Host cities and esport events: Perceptions and ambitions2 BACKGROUND Esport – By the Numbers: The...

Host cities and esport events:

Perceptions and ambitions

SEPTEMBER 2017

1 CONTENT

Contents

Background ................................................................................................................................. 2

Methodology ............................................................................................................................... 3

Results I: The perceptions of cities towards esport events ............................................................. 4

Results II: The ambitions of cities in hosting esport events .......................................................... 12

Conclusions ............................................................................................................................... 19

2 BACKGROUND

Esport – By the Numbers:

The global esport revenue is estimated to reach $4.8 billion by 2020.

83.7% of esport fans are below thirty years old.

50 % of esport fans are high income earners.

76% of esport enthusiasts say their viewing time of esport has taken away from traditional sports.

Background While some are still trying to decide whether esport should be spelt with a capital E or S (it is lowercase for the purposes of this report), or whether it should be defined as a sport or not, there is no doubt that esport is one of the fastest growing sports platforms in terms of audience numbers, active participants and investments made. The word ‘esport’, however, is still relatively new for many of the more traditional sport stakeholders, including host cities. For this reason, many are yet to fully investigate the potential of hosting esport events. Earlier this year, TSE Consulting decided to conduct an online survey among its 500+ database of sports cities to better understand their perceptions and ambitions towards hosting esport events. More precisely, the survey was based around two overarching questions:

1. How are perceived esport events by host cities? 2. Do host cities have the ambition to host esport events in the future?

The results of this survey are compiled into this short report. It first provides a brief overview of the methodology that was used to conduct this study. Results of the survey are then presented according to the two questions mentioned above. Finally, the report provides a conclusion on the main findings. Enjoy the reading!

What is esport?

Esport is the professional side of electronic sports, with athletes,

large prize pools, and filled arenas. Gaming, on the other

hand, is the mass-participation version of the electronic sports

phenomenon. Gaming takes place in a domestic setting every day on

both consoles and PCs.

3 METHODOLOGY

Methodology The word ‘esport’ is still relatively new for a lot of the traditional sport stakeholders, including host cities. The aim of this study is therefore to provide insight into the potential of hosting esport events for cities. The intention was not to conduct an exhaustive study but rather look at general trends to identify potential opportunities for host cities. In order to achieve the above, the study took the following four-step approach:

The first step of the study consisted of desk research on the esport industry, with the aim of gathering as much information as possible.

Secondly, a survey was developed by a TSE Consulting working group composed of: • Ronnie Hansen, Senior Consultant and Partner, who holds an extensive experience in the

esport world and leads TSE Consulting’s esport practice area. • Dale Neuburger, Director and Partner, who has great experience in working with host cities. • Heloise Signe, Consultant, who leads the quantitative analysis projects at TSE Consulting.

A total of 15 questions were developed. The survey was sent out to TSE Consulting’s city database that includes 500+ cities from around the world involved in the sport. The survey was open for two weeks in May 2017. The third step of the study was the analysis of the quantitative data. The raw data from the survey was analysed using the software programme developed by QuestionPro, which was also used for the creation of the online survey and allows for analysis of raw data. The survey results showed that the vast majority of respondents who completed the survey were from Europe (52%), North America (38%) and Asia (7%). Therefore any geographical comparisons are limited to these three regions, though interesting differences and trends could be found. The final step of the study involved analysing the research information from the previous phases of the study to extract the main findings of interest for host cities.

04 THE PERCEPTIONS OF CITIES TOWARDS ESPORT EVENTS

Results I: The perceptions of cities towards esport events This section provides an overview of the online survey results focused on the perceptions of cities towards esport events. Six major findings can be taken away from the survey results. These are described below: 1. Cities will continue to get involved in esport, despite debates regarding its definition as a

‘sport’ or its potential to harm participation in traditional sports There is some debate as to whether esport are a ‘sport’ and whether promoting its practice could harm the participation in traditional sport. However, for 51% of the surveyed cities, this debate does not influence their decision to get involved in esport. Nonetheless, it does matter for 25% of the cities. An equal portion of cities are uncertain about their opinion. It is interesting to see that opinions diverge according to the regions where the cities are based. While, 70% of North American cities say that the debate around esport does not affect their decision to host an event, this figure is significantly lower in Europe where only 41% of cities say that this view has no impact on their decision to host an esport event. As for the opinions of Asian cities, 50% of them openly say that the debate as to whether esport are a ‘sport’ negatively affects their decision to get involved in the industry.

