Bayes Esports held a roundtable at the IEM Cologne in August. Those speaking at the roundtable were Ulrich Schulze, SVP Gaming Ecosystem at ESL FACEIT Group, Alban Dechelotte, CEO at G2 Esports, Jens Hilgers, Founding General Partner at BITKRAFT, Christoph Thann, EMEA Director Esports at Ubisoft and Martin Dachselt, CEO of Bayes Esports.
What sort of topics were covered at IEM Cologne?
The roundtable was mainly going through the past, the present and the future of esports. We had some questions about the present of esports, what current issues are, what possible areas for development are; and then the future. What potential is there? What markets the panellists would want to explore etc. The first question we had was directed at Hilgers and what led him to found the ESL in the late ‘90s and early 2000s; what made him get involved in esports. What was interesting was that in the late ‘90s, there was a shift in gaming, where before that, if you wanted to play with other people, you had to do it locally and you had to be at an arcade or in front of the TV; and you had to splitscreen essentially to play multiplayer games.
And in the late ‘90s, that changed because games started to move online, which meant that from then, at that point forward, you could play online competitively against other people at any time and that changed the way he looked at gaming in general and he felt a real passion for watching, playing and training together with other people in these virtual worlds. So he decided that he was going to try to essentially create the ‘NFL of esports,’ as he called it, and create a league or a stage where people can play competitively; and can spend time with each other in these virtual worlds on the biggest stages so everybody can enjoy it worldwide.
He also said that, since then, not a whole lot has changed. Back then, for him, it was the likes of Quake and those kinds of games where you spend a lot of time playing and, in today’s world, it’s the same with Fortnite. The youth are playing games like Fortnite, not just to compete against each other, but to also spend time with each other in those virtual worlds. So that’s why there has been this linear growth, and that’s something that he came back to later, where in esports it just keeps on growing with each generation that joins esports; that knows gaming; that grows up with esports and gaming; because the basic idea of it and the basic premise is that passion of wanting to be competitive, and playing games with the other, is basically the same from 1997 all the all the way up to today.
Esports itself has been growing, but what about the betting market? Esports has a large under-18 audience, so obviously, that will form a large portion of the market?
I think the issue with esports betting in that kind of sense is that, as you said, there is this need to do it right, because the more it’s allowed to just run freely, the more there is the risk of esports betting becoming a trap for younger audiences, for match-fixing and for integrity issues. That’s something that was also discussed during the panel where there were questions of, “What do you do in terms of integrity? How can we ensure these games are not susceptible to match-fixing and the like?” To which Dachselt said that the entire field of integrity and doing esports betting right is very wide. There are a lot of fields that need to be worked on, to which there is not a singular solution because there’s match-fixing, there is insider trading, there is data scraping and that kind of stuff.
The way they want to move forward, they saw progress by getting official data and having partnerships with tournament organisers to gain access to their official data sources; and then working closely together with them to monitor player behaviour, to monitor the data that we get from them, to see abnormal behaviour of players. But also then having official data partnerships with betting partners to then run through the market and see ‘okay, where’s abnormal betting behaviour? Or, where’s abnormal market behaviour?’ Beyond that, esports betting is obviously still growing and there’s a lot to do. But as you mentioned, there is this caution of doing it right and seeing how we can bring esports betting into its audience, without it taking advantage of its younger audience.
There is this need to do it right, because the more it’s allowed to just run freely, the more there is the risk of esports betting becoming a trap for younger audiences, for match-fixing and for integrity issues
What do people bet on most in esports and what are the common factors involved? Have the biggest esports markets changed?
There are three big titles in esports. There’s Counter Strike Global Offensive (CS:GO), soon to be Counter Strike Two – once that’s released – and there’s Dota 2 and League of Legends. There are also a multitude of other games like FIFA and Rocket League, that don’t have a similar level of audience. The majority of esports betting is on these three titles and the biggest one out of those three in terms of esports betting is CS:GO. That has a couple of reasons why; the first one is that it’s the most mature game; whereas League of Legends and Dota 2 are more catered towards a younger audience and teens. CS:GO is supposed to be for adults and it has a more mature audience; that then also attracts more betting.
The second one is that the gameplay itself lends itself to betting. The benefit for esports betting is that if given the right tools, esports betting companies can offer markets for individual round winners, such as who’s winning the next round? And that way you can encourage bettors to bet over and over again during the match. In other games, for example, if you’re also looking towards football, as another market in sports betting, you might have a market for who’s winning the overall match but that takes 90 minutes and then you have side markets that are a lot less interesting, like who’s winning the next corner? Who scores the next goal? But even then, there is not a guarantee that these markets actually happen. It could just be that no team scores another goal, which for a bettor is not attractive.
By comparison, esports betting in CS:GO, there’s always going to be a next round winner and it happens so frequently. The benefit of CS:GO is that essentially every month there can be a big tournament in which the big teams will play and in which they will compete on the highest level; so it keeps people coming back to it because there are higher-stakes games as well.
How has the popularity of certain games changed over the last 10 years, considering you mentioned the top three at the moment?
Strangely enough, over the last 10 years, they haven’t. Which is also something that Hilgers discussed during the roundtable. That is incredibly strange for esports. Usually, if we’re looking at the history of esports, there have been new titles coming up and conquering the scene on a more frequent basis. Before the 2010s, it was the likes of Starcraft, Starcraft Two, there was Quake, there were previous editions of those games; but also games that since then have fallen out of favour, like Warcraft 3 or StarCraft, World of Warcraft even had a thriving esport scene.
In the 2010s, when streaming services started to emerge, it became easier for game developers and tournament organisers to stream their tournaments to a broader audience. That’s when we saw the emergence of CS:GO, we also saw Dota 2 and we also saw League of Legends, all in the span of two to three years from 2011 to 2013. If I remember my timeline correctly, they all emerged at basically the same time and have been at the top now for over 10 years.
Why do you think that is?
I think a part of it is, because of the developments that happened in gaming and streaming, these games managed to stay relevant through live action services. They are constantly updated and there’s always new content. They stay relevant over longer periods of time. Before, you bought the disc, you played the games and then that’s what you got. Updates to games were a lot less frequent, as opposed to now. So these games managed to build an audience over 10, 11, 12 years and remained relevant during that time.
Therefore, they could stay at the top rather than eventually falling behind due to graphical deficits that you would expect after 10 years, but if you can update the game regularly, then these games will stay at the top over a longer period of time.
What do you think the future of esports will be like?
Something that Alban Dechelotte from G2E mentioned during the roundtable was that he’s interested in the possibilities of VR and creating a virtual world for the fans of G2E, so that they can log on into this virtual world and basically have their own home field where they are; where it’s just them enjoying the games together in this kind of virtual arena.
Because otherwise you don’t have this home stadium or a home field in esports, because the venues are always neutral. But through VR and those kinds of technologies, there is the possibility of creating this home-stadium feel. Maybe that’s also a way for teams to market their own games, their own tournament runs and for this kind of premium event experience to manifest itself in esports as well.
