter Day launched Twin Galaxies, [m3] a global database to keep track of all known gaming records. With the help of a record-keeping organization and the Guinness Book of World Records, a worldwide competition for the top score was born.
Player ranking and progression can be a challenging and contentious topic. The industry will see many different approaches to try and solve the problem.
In addition to the rising popularity of professional gaming competitions, consoles were also at their peak during this time period. Magnavox Odyssey was the first gaming system that could be connected to a TV screen,[m4] a moment that marked change in the course of the home gaming. Arcade consoles were also developed for home use, with Pong, Sea Wolf, Asteroids, and Starfire becoming accessible to a new generation from the comfort of their couch.
All in all, the 70’s became a defining decade in the history of esports and gaming industry as a whole.
A Bump in the Road: The Video Game Crash of 1983
The gaming boom of the 70’s caused more and more businesses to enter the video game market. As a result, the market was swamped with new games due to an overestimation of demand. Poor quality control and waning interest sparked a gaming slump in North America between 1983-1985, causing worldwide gaming revenue to fall significantly.
Video game industry under scrutiny
However, this wasn’t the only problem the industry was seeing. While many viewed gaming as a popular trend, it also became criticized for its addictive properties. Not for the last time in the history of esports and video games, industry experts claimed that young people were becoming jaded. According to the New York Times in 1983, youth needed to turn back to more “conventional, non-electronic” forms of entertainment.[m5]
The launch of the NES helped the video game industry withstand it’s recession, revolutionizing the way video games were played, controlled, graphically represented, and played. However the ‘80s were no where near as successful as the ‘70s.
The Internet Takes the 90s by Storm, and Esports
The birth of the Internet affected many industries, especially gaming. Esports saw a surge in popularity as the Internet caused more games to become available to everyone around the world. New firms like Nintendo and Blockbuster Video began to get involved, creating innovative games that have made a lasting impression to this day.
Studios make video games accessible
For families worldwide, Nintendo made video games more accessible, while simultaneously promoting competitive gaming. At Universal Studios in California, the Nintendo World Championships took place in 1990, after which they toured the United States. To promote the SNES, Nintendo held a second World Championship tournament in 1994. San Diego, California, hosted the international finals of this competition. During this decade, Nintendo also released the first versions of now classic video games such as Super Mario Bros., Tetris, Sonic the Hedgehog, and Virtual Racing.
Groundbreaking innovation drives esports competition
Other franchises such as Doom and Quake also saw their birth in the ‘90s. ID Software’s first-person shooter Quake was a technical marvel, powered by a custom engine created by the game’s developers. At the time, it was groundbreaking for an FPS game to include six multiplayer maps.
Its maps with numerous layers were created by ID using the latest advances in 3D technology. This meant that players had to learn all the paths, weapon spawns, and movement patterns to play. It took hours to master Quake. As internet connection speeds grew, so did the number of possible opponents to frag. This level of competition was unprecedented.
As consoles and computers continued to advance throughout the decade, so did competitions, as the Internet allowed more and more players to compete against each other. The Red Annihilation was one of the Quake events that occurred in May 1997. Over 2000 people competed in Quake one-on-one because of the Internet, but eventually, the field was reduced to 16 participants.
The World Congress Center in Atlanta, Georgia, hosted the Electronic Entertainment Expo, where the remaining 16 players competed. A wide range of media outlets, including newspapers and television stations, covered the event, both in-person and online. Dennis “Thresh” Fong emerged victorious, cementing his legacy as the tournament’s top prizewinner. The grand prize was a Ferarri 328 GTS, previously owned by Quake programmer John D. Carmack.
As a result of the internet, we saw esports gain more momentum than ever in the ‘90s, setting the stage for a new century of gaming.
Esports Enters a New Century: Gaming through the 2000s
In the early 2000s, everything was in place for esports to make a significant leap forward. The popularity of video games and online gaming continued to rise, and internet cafes began appearing all over the world.
PC gaming dominates history of esports
The history of esports saw many tournaments throughout the early 2000s centered around computer games, including new versions of established games that were released for computers. A number of RTS games such as Age of Empires III, Starcraft III, and Warcraft III were dominating the global scene.[m6]
The battle of video game consoles
However, all attention turned to consoles after 2005, when Microsoft’s Xbox released huge game titles such as Halo 2. Sony’s PlayStation didn’t want to be left out of the ring, so it set out to carve out a niche for itself with other similar games.[m7]
Tournaments began offering up to $1,000,000 in prizes for these popular games, and gamers started to show up. From that point on incentives rose, advertisers became more interested, and all platforms wanted a piece of the action.