Will the debate about esport stop cities from getting involved in esport events?

25%

4%

38%

0%

50%50%

70%

41%

50%

25%25% 26%22%

50%

25%

Overall North America Europe Africa Asia

Yes No Don't know


Results also show that, of the cities for whom the debate regarding esport’s definition is a concern, only 14% have actively connected with the industry. On the other hand, of those cities that have confessed having no concerns with such a debate, 59% have already connected with the esport industry. The debate around esport and its status as a sport can therefore be a serious blocker to greater city participation in the industry.

Finally, among the cities who said they will never host an esport event, 100% of them take the debate as to whether to esport are a ‘sport’ to heart. It can also be noted that cities most ready to host an esport event have no concerns about this point of view. Indeed, of the cities that said they would be ready to host an event in one year, 64% did not feel concerned by the debate, compared to 25% who were affected by the debate and 11% who were uncertain about their opinion. These results suggest that there is a clear and direct correlation between a city’s willingness to be involved in esport and its (debated) definition as a ‘sport’.

“It has just been decided to integrate esport in the city Sports and Leisure policies for 2017-2020.”

City from Denmark

“It’s a competition and therefore falls under sports”

City from United States

“Does chess harm participation (in traditional sports)?”

City from Denmark

“It is an ongoing debate at the moment”

City from Finland

“Children-marketing is a big issue here. Healthy kids is a political focus point”

City from the Netherlands


2. Cities want to host esport events in order to connect with youth.

One of the main argument in favour of hosting esport events is that they can be used as a driver to reach out to new and young audiences. 84% of cities agreed with this point of view, with only 5% of cities disagreeing that hosting esport events can help them connect with the youth.

Do cities think that hosting esport events can help their city connect with youth?

It is important to note, however, that many cities alluded to how the youth was not their only target audience. They were also very much interested in ‘young’ adults aged between 30-45 years old. Looking at the results per region, 100% of the cities from Asia and Africa and 87% of the North American cities think that hosting esport events can help their city connect with youth. European cities are collectively the least optimistic, with only 78% thinking that esport is a successful driver to reaching out to youth.

84%

5%

11%

Yes No Don't know

“But not exclusively, we believe that young adults

(ages 30-45) can also be highly interested.”

City from Mexico

“Especially in a transparent process with a clear idea to the youth without severe encumbrances on concepts

of traditional values.”

City from Nigeria

“Not only youth but also people 20 to 30 with money and talent.”

City from Denmark


3. The brand attributes associated with esport events such as youth, innovation or technology are aligned with the hosting objectives of cities.

Just like when hosting traditional sports events, cities are interested in using esport events as a platform to brand their city. Cities believe that hosting esport events can help to align themselves with attractive brand attributes such as youth, innovation or technology.

Results show that 79% of cities think that such brand attributes are aligned with their city’s objectives when hosting events, with only 8% think they are not. Comments revealed that, while youth is important to cities, it is not only a brand attribute of esport events but also of traditional sports events. This can be true for some traditional sports events such as the Youth Olympic Games, although the statistics show that 84% of esport fans are below thirty years old is something which only a few events can be expected to match.

79%

8%

13%

Yes No Don't know

“Yes, given that the traditional event we aspire to

host is youth inclined.”

City from Nigeria

“Youth is also an attribute of the traditional sports.”

City from Spain

“Less technology but yes to youth and in smaller degree

innovation.”

City from Austria

“These are positive brand attributes, but they are not

main criteria for us.”


