Advertisement
Table of Contents
Esports, once considered a niche form of entertainment, has now blossomed into a multi-billion-dollar industry with a global audience. However, this rapid expansion has highlighted the necessity of proper governance and regulations to maintain the integrity and longevity of esports. The European Union (EU) and individual European countries have taken steps to address this need.
Esport is what the Interactive Software Federation of Europe (IFSE), an organisation for the video game industry in Europe, defines as “leagues, competitive circuits, tournaments, or similar events where individuals or teams play video games, typically in front of viewers, either in-person or online, for entertainment, prizes, or money.”
Advertisement
Esports are extremely diverse. Esports can be associated with a “true” sport, much like NBA2K or FIFA with basketball or football. Esports, though, are numerous. The most popular esports genres are:
- Battle Royale (Fortnite, PUBG)
- Tactical first-person shooter (Counter-Strike)
- Multiplayer Online Battle Arena (League of Legends, Dota, Arena of Valor…)
There are some games in each of these genres that have extensive fan communities and tournaments in various areas of the world, despite the fact that few gaming franchises or games have international tournament circuits and audiences.
EU-wide Esports Initiatives
The European esports landscape benefits from some overarching initiatives aimed at promoting responsible growth and player protection. Notably, the EU has recognized the need for consistent standards in areas such as player contracts, health and safety, and age restrictions. The EU’s involvement stems from concerns about player exploitation, doping, and the creation of a fair competitive environment.
- Player Rights and Contracts: The EU has encouraged the development of standardised player contracts that outline fair terms for compensation, transfer agreements, and dispute resolution.
- Player Welfare and Health: To address concerns about player burnout and health issues, the EU has supported research into best practices for training, rest, and mental health support.
- Age Restrictions and Child Protection: The EU has advocated for age restrictions to prevent underage players from participating in excessive hours of practice and competition, aligning with broader child protection regulations.
National Approaches to Esports Regulations
While the EU provides guidelines, each European country has its own regulatory framework for esports. These regulations can vary significantly based on cultural norms, existing sports regulations, and local gaming cultures.
- Germany: Recognizing esports players as athletes, Germany provides a special visa category for esports athletes, allowing non-European players to compete professionally within the country.
- France: France has integrated esports into its sports federation system, enabling esports athletes to access training facilities and benefit from the same support structures as traditional athletes.
- Sweden: Known for its strong gaming culture, Sweden has taken a hands-off approach to regulations, allowing the esports industry to self-regulate while maintaining awareness of potential issues.
Advertisement
Challenges and Future Directions
Despite the progress made, challenges persist in creating a unified regulatory environment for esports in Europe.
- Age Verification and Protection: Verifying the age of players in an online environment remains a challenge, raising concerns about minors’ access to potentially harmful content.
- Match-fixing and Betting: Preventing match-fixing and unauthorised betting is an ongoing concern, as esports competitions gain popularity in the betting industry.
- Intellectual Property Rights: Issues related to the ownership of player likenesses, in-game content, and broadcasting rights require attention to avoid disputes.
Expected developments
A growing market
By 2024, esports revenues are expected to reach $1.7 billion, according to a 2022 analysis by the gaming and esports analytics company Newzoo. This sum includes sponsorship income, media rights income, ticket and merchandising sales for clubs and leagues, broadcasting fees, digital and streaming revenue, and sponsorship income. The company notes that the overall number of esports fans globally in 2021 was 240 million, and that figure is projected to increase over the following two years to 292 million by 2024. The total audience is currently 474 million, and that number is projected to increase to 577 million in 2024.
There are a number of important aspects that determine how appealing investment in esports is. The key target audiences for esports are Gen Z and Millennials, who are difficult to approach despite being a desired demographic. Revenues and viewers are anticipated to expand dramatically. Nearly 60% of revenue in the esports sector is derived from sponsorship, which is largely reliant on it. Due to the high cyclicality and dependence on a small clientele, this might be challenging during economic downturns. The sector is still developing, though, and is experimenting with different revenue streams and business models.
The future of the sector
The hardware and electronics sector, which produces and markets specialised gaming equipment including PCs and monitors as well as peripherals for competitive games, has benefited from the growing popularity of esports. Mobile phones may shape the future of the global esports sector by lowering entrance barriers and enabling more players and spectators to participate. Over 40% of the worldwide esports market in 2021 was accounted for by mobile gaming. This popularity is already gaining ground in some very competitive areas, like China, where the market for mobile sports is exploding.
Additionally, several esports-related individuals are leading the way in the development of the metaverse. While it’s still unknown exactly how the metaverse will look, some players, like Epic Games, are positioning themselves as key players in the metaverse of the future. The popularity of games like Roblox and Minecraft is one of the main reasons why the technology community is so interested in building a metaverse. With the simultaneous participation of many players, a shared environment where users own durable items, and in-game economies that frequently have real-world worth, these games contain many of the essential components of the metaverse. An esports legislation may go hand in hand with future regulatory developments pertaining to the metaverse, as stated in the European Parliament’s study.
Ursula von der Leyen, President of the European Commission, presented her Letter of Intent on September 14, 2022, just before giving her State of the Union address. It outlines the legislative and other steps the Commission intends to pursue in the upcoming year. The letter refers to an impending legislative proposal on virtual worlds, such as the metaverse, in the section A Europe suited for the digital era. This effort, which is anticipated to be unveiled in 2023, may present a good chance to harmonise the rules and enable the EU’s esports industry to expand.
Advertisement
