Let the Games Begin

Esports in the Olympics

Last week, on July 23, the International Olympic Committee (IOC) announced the creation of the Olympic Esports Games (OEG), an international competition aspiring to be the ultimate achievement within the esports world. The establishment of the Olympic Esports Games is a result of the IOC’s desire to continually modernize competitive sports to more accurately reflect the world that young people live in today and is a culmination of years of effort to bring gaming onto an international, mainstream stage.

The IOC has already announced they will be working with the National Olympic Committee (NOC) of Saudi Arabia for the next 12 years to organize the Olympic Esports Games. The inaugural tournament will be held in 2025 in the Kingdom of Saudi Arabia. The location (city and venue), timing, events to be included, and the qualification process for players have not yet been determined.

However, the Olympic Esports Games will not be organizationally or financially tied to Olympic Games. In fact, the IOC will be creating a new, dedicated structure within the organization and will be taking a “different approach with regard to the financing and organization of these Games” (IOC).

The Olympic Esports Games will be charting a new path for the IOC and the video game industry. It is important to understand the magnitude of this new partnership and how it will affect the future of our industry. This week, we will be:

1. Clarifying the relationship between the Olympic Esports Games and the Olympics
2. Reviewing precedence on new international competitive structures through the IOC
3. Evaluating the potential for esports to be included in the Olympics in the future

IOC x Gaming: a Brief History

Competitive gaming is as old as video games themselves (1950s). The first video game largely considered to have established the “birth of esports” was Tennis for Two, one of the first real multiplayer games. New technologies such as arcades, home consoles, affordable PCs, and network advancements accelerated competitive gaming to a global stage. Today, millions of people play against friends and strangers alike in games like Fortnite and League of Legends.

Esports Forum (2018): By 2018, the gaming industry had swelled to $138b with around 2.5 billion gamers worldwide. At this point, the IOC made its first significant move in gaming by organizing the Esports Forum followed by the establishment of the Esports Liaison Group. This helped create a platform for the IOC to connect to the right esports stakeholders.

Olympic Virtual Series (2021): No event was created until 2021, when the IOC launched the Olympic Virtual Series. The inaugural event took place in Singapore in June 2023. The virtual sports games included were Archery (Tic Tac Bow), Baseball (WBSC eBaseball: POWER PROS), Chess (Chess.com), Cycling (Zwift), Dance (Just Dance), Motor Sport (Gran Turismo), Sailing (Virtual Regatta), Shooting (modified Fortnite), Taekwondo, and Tennis (Tennis Clash). Qualification rounds took place starting in March, 2023. Both professional and amateur players from all over the world were invited to participate, depending on the event. The finals had over 130 players competing.

The games selected were the most aligned with Olympic Values and proposed by international sports governing bodies (Polygon). The heaviest critique of the Olympic Virtual Series primarily revolved around the game lineup, with well-known news outlets like Polygon, The Guardian, and Dexerto calling the selection “odd”, “disappoint[ing] and, honestly, a little embarrass[ing]”, and “out-of-touch”.

While almost all of the events in the Olympic Virtual Series were existing games, one was not: Virtual Taekwondo. We found this event to be the most interesting as it was developed solely for this series in partnership with World Taekwondo and Refract Technologies. It showcased how gaming can enhance and modernize a traditional sport in a format familiar to fans of the fighting genre. Qualification for the event was also unique - 16 of the best and upcoming taekwondo athletes were invited to compete at the finals in Singapore.

Olympic Esports Week (2023): It is unknown how many people watched the Olympic Virtual Series live or in-person, however, the event was successful enough to warrant the launch of Olympics Esports Week in 2023. The format was very similar with the same 10 mixed-gender events (Baseball, Sailing, Cycling, Motorsport, Chess, Tennis, Taekwondo, Archery, Shooting and Dance) and 130 players (IOC).

Including the qualifiers, the Series had >500,000 unique participants. The Series also had a measurable media presence - the Olympic Esports Series garnered >6 million live views, 75% of which were from people aged 13-34.