A Mainstream Phenomenon: History of esports through the 2010s
If there was a specific period when esports became a mainstream phenomenon, the 2010s were it.
By 2010, the number of tournaments organized worldwide had more than doubled from just a few dozen in 2000. By the middle of 2011, a slew of new streaming-specific gaming services had emerged. Esport competitions and individual players alike used Twitch to reach a wider audience. For the first time in the history of esports, the number of people streaming games reached 45 million.
Esports sponsorships increase
There was also an increase in the number of sponsors who became interested in the streaming sector. As esports stocks and markets continued to rise, computer manufacturers, food and beverage manufacturers, and telephone manufacturers, began sponsoring both large and local esport teams.
For a while, DotA had been the most popular multiplayer online battle area (MOBA) video game. Now League of Legends is the most played in competitive gaming. Even the government has acknowledged its players as gaming professionals. Esports games, such as FIFA, Dota2, CoD, and StarCraft II were also gaining traction.
New competitive video game titles emerge
Brand new games continued to emerge throughout the decade: Players Unknown Battlegrounds (PUBG) ushered in a new Battle Royale genre, and by 2019 Fortnite became the most popular esports game of the year and hosted its first major event. The 2019 Fortnite World Cup attracted over 2 million spectators as they watched players compete for a $100,000,000 prize.
Now that we know how esports got to where they are today, let’s take a look at some of the most popular games in esports.
What is the future outlook for the esport industry?
According to Insider Intelligence, the worldwide esports sector is expected to produce approximately $2 billion in revenue by 2022. [m8]
Advertising on the rise
Media deals, sponsorships, and broadcasting rights produce the lion’s share of esports money. In August 2021 alone, we saw the new advertisers step into the space:
- Amazon (European Masters)
- NASCAR (Allied Esports)
- Discord (Tribe Gaming)
- TUMI (Evil Geniuses)
- Doritos (Bacon Time)
- Mastercard (League of Legends European Championship)
These multinational brands have invested significant fresh capital and interest in the industry and will almost certainly help drive expansion by negotiating larger venues and media distribution arrangements.
Tablets and smartphones are the future of esports, and are a way to remove esport entry barriers to make the industry more inclusive. While console gaming remains popular, the great majority of people use an Android or iOS device on a daily basis. Because of this, mobile gaming proves to be more popular than console and PC gaming combined, accounting for 57% of the worldwide gaming market’s $173 billion revenue. There are two significant conclusions to be drawn from this data:
First, organizations and developers focused on mobile esports have a larger growth runway than those catering exclusively to serious gamers (e.g., PC and console gamers).
Second, esports as a whole accounts for less than 1% of the global gaming market.
Worldwide Market Growth
According to Insider Intelligence, the Asia-Pacific (APAC) market is the largest in the esports business, accounting for 57% of worldwide esports viewing in 2019 and home to an amazing 1.5 billion players.
By comparison, the European market is less saturated and is home to many gamers who have not yet discovered esports. Europe accounts for approximately $138 million of worldwide esports income. Along with Latin America, organizations who focus on the European esports market have the potential for long-term sustainable growth, given the industry’s current state of development in these regions.
Although contentious, betting has emerged as a new revenue stream in esports. Given the esports industry’s predominantly young demographic, there’s hostility to the idea of institutionalized betting on the sport. However, betting and gambling already occur on at institutional levels in traditional sports, to which young people are already exposed.
Future cooperation between esport corporations and betting organizations may enable the industry to oversee and regulate esports betting appropriately, curtail the grey market, and generate considerable new revenue.
Esports Continues to be the Next Big Thing
For the first time in the history of esports, the 2019 League of Legends World Championship attracted nearly as many viewers as the Super Bowl – it’s pretty hard to ignore esports as an industry! Both virtual tournaments and esports events at esports arenas continue to become wildly popular destinations for spectators.
New startups continue to emerge to address the industry’s gaps, like Esports Tournament Network and its novel blockchain-enabled Universal Player Ranking system and a virtual esports arena with Arena Seats NFTs. ESTN is driving the convergence of esports and GameFi, or the combination of video games and cryptocurrency and models like play-to-earn.
As the industry continues to see increasing mainstream adoption, even more opportunities will emerge as the sport evolves around the demands of the audience and the video game titles spectators want to watch. It’s safe to say the history of esports isn’t finished being written and the best is yet to come.