Analysis: How F1 has spurned the eSports digital revolution

History was made last month when the American NBA basketball team Philadelphia 76ers acquired two leading eSports teams, with a view to merging them to become a leading force in what is rapidly becoming a leading sporting industry that currently remains ripe for commercial exploitation.

Rather than following its traditional route of signing exceptionally tall men who are good at throwing a ball in a hoop, instead it has invested in talented gamers whose idea of taking a shot has an altogether different meaning in many of the games they play.

That an established sporting franchise in the form of a professional basketball team has seen potential value in an arena dismissed by many – largely those over 30 who do not see electronic gaming as a sport – is the first step in professionalising an industry that has grown in popularity and revenues among those younger consumers who have grown up as digital natives in an era when traditional forms of media are on the decline.

Speaking to the BBC, Michael O’Dell – known in the industry as Odee, and the owner of one of the two teams acquired by the 76ers – spoke of the rapid growth of eSports from a bedroom-based hobby to an international profit-making enterprise.

“It's gone from playing in our bedrooms, earning twenty quid in a tournament – and we were happy – to now where we could be earning a million dollars in a tournament, and that's not just one a year, there are a lot of tournaments with a lot of prize money," Odee said.

In the two years since that interview, O’Dell’s Dignitas team has amassed a number of sponsorship and merchandising deals which have combined to drive the financial growth of the team.

Photo by: FIA Formula E

How computer gamers have turned pro

Historically, gaming has been dismissed by those born before the ’80s as a trivial pastime or diversion, and the suggestion that those perceived as keyboard or console warriors could be described as athletes would have been laughable.

But in 2013 the U.S. government awarded Canadian gamer Danny “Shiphtur” Le with a P1-A visa, a visa class designated for “Internationally Recognized Athletes”.

Earlier this year, the French government announced that it would incorporate eSports into its “projet de loi pour une République numérique”, a wide-ranging digital law (yet to be officially passed) that will see the regulation of eSports from a state perspective. This will allow ‘e-thletes’ an official ‘social status’ that provides access to state benefits including unemployment, access to national health insurance, and pension plans, while simplifying France’s notoriously complicated tax system for players.

Given that France has an estimated 850,000 amateur and professional eSports players, with a national audience approaching four million people, the government’s decision to embrace eSports has widely been viewed as an attempt at an early land grab in a rapidly-growing industry.

And France is far from alone. Thirty-six million people worldwide watched the League of Legends World Finals, while eSports events have already sold out both Madison Square Gardens and LA’s Staples Centre, two venues with a combined capacity of 36,400. That’s nearly 40,000 people willing to pay to watch people playing computer games.

Photo by: FIA Formula E

What does this mean for F1?

So far, so good. But what does the rise of eSports mean for Formula 1, especially in light of Liberty Media’s stated desire to increase F1’s digital footprint? Thus far, F1 has been somewhat hostile to eSports, with the commercial rights holder going so far as to begin legal action against gamers applying accurate skins to their race cars on digital platforms, citing copyright violation of liveries and sponsorship logos.

Looking ahead, that sort of proprietary attitude is going to have to change. Any theoretical losses in trademark income recouped by going after individual e-thletes and graphic designers sharing source code for new skins could be more than offset by immediate and substantial investment in creating and exploiting the Formula 1 eWorld Championship.

The main downside to an advance in eSports from a Formula 1 point of view? Formula E boss Alejandro Agag has already secured the monopoly when it comes to the concept of an ePrix…

Has F1 already missed the boat?

There is a risk that F1 may be too late to the party: eSports is already a burgeoning industry with interest from several established F1 players and sporting brands.

Global sports broadcaster ESPN’s U.S. website now contains an eSports subcategory, listed alongside the NFL, NBA, MLB, NCAAF, Soccer, and NHL subcategories, with its listing appearing ahead of that of NASCAR. Formula 1 doesn’t get a mention on said list.

Envelope-pushers Red Bull (the energy drinks company, not the race team) also have an interest eSports, and their eSports website contains a mix of features, news reports, and interactive content all focused on this latest digital revolution. As history has shown, where Red Bull leads in alternative concepts, others are sure to follow.

From an F1 perspective, the eSports target audience is exactly those individuals our sport has been failing to attract and retain in recent years. According to an interview the BBC conducted with Steve O’Neil, chief executive of the 76ers, the eSports fanbase is “75% male, 18 to 34, highly engaged but not [listening to or] watching traditional radio and TV”.

Photo by: FIA Formula E

Conclusion

F1 can either try and play these people at their own game [pardon the pun – Ed.], giving them the option to race alongside ‘our’ drivers live to secure their custom and interest, or continue to ignore this burgeoning market and risk losing an entire generation of potential fans to eSports, an arena that allows for continuous fan engagement and direct involvement.