Are brand attribute associated with esport events aligned with current cities’ objectives when hosting sport events?


4. Esport events are not seen as a competitor to traditional sports events by a large majority of cities.

It could be argued that hosting esport events could create a shift in cities’ budget, as cities spend less on hosting traditional sports events, with a greater focus on hosting esport events. In short, this would mean esport events become a competitor to traditional sport events. However, results show that 61% of cities felt that esport events were not a competitor to traditional sports events, while 28% of cities think it could become a competitor and 11% are uncertain about their opinion. It is interesting to see that opinions on the matter differ from one region to the others. While 100% of African cities and 70% of North American cities think esport events are not a competitor to traditional sports events, only 53% of European cities and 50% of Asian cities think the same. This could be explained by the fact that most events organised in Europe are supported by public funds and the resource envelope is therefore the same no matter the type of events.

Do cities see esport events as a competitor to traditional sport events?

28% 26%34%

0% 0%

61%70%

53%

100%

50%

11%4%

13%0%

50%


Yes No Don't know

“It might do. We have the same amount of money for all kinds of events.”

City from Sweden

“We do not use any public money for any sporting events, all of them must be privately financed.”


“At the beginning yes. But we must analyse the business model.”

City from Spain


In line with this, the comments received reflected an opinion that esport events might be considered as a competitor to traditional sports events at first, but that further analysis of the business is required in order to define what the longer term repercussions could be. Interestingly, it was also mentioned that it cannot be a competitor because, compared to traditional sports events, it has outlets for marketing and sponsorships.

5. Most cities think that hosting esport, compared to traditional sports events, could provide

less well known cities with a shortcut to increase the awareness of their city in the sports event market.

It has been discussed that hosting esport events, compared to traditional sports events, could provide less well known cities (small or medium sized cities) with something of a shortcut to increase the awareness of their city in the sports event market. The majority of cities (56%) surveyed expressed their belief that hosting esport events could represent this shortcut, compared to only 20% who did not. The example of Katowice, Poland – a city that no one had ever heard about before it hosted major esport events – was regularly cited. Katowice is an old industrial city that was built around the coal mines in the region, but today it is building an image as a place that is open to modern technology and youth culture and, in just two years, has become the epicentre of esport.

Results also show that small/medium sized cities (with a population of 100’000 to 500’000 inhabitants) are particularly convinced about the promotional opportunities that hosting esport events can provide.

“Not very likely. If it has outlets for marketing and

sponsorships.”

City from Nigeria

“I do not believe one could replace the other in

any way.”

City from Switzerland

“We believe in promoting sports through different outlets, one does not substitute the other.”

City from Mexico

“Look at Katowice, Poland”

City from Denmark


Do cities agree that hosting esport events, compared to traditional sport events, could provide less well known cities with a shortcut to increase the awareness of their city in the sports event

market?

6. In cities’ opinion, making esport an official medal sport at traditional sports events may

not be the best way forward. Cities were also asked their opinion about the fact that esport will be an official medal sport at the 2022 Asian Games in China. While 43% of them felt it is a good initiative, 26% of them think it is not a good initiative and 31% don’t know.

56%20%

24%

Yes No Don't know

“There are no shortcuts to increase awareness of a city in the sports event market. It is a matter of access and

experience. A small rural town in the middle of nowhere will not increase awareness by hosting an esport event if there are no activities whereby people would want to engage in addition to the esport event.”

City from UAE

“In some cases, traditional sports have a tendency to sign multiple years contracts with some specific cities. It means, that

new cities need emerging sports to increase awareness of their city, because no deals are on the table yet because they are new

to the market.”

City from Canada

“I am not sure how well "traditional" and "non-traditional" sporting events mix. It will be interesting to see how complementary they are”



Do cities think that esport being an official medal sport at the 2022 Asian Games in China is a good initiative?

Among the many comments received on this issue, it was generally felt that esport and traditional sports should not be mixed. However, many cities acknowledge that it will be interesting to see how complementary they can become as time develops, with some reflecting on the potential of esport to soon become an Olympic discipline. The further developments of the industry will be interesting to watch!