After the success of the Olympic Esports Series, the IOC announced their plans to create the Olympic Esports Games in October 2023.

Will Gaming ever be part of the Olympics?

The IOC is classified as an “international non-governmental organization” that is the ultimate authority in the Olympic Movement. The Executive Board oversees the organization's legislative functions and is responsible for enforcing all necessary regulations based on the Olympic Charter.

Each country that belongs to the International Olympic Committee has its own National Olympic Committee (NOC) which promotes the development of their respective national athletes and selects which ones will attend the Olympic Games. NOCs also nominate host cities for selection by the International Olympic Committee. If selected, the IOC entrusts the organization of the Olympic Games to the NOC of the host country.

Implication on Gaming: The IOC has emphasized that International Federations already engaged in an e-version of their sport that is considered for inclusion in the Olympic Esports Games will be the IOC’s first go-to partners. National Olympic Committees which already include esports will also be included for consideration.

Process to be in the Summer or Winter Olympics

Petitioning for a sport to be included in the Summer or Winter Olympics is a complex and lengthy process. This is further complicated by the fact that despite this process, multiple sports have pursued alternative routes in recent years.

The “Traditional Route”: International Federations

1) Recognition by the IOC and attaining “International Federation” status: To be recognized by the IOC, a sport must first be governed by an International Federation (IF), a non-governmental organization responsible for the administration of one or more sports at the international level (e.g., FIFA for Football / Soccer, WFDF for Ultimate Frisbee). The IFs have the responsibility and duty to manage and to monitor the day-to-day running of the world's various sports disciplines. IFs that are governing a sport not included in an upcoming Olympics are also grouped and represented as a whole by The Association of IOC Recognized International Sports Federations (ARISF), examples in this group include chess, bowling, cheer, floorball, and the card game of bridge.

2) Petition and approval by the IOC: The respective sport's International Federation must file a petition with the IOC for consideration to be an official Olympic sport in the Summer or Winter games. This petition is evaluated across multiple criteria, including those related to Olympic history and tradition, governance and institutional matters, value added to the Olympic movement, popularity and appeal, and business model and costs. The members of the IOC (111 today) then vote on which sports to include. It is a delicate balancing act to determine which events to add and remove to manage the size of the Olympics. This is evidenced by the addition and removal of baseball and softball (16-24 players) from the Olympics between 2012 and 2028.

The “Non-Traditional” Route

Outside of the ARSIF route, there is some flexibility in the process that considers the host city’s input. In 2014, the IOC approved Olympic Agenda 2020, a strategic roadmap for the future of the Olympics. In this agenda, a clause called “Recommendation 10” was introduced, which allowed host cities to propose additional events in sports for inclusion in their specific Olympic Games program. The goal of this was to make the Olympic program more flexible and better tailored to the local hosts competitive sports.

The first Olympic Games to benefit from this new flexibility was Tokyo 2020 (held in 2021), where the organizing committee was able to propose the inclusion of baseball/softball, karate, skateboarding, sport climbing, and surfing.

What is the Right Path for Gaming?

Both the organizers of the Olympic Virtual Series and Olympic Esports Week were not staged by international federations recognized by the IOC. The Olympic Esports Games is unique in that it will be held by an NOC (specifically, the NOC of Saudi Arabia). No other sports category has been solely hosted by an NOC in this way - NOCs historically host geographically relevant tournaments. In order to follow the “traditional” path, an IOC-recognized International Federation (IF) must be formed. While logistics such as governance are still opaque today, esports has a legitimate case forming in the other criteria: Olympic history and tradition, value added to the Olympic movement, popularity and appeal, business model and costs.

At the same time, gaming also has a viable path as a sport chosen by a host country (most likely in a Summer Olympics games). This is unlikely for the 2028 Summer Olympics in the United States (coming up too soon) and also unlikely for the 2032 Summer Olympics hosted in Australia given the proportionally smaller market size (~$3b) and the relatively poor performance by Australian esports teams. However, in 2036, there are two countries to keep an eye on that have expressed interest in hosting: Saudi Arabia and South Korea.

