Insurance for esports – The rise and risks of esports

Esports insurance is a specialist insurance product designed to protect the interests of individuals and organisations involved in all aspects of the esports industry. Esport teams and management have their own unique set of risks. Event organisers have venues and technology to consider. Platform providers have services to maintain. Sponsors have reputations to uphold.

The industry is experiencing massive growth and with that comes increased risk. We can help replace that risk with reassurance. Call us on 01189 165 480.

Esports, a new dawn

It all started back in 1980 when William Salvador Heineman beat 10,000 other competitors to win the very first esports tournament; the “Space Invaders Championships”.

Fast forward 10 years to 1990 and Nintendo is dominating the gaming sector with the likes of Mario and Tetris, both of which featured in their “Nintendo World Championships“. As the 90’s mature, the game consoles start to give way to networked PCs, opening up competitive gaming to a much wider audience, while at the same time allowing for smaller LAN parties, from where professional gaming clans were born. Built on fast paced, competitive games such as Quake and Doom, the first esports leagues were formed toward the ends of 90’s. The early 2000’s saw the first true global esports tournaments occur, with the first $1m prize being offered at the CPL World Tour in 2005.

Competitive gaming had become big business and was here to stay.

A Hugh Opportunity

Although organised competitions have long been a part of video game culture, the live streaming of events on platforms such as twitch.tv and online video content has helped bring competitive gaming to the masses. With it’s explosive growth into mainstream culture, multimillion dollar prize pools, events hosted in arena’s packed to capacity and unique online viewers to rival that of traditional sporting events such as the Super Bowl, esports has gained a reputation for huge opportunity in the sports and entertainment industries.

Where sponsorship was initially lead by computer hardware and gaming industry companies, exciting content, intense competition, charismatic pro gamers and an immense global audience have attracted big name brands like Coca-Cola sponsoring the NASCAR’s esports race, Red Bull sponsoring a variety of teams and events, BMW creating a brand alliance with 5 global esports teams and Nike investing heavily in the sector. Big brands such as these have seized the opportunity of sponsorship deals and placed their brands at the centre of some of the biggest esports championship tournaments, leagues, teams and athletes in the world.

Opportunity for Everyone

When teenagers such as Jadan Ashman can win nearly £1m for coming second in a competition that attracted 40 million competitors and a total prize pot of $30m it won’t just be the sponsors who are cashing in. Esports offers ample opportunity for players and influencers, game developers and publishers, tournament and league organisers, platform providers and broadcasters. The video game industry is currently worth around $152 billion and has been considerably bigger than the movie and music industry combined for some time now, and the rise of the esports sector will only serve to make the gap bigger. Gaming is no longer a casual past time. It is a full on spectator sport generating a multitude of profit-generating revenue channels for it’s organisers, competitors, platforms and sponsors.

BBC Three is to release a documentary series called Fight for First in 2021 focusing on the multimillion pound esports organisation Excel Esports. It should serve as a fascinating insight in to the world’s fastest growing spectator sport!

Increased Opportunity – Increased Risk

However, with the dawn of a new digitally competitive age, comes a multitude of risks and exposures to consider:

    • Breaches of contract
    • Intellectual property rights infringement issues
    • Data collection, privacy and security
    • Resiliency and risk of transmission failure
    • Responsibility for user generated content

 

We work closely with a handful of insurance underwriters that are well placed to deliver innovative insurance solutions to this relatively new sector. As experts in specialist insurance risks, we recognise the distinct requirements of the esports industry. From event cancellation and non-appearance insurance through to media liability and technological failure insurance, esports insurance will make sure that your event, and everyone involved, is covered.

As an independent insurance broker with whole of market access and an extensive background in insuring technology and media risks, just like a true pro-gamer, we use careful planning, precise timing, and skilful execution to provide you with the best solution to address your needs.

For more information about esports insurance, contact the Macbeth team on 01189 165 480 or use the contact form at the top of the page.

Author: James Bishop | December 7, 2020

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