“We do believe this is inclusive, however, it shouldn’t be mixed with physical sport. They could promote each other but they aren't the

same.”

City from Mexico

“Don't see it as a "real sport" even there's a lot of money, publicity, city branding etc.

potential in it.”

City from Denmark

43%

26%

31%

Yes No Don't know

“It is a good idea because it would propagate its popularity and legitimacy.”

City from Nigeria

“I believe that esport will be Olympic discipline in 2020's.”

City from Finland

12 THE AMBITIONS OF CITIES IN HOSTING ESPORT EVENTS

Results II: The ambitions of cities in hosting esport events This section gives an overview of the current relationship between cities and the esport industry, looking at the ambitions of cities toward the hosting of esport events. Six main findings can be drawn from the online survey results. These are described below.

1. The majority of cities from North America and Europe have already been in contact with

the esport industry, but cities from Asia are the most keen to host esport events.

Independent of whether a city was in favour of hosting esport events or sponsoring an esport team, results show that 56% of surveyed cities had already been in contact with the esport industry. When analysing per region, results show that 61% of the surveyed North American cities and 59% of the surveyed European cities have already connected with the esport industry.

Have cities already been in contact with the esport industry?

When asked how long it will be before their city hosts an esport event, 74% of surveyed cities said that it will be only three years before they host an esport events. When analysing per region, 48% of North American cities and 44% of European cities said it will be only one year. Surprisingly, while only 25% of the surveyed Asian cities have already been in contact with the esport industry, 75% of them believe that it will be only one year before they host an esport event, suggesting strong potential for growth.

56% 61% 59%

0%

25%

44% 39% 41%

100%

75%


Yes No

“We have not yet approached the subject. This is the first step we are taking towards the idea.”


“It is already here!”

City from Sweden


Some comments revealed that cities were already organising esport events on a local, national and international level. Some were already the hometown of famous esport players and teams, while a few cities said that they have been approached by esport teams in order to discuss the opportunity of gaining support/sponsorship from their professional teams.

How long will it be before cities host an esport event?

46% 48% 44%

0%

75%

28%

35%

25%

50%

0%

21%17%

22%

50%

25%

5%0%

9%

0% 0%


One year Three years Five years Never

“We have the world’s best player reside in our city.”

City from Canada

“There have been esport "teams" who have contacted us about gaining support/sponsorship from our professional teams”


“Not really but still investigating on their behalf. I have been trying to include my city's development through sports empowerment but the efforts have been muted.”

City from Nigeria


2. Medium to large sized cities are the most eager to host esport events.

As already noted before, a majority of cities (56%) have already been in contact with the esport industry. Interestingly, large cities with a population of more than 3 million inhabitants have been less in contact with the esport industry (only 43%). There are many potential reasons why, including the possibility that that sports events departments were not involved in such discussions, but rather tourism, exhibitions or economic departments.

Have cities already been in touch with the esport industry?

However, it is important to note that, when asked how long it will be before their city hosts an esport event, cities with a population of 500’000 - 1 million inhabitants (65%), estimated it would take a year before they host an esport event.

How long will it be before cities host an esport event?

56%

0%

73%

33%

73% 75%

43%44%

100%

27%

67%

27% 25%

57%

Overall Less than100.000

inhabitants

100.000 –250.000

inhabitants

250.000 –500.000

inhabitants

500.000 – 1 million

inhabitants

1 million to 3million

inhabitants

More than 3million

inhabitants

Yes No

46%

0%

55%

33%

67%

50%

36%

28%25%

18%

44%

20%25%

36%

21%

50%

27%22%

7%

25%21%

5%

25%

0% 0%

7%

0%

7%

Overall Less than100.000

inhabitants

100.000 –250.000

inhabitants

250.000 –500.000

inhabitants

500.000 – 1 million

inhabitants

1 million to 3million

inhabitants

More than 3million

inhabitants

One year Three years Five years Never


3. Cities need more information about the benefits of esport for their city before deciding to host esport events.

When asked what their city would need before deciding to host esport events, results show that 38% of cities said they would like to have more information about the benefits of hosting esport. Furthermore, cities also showed a strong interest (21%) in networking opportunities to meet with the key esport industry players and in getting case studies on how other host cities got involved in esport.

