It’s been more than forty years since the first video game tournament was held. Back then no one would believe that games would become highly competitive sports, but they did. Follow us on the exciting journey through the history of esports from 1972 until today.
Prologue – eSports a brief history
For those that are born in the nineties and after, competitive video game tournaments are just a part of the daily life. We’ve had access to internet and a wide selection of video games since birth. If we however were to travel back in time and visit the seventies to witness how the history of esports started, it would be a whole other story.
One of the earliest games ever created is the famous arcade and table tennis game Pong, which was released by Atari in 1972. This black and white game consists of a square, two straight lines and a couple of dots. Imagine a simple game like this being headline news and then add the fact that internet wasn’t invented until the late eighties.
If we back then would mention that video games would become highly advanced with a competitive scene that’s worth hundreds of millions of dollars, they would probably call us crazy. The advancement in eSport we have been witnessing the past forty years is quite an astonishing one. Sit tight, keep reading and we will tell you everything about how eSport came to be a million dollar industry, how betting has played a part in it and what you can expect from the future.
The first tournaments in the gaming history (1972-1989)
It all began in October 1972; gaming history was made and eSport brought into the world as a group of Stanford students took part in a competitive tournament in Atari’s arcade game Spacewar. Back then no one knew what the term eSport was and to actually call the game an eSport may be quite an overstatement from our side. There were in fact no more than 20-30 participants and the prize pool (well, if you can call it that…) was a one year subscription to the magazine rolling stone.
It wasn’t until 1980 that we first experience a large scale tournament, which became a milestone in the history of eSports. This was a championship held for the renowned Space-Invaders; an arcade game created by Atari that had people standing in line at arcade halls. A stunning 10,000 people attended to this tournament, which is no wonder considering the unbelievable prize pool of $50,000.00. This and a couple of similar tournaments that were held the following years, came to be the seeds that would grow today’s huge competitive video game scene.
During this important period of gaming history, competitive tournaments and video game players were mentioned in popular magazines. There was also a television program aired between 1982 and 1984, where contestants competed in beating each other’s high scores in various arcade games.
The rise of internet and birth of eSport (1990-1999)
Continuing the tale of the history of eSports, competitive tournaments became more and more common in the nineties. In the beginning of the decade, Nintendo was hosting a world championship for their 8-bit console, NES. In this players had to compete in specially created mini-games based on the famous titles Super Mario, Tetris and Rad Racer for a remarkable first prize of $10,000.00. In 1994 they held a second world championship, but this time for the 16-bit console, SNES.
In the late 90’s, internet had become widespread and fast enough to allow the flourishing of online gaming on PC. This is the period in gaming and esports history when competitive gaming took a serious turn into becoming a sport and could be considered the true birth of eSports. Professional gaming organizations, such as CPL were founded. These hosted tournaments for several different games, including Quake, Counter-strike, Warcraft and Starcraft. Among these tournaments held in the late nineties, you could find a $15,000.00 one for Quake and a massive $46,500,00 one for Starcraft. Although surprisingly not as much as the Atari tournament in the 80’s, these were still huge amounts in that point of gaming history. It was however just pocket money compared to what was about to come.
Million dollar prize pools and Twitch introduced (2000-now)
Professional gaming organizations continued to be formed in the early twenties. We experienced the birth of Electronic Sports World Cup (ESWC), World Cyber Games (WCG), Major League Gaming (MLG) and Electronic Sports League (ESL).
With several tournaments being hosted, in a variety of different games, by all of the different gaming organizations, they brought the eSport industry to the next level. Between 2000 and 2010, we witnessed prize pools increase to stunning amounts of a hundred thousand dollars and more.
It was however not until after 2010 that the eSport industry started to show a tremendous growth. The online streaming service, Twitch was launched in 2011 and has since then played an important part in the growth of eSport. As competitive video game tournaments are being streamed live through this platform, anyone can watch the professional teams play, which has contributed to the more than 300 million people watching eSports today.
Not only did the amount of viewers set off after 2010, but the number of tournaments increased and the prize pools in them reached unbelievable amounts of millions of dollars. The reason for this is that game developers recognized the potential of the eSport industry and began taking their games in that direction.
League of Legends, a game released in 2009 and considered the most played game ever, have had six tournaments with prize pools larger than $1 million. The largest one to date is last year’s championship that had a stunning $5 million up for grabs. Although this is a lot of money, it’s nothing compared to the prize pools in Dota 2; a game in beta since 2011 and fully released 2013. For this game you’ll find ten tournaments with prize pools larger than $3 million, whereas the largest one is a sensational $24 million.
How betting has affected the industry (2010-now)
Along with the numerous eSport organizations and the launch of Twitch in 2011, the introduction of betting has had a great impact on the eSport industry. We’re not certain when the first bet was offered by an established betting operator, but it’s likely that it was in 2010. This is when Pinnacle, one of the first operators to introduce eSports betting had their first eSport bet taken.
The market research company Newzoo has estimated the value of the eSport industry to reach $696 million this year. This is however with betting revenues excluded and as traditional sports have higher revenues for betting than other areas, this might very well be the case for eSports as well.Unfortunately there are no numbers available of the betting revenue, but Pinnacle has at least released numbers showing how the amount of eSport bets have increased from 2010 until today. Their first two million bets took them as much as six years to reach, whereas the second cycle of two million bets only took 11 months. Although we don’t know the amount, this is clearly showing how the revenue for betting has been rapidly increasing.
Although not everyone supports betting, the introduction of it has clearly benefited the industry. For a lot of people the option to bet on professional matches make them a lot more interesting to follow. Not only that, but several sponsorship deals have been formed between eSport betting sites and professional eSport organizations, which means that the professional teams receive an economic boost.
A paradigm shift in sports (the future)
It’s very clear that the eSport industry has had a tremendous growth during the past 40 years and what’s really interesting is the fact that it really didn’t take off until 2010. This means that the industry is still a very young one, which has given birth to some interesting thoughts for the future. While some believe that eSports has too many limitations and therefore won’t grow that much bigger, others believe that video games eventually will replace traditional sports.
Whether this will happen or not we have to wait and see, but the fact is that there has been a paradigm shift in sports. If we take the 24 million dollar prize pool in Dota 2 as an example, this is way more money than can be won in the Super Bowl for American football, the Masters in golf and the NBA in basket.
Furthermore, the company L.E.K has carried out a survey that shows that people aged 18-34 has about the same interest for eSports as traditional sports, whereas people over 34 clearly prefer traditional sports. This may not come as a surprise, but what’s interesting is how these numbers will change over the next years.
These days more or less everyone growing up has a smartphone or iPad to play games on, which no one older than 20 years had. This is quite fascinating as young people are growing up with the possibility to play games whenever they want, wherever they are. If we now add the fact that there is a growing market for eSports on mobile devices, the future sure is looking promising for a continued eSports growth.
We have already witnessed several mobile games becoming an eSport, such as Vainglory, Hearthstone and Clash Royale. On top of this, there is a new game called King of Glory, which you could say is the mobile version of League of Legends. At the moment, the majority of the player base is located in China. What’s fascinating about this is the fact that there already are more than 50 million unique players every day and that the game is making a monthly revenue of about €400 million. These are higher numbers than League of Legends, one of the most popular eSport games to date.