Market analyst Newzoo estimates
a 34 percent revenue growth for this market in the near future, from $493
million in 2016 to $660 million in 2017.
The e-sports business may have financial
potential, but it is disorganized, warns Jurre Pannekeet. The 27-year-old Newzoo
market analyst has firsthand experience. He dabbles in tournament play himself
in his favorite game, “League of Legends.”
“It’s not anything close to mature yet,” he said
of the space. “We’ve only just passed the initial phase of a lot of growth and
The two or three top-level games have leagues
operated by games publishers, such as the League of Legends Championship Series
(LCS) run by Riot Games. These are well-funded, relatively established leagues.
However, the lion’s share of the activity occurs at the amateur and casual
levels, where players are hungry to form their own teams and play in
tournaments. This is a fragmented ecosystem.
For it to function well, this community must
operate cohesively. Players must be able to find each other and form teams.
people around you that have the same mindset and want the same intensity and
frequency isn’t as easy as you’d think,” said Pannekeet.
Then, someone must organize tournaments and
ensure that winners are paid. Pannekeet talks of past disputes where players were
left chasing organizers for winnings. In 2016, for example, Invictus Gaming claimed
that it had not been paid for participation in an event. In another case this
year, an e-sports tournament organizer blamed a
sponsor for failing to pay up.
Some traditional websites are tackling these
challenges on a piecemeal basis, said Pannekeet. For example, Teamfind
helps gamers to find each other, and FACEIT enables
people to organize tournaments at the amateur and casual levels.
But Pannekeet argues that these sites only
address part of a broader organizational challenge for e-sports. He sees an
opportunity for blockchain technology to solve them all at the less-supervised
amateur and casual levels, especially in areas such as payments, where
organizers could stoke accounts with winnings in advance.
“Having that technology with automated contracts
where you can have all those payments and other things automated could really
help this industry,” Pannekeet said. “With all those things being done
automatically, I can see a very big role for blockchain [technology] in that
regard in e-sports.”
Ethereum-based blockchain startup DreamTeam
hopes to manage the entire e-sports value chain using a decentralized model. It
plans to match players and provide tools for team coaching. It will manage
sponsorship and media rights, along with salaries and even processes such as
The firm, which has partnered with blockchain-based
virtual gaming goods company DMarket, hopes to handle these transactions using
its own DreamTeam token. It completed the first phase of its token sale this
month and plans for phase two in early 2018.
Unlike conventional sports, where data about
players and games must be manually collated, all the data about players and
team performance could be automatically encoded in a blockchain. This creates
an interesting opportunity for DreamTeam, which hopes to sell analytics data
generated by all these blockchain transactions.
The value of that data should not be
underestimated in an industry that Newzoo predicts will reach $1.5 billion in