What would cities need before deciding to host esport events?

Some cities specifically mentioned that they would need more understanding on how to promote esport on a larger scale, not only with fans, but to their populations as a whole about the benefits of hosting an esport event. Some comments also revealed that cities would like to know more about the costs of hosting esport events as well as information on the bid process.

Finally, a city mentioned that they already decided that we would like to host esport events but that they are still looking for an event right holder to partner with.

38%

21% 21% 21%

Information about thebenefits of esports for

your city

Networkingopportunities to meetwith the key esports

industry players

Case studies on howother host cities gotinvolved in eSports

Other

“A little bit more understanding on how to promote esport in a larger scale, not only with fans, a

larger benefit for our citizens.”

City from Mexico

“A discussion in the city council (and with the citizens) about priorities regarding sport, youth, culture, events...and a

change in the municipalities Event Strategy.”

City from Denmark

“Benefit on health, proof that e-sport encourage

movements.”


“We've already decided we'd love to host esport but need the right promoter.”



4. There are many factors that could prevent cities from hosting esport events.

Some comments revealed that cities may face challenges in convincing the local authorities to support the hosting of esport events as they do not justify the investment from the limited public resources. It was also mentioned that esport events were not in line with the promotion of physical activity and therefore not a priority. The solution, it was suggested, is to find alternative sources of revenues such as sponsors or any other commercial entities.

“City will not be the organizer of the event. The

resources to host the esport event would have to come from other party who

would also be the organizer of the event.”

City from Finland

“Nothing would prevent us from hosting esport.”


The lack of understanding of the esport industry (35%) is the main factor that could prevent cities from hosting esport events. The second most important factor is the lack of the support from the city authorities or the lack of infrastructure to host esport events (20%). The third factor is the lack of fit with their city’s sports events strategy (19%). Finally, cities do not seem to be worried about a potential lack of interest from their city’s population as only 15% of them felt it could prevent them from hosting esport events.

“Lack of sufficient meaningful benefit to justify investment from the limited public resources

there are.”

City from United Kingdom

“The position of the city is that e-sport is not in line with the promotion of the movement,

and then not a priority.”


19.15%

35.11%

20.21%

14.89%10.64%

Lack of fit with your city’s sports event

strategy

Lack of understandingof the esports industry

Lack of support fromthe city authorities;

Lack of infrastructureto host esports events

Lack of interest from your city’s population

Other

What would prevent cities from hosting esport events?


5. In most cases, esport events will be managed by the same team who oversees the hosting of traditional sports events.

Results show that, in most cases, the same team that oversees the hosting of traditional sports events will also oversee the hosting of esport events; European cities (50%), African cities (50%) and North American cities (48%). Asian cities are still uncertain about who will be in charge of overseeing the hosting of esport events.

Comments revealed that the hosting of esport events would involve, more than normal, other departments such as culture, exhibition or tourism. In addition, it was mentioned that profit-driven organisations such as venue managers or even technology companies would be involved in the hosting of esport events.

“The organisers will be different because the business model is different; the role of the industry, private sector, sponsors and television will also be different.”

City from Spain

“Yes, if handled by the same group; would create confidence, acceptance and

comfort.”

City from Nigeria

“Possibly a collaboration with university groups.”


“The venue would lead with our support.”

City from Canada

“In partnership with venue owner/operators.”

City from Canada

48%

18%

34%

Yes No Don't know

Will esport events be managed by the same team who oversees the hosting of traditional sports events?


15%

57%

28%

Sponsoring an esports team

Using esports to activate your population

Other

6. Cities and esport – not just hosting!

In addition to hosting esport events, there are many other ways in which cities can play a role in the esport world. In the future, 57% of cities could imagine themselves using esport to activate their population and 15% of them could think of sponsoring an esport team.