• Saudi Arabia: The NOC of Saudi Arabia has committed to hosting the Olympic Esports Games over the next 12 years. Through acquisitions, Savvy Games Group (owned by the Saudi Arabian Public Investment Fund, who has committed $38b to invest in gaming) now owns 40% of the total esports market share (NY Times). The PIF and its subsidiaries have spent ~$6b buying game companies and $14b on stock investments.
• South Korea: South Korea is known to be an elite esports powerhouse. Like Lebron James or Lionel Messi, South Korean player Faker, widely considered to be the #1 League of Legends player ever, has been the face of both esports and competitive League of Legends for many years. In addition to the strong performance of Korean esports teams globally, gaming is extremely popular within the country. South Korea is the 4th largest gaming market in the world and 74% of the population plays video games.

Headwinds to Esports being an Olympic Sports

While gaming as entertainment has continued to proliferate worldwide, competitive gaming (and in particular esports) has not grown nearly as large or as quickly. The reasons behind this pose similar barriers for any bid esports makes to the Summer Olympics.

1. Infrastructure: The expansion of competitive gaming at middle schools, high schools, and universities is building a strong foundation for a thriving esports ecosystem. There is proof of this in other sports such as soccer, football, and baseball - for which there is structure and pipelines for athletes wishing to compete at the highest level. While gaming in general is becoming more and more accessible (mobile, networking, cloud gaming), there is not the same support for those that want to pursue esports, especially outside of already well-performing countries (e.g., China, South Korea). Attaining this is made even more difficult if esports wants to be in the Olympics. The Olympic Charter states that the sport must be “widely practiced by men in at least 75 countries and on four continents” and by women in “no fewer than 40 countries and on three continents”. Even further, the IOC in recent years have made a commitment to gender equality, with Paris 2024 being the first Olympic games to have full gender parity, a far cry from 1900 when only 2% of all athletes were women (NPR). Today, <1% of professional esports players and only ~8% of collegiate esports players are women.

2. Format: The largest and most contentious gray area that the future esports international body will need to decide is what events will be included and if existing 3rd-party published games will be competed in as events. There is a tradeoff between commercial popularity and complications with game publishers. This tricky relationship with publishers is a similar problem that we see in the professional esports space today; publishers differ in the level of oversight that they hold over tournaments and teams, and take vastly different stances on how they intend for value to be accrued (Konvoy). Additionally, it is a delicate balance to determine which events to include to manage the overall size of the Olympics. Note, the IOC focuses on the total number of events (a “competition that leads to the award of medals”) versus a total number of sports. For example, the sport of aquatics has a total of 46 events - 32 in swimming, 8 in diving, and 2 each in artistic swimming, water polo, and open water swimming. According to the Olympic Charter (2023), Summer Olympics should be limited to ~310 events. Given the sheer volume of vastly popular games in the world and the precedence of variety set by the Olympic Virtual Series and Olympic Esports Week, we anticipate that the number of events that would be considered in order to include esports could be high (likely between 10-30), which could be a headwind to esports being included.

What does this mean for Gaming?

‍Takeaway: At this point, it is still too early to say how this announcement and the new path toward international recognition will affect the gaming and esports industry. There is intriguing initial interest as the last IOC-sponsored event, The Olympic Esports Series, hit >6 million live views (a similar number of concurrent views as the 2023 League of Legends World Championship).

‍
The financial backing by Saudi Arabia is also an unprecedented accelerant. Through both their NOC for esports and the backing of the PIF, they will invest heavily in the success of the inaugural Olympic Esports Games next year. However, based on the structure of the Summer Olympics it is likely that esports will not seriously be considered for inclusion until at least 2036 (in Saudi Arabia or South Korea), which is coincidentally one year before the end of the NOC of Saudi Arabia’s partnership with the IOC.

‍
Ultimately, we believe that this is a step in the right direction and that the pieces falling into place - international competition, sponsorship and support, and a path to IOC recognition - are putting gaming on the right track for competition at the highest level for athletes; the Olympics.