Building a Foundation for Esports

Despite being the most prominent esports market in the world (Statista), the United States does not place in the top 30 markets with the most significant proportion of exclusive esports followers (YouGov). The fandom around esports has yet to catch on in the US compared to other countries worldwide, namely South Korea, where esports professionals are sometimes treated like A-list celebrities (Esports.net).

Esports in the US has struggled for a multitude of reasons, including cultural perception, business models, and relationships with publishers. However, most of these reasons, if not all, can be alleviated by building a foundational fan base for esports.

In this piece, we want to take a small step back and look at competitive gaming outside of professional esports, highlighting its growth in the US, specifically within academic institutions, and provide some thoughts on how this foundation of competitive gaming could lend itself to a more robust esports ecosystem in the long run.

Competitive Gaming in Academic Institutions

Multiple institutions are spearheading the expansion of esports at academic institutions today:

• National Association of Collegiate Esports (NACE): NACE is a nonprofit membership association of colleges and universities with varsity esports programs. NACE helps organize competitions, verify enrollment and enforce eligibility, and provide other support for members. NACE currently has 260+ member universities, up from 170 universities in 2022, representing a 53% increase in membership. This group of 260+ universities represents ~9% of the 4-year colleges in the US, up from ~6% just two years ago.
• High School Esports League (HSEL): HSEL claims to be the largest and longest running scholastic esports organization for middle and high schools. HSEL aims to integrate esports into the school environment to foster a passion for games and provide a platform for students to develop critical skills such as teamwork, communication, problem-solving, and resilience. HSEL currently has over 50,000 students competing across 6,000+ partner schools (which is ~16% of the 13k middle schools + 24,000 high schools).

Organizations like NACE and HSEL are crucial to helping expose students to esports at an early age and foster a grassroots approach to making gaming a more significant part of mainstream culture. However, even with these organizations advocating for esports, a technological barrier still exists in the market today.

Modern video games often require powerful personal computers (PCs) to run, and this is especially important when playing competitively, as every ounce of performance can be the difference between success and failure. Similarly, latency is extremely important; a stable and fast internet connection is required. For the average gamer, it is not feasible to buy a $2,000-3,000 gaming computer and have top-speed internet at home, which creates a barrier of entry into the world of competitive esports for the youth of America.

In South Korea, this was not an issue given the widespread access to “PC Bangs,” internet cafes dedicated to gaming. In 2009, South Korea had ~22k PC Bangs, which equates to 1 room per 2,300 people (Korea Herald). For context, in 2021, the US had one supermarket/food and beverage retail store for every 2,200 Americans (Statista).

Universities: Gaming Facilities Help with Recruitment

One of the tangential benefits of having an esports team on campus is the facilities used to host the teams and the computers within them. These facilities range from piecemeal computer labs with a few PCs to massive facilities with hundreds of PCs, stages, and multiple rooms. Moreover, some of these facilities are used by the community to host high school gaming teams or even local summer camps.

Student benefits:

• Opportunity to play games competitively
• Access to higher quality computers and infrastructure for games or other high CPU usage activities (e.g., CAD modeling or simulation)
• Creates an in-person community for a typically remote (yet competitive) community of gamers at colleges

College benefits:

• Acts as a recruiting tool because students are increasingly choosing schools with gaming facilities over schools that do not (it is yet another differentiator for colleges)
• Access to higher quality computers/infrastructure for non-gaming use cases (typically education-related)
• Access to local communities via youth programs and summer camps (good for community engagement and future recruiting)

We believe that these facilities are proving their ability to benefit students and universities and could be a major boost to the competitive gaming scene in the years to come.

Esports: Leveraging This National Infrastructure

The current professional esports landscape has struggled to gain meaningful traction in the US for a multitude of reasons, including cultural perception, business models, and relationships with publishers. We believe that more broadly distributed gaming facilities could alleviate some of these pressures by changing this country's cultural perception of esports. In the same way that college sports lead the way for pro leagues in traditional sports (Heartland College), we expect to see this play out in competitive gaming.

Dedicated gaming venues and exciting stages for competition will help elevate, normalize, and legitimize esports as a serious pursuit for the youth in this country. This will also help shift cultural perceptions and encourage more gamers and non-gamers to participate. Placing gaming facilities in universities also opens the door for the local community to access these venues, which exposes a younger audience to the sport, further broadening the audience and ingraining the sport into society.

• Business model: The current business model for professional esports in the US is still evolving but largely revolves around sponsorship dollars that are less reliable than dollars earned from selling media rights, as seen in traditional sports (BCG). Building out a large core fan base at universities and beyond will help to drive the audience required to make media rights more meaningful and make businesses built around esports more stable.
• Content access: While we believe that developers are already moving to a more player friendly content environment (A Shifting Esports Landscape), we believe that having large community centers around esports teams will broaden the fan base and talent pool further encouraging developers to provide their content more readily.

Takeaway: The expansion of competitive gaming at middle schools, high schools, and universities is building a strong foundation for a thriving esports ecosystem in the US. We believe integrating esports into especially the collegiate environment will help address cultural perceptions, streamline regulations, improve content quality, and develop more sustainable business models for competitive gaming (i.e. media rights). These university programs are not just enhancing the on-campus student experience but are also essential in driving the growth and legitimacy of professional esports, setting the stage for a vibrant and sustainable future for competitive gaming in the United States.