It was also mentioned that by a city that they could be involved in one way or the other in connecting to and inspire business development within the technology and gaming industry. Furthermore, a city also revealed that it could offer the opportunity to esport teams to facilitate esport camps and build a new esport team.

“It's clear that esport are an additional thing but there is no need to mix it with traditional

sports.”

City from Sweden

“I see more of a chance that one of our venues would host esport

competitions than any other way of being involved.”


“Connecting to and inspire business development within the technology and

gaming industry.”

City from Sweden

“Esport camps and the start-up of a new esport league.”

City from Spain

Which activities could you imagine your city being involved with in the future?

19 CONCLUSIONS

Conclusions As stated from the outset, the study aimed at answering two main questions:

1. How are perceived esport events by host cities? 2. Do host cities have the ambition to host esport events in the future?

The answers provided in the survey strongly suggests that sport cities are ready to host esport events. Not only do they generally have a good opinion on esport but they are also highly interested in getting involved in the business, whether it is to host an event, using esport to activate their population or sponsoring an esport team. Based on the survey findings that were highlighted in the previous phases of the study (Results I & II), TSE Consulting have compiled the following five conclusions for readers to take away from the study:

1. Esport events are not perceived as a competitor to traditional sports events. While it could be argued that hosting esport events could create a shift in cities’ budget as they would spend less on hosting traditional sports events, it is important to highlight that, for a majority of cities (61%) esport events are not perceived as a competitor to traditional sports events. In the same vein, the debate around whether esport is a sport in the traditional sense will not stop the majority of cities from being involved in esport.

2. Cities see esport events as the opportunity to connect with a young audience. The vast majority of cities surveyed (84%) said that hosting esport events can be used as a driver to reach out to new and young audiences.

It is, however, important to note that many comments from cities notably pointed out that youth was not only their target audience. They were also very much interested in ‘young’ adults aged between 30-45 years old who are relatively secure financially and thus able to spend money while attending the event.

3. Cities see the potential of using the hosting of esport events to develop their city brand.

The majority of cities (56%) think that hosting esport, compared to traditional sport events, could provide less well known cities with a shortcut to increase the awareness of their city in the sports event market.

20 CONCLUSIONS

In addition, the brand attributes associated with esport events such as youth, innovation or technology are aligned with cities’ objectives when hosting esport events.

4. In three years from now, most cities will have hosted an esport event.

At least this is what the results show. Indeed, the majority of cities surveyed have already been in contact with the esport industry and more than two thirds of them mentioned their intention to host an esport event within the next three years. Some cities also mentioned that they were already involved in the esport industry whether because they were host of an esport tournament or home to esport teams.

5. To move forward cities need more information on the benefits of hosting esport events.

When asked what their city would need before deciding to host esport events, results show that 38% of cities said they would like to have more information about the benefits of hosting esport. Furthermore, cities expressed a clear interest (21%) in networking opportunities to meet with the key esport industry player and in getting case studies on how other host cities got involved in esport. Moving forward, the role of the esport industry in providing cities with information about the benefits of hosting esport events is crucial, as the lack of understanding of the esport industry is the main factor that could prevent cities (35%) from hosting esport events.

Should you have any questions or be interested in knowing more about opportunities in the esport market, please contact Heloise Signe, Consultant at TSE Consulting: [email protected] or visit TSE Consulting’s website: www.tseconsulting.com

mailto:[email protected]://www.tseconsulting.com/

Cover page_test 2Host cities and esport events_TSE Report_September 2017_without cover page_v3BackgroundMethodologyThe first step of the study consisted of desk research on the esport industry, with the aim of gathering as much information as possible.Results I: The perceptions of cities towards esport eventsResults II: The ambitions of cities in hosting esport eventsConclusions

Host cities and esport events: Perceptions and ambitions2 BACKGROUND Esport – By the Numbers: The...

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