How Esports Growth Could Change the Future of Video Games

Multiplayer games such as Tencent's Fortnite and Activision Blizzard's (NASDAQ: ATVI) Overwatch give investors a clue as to where game makers will focus their development efforts going forward.

In this segment of Industry Focus: Consumer Goods, the cast discusses how a wider demographic of esports viewers and increased player engagement will be key to attracting more advertisers and partners to today's early esport efforts.

A full transcript follows the video.

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This video was recorded on May 22, 2018.

Vincent Shen: I'd like to spend a few more minutes talking about the outlook. John, when you and I were chatting before the show, you brought up some points I thought were really interesting about how esports are going to impact game development going forward, and also how they might change the content of games to be more appealing to wider audiences. Can you speak to that really quickly?

John Ballard: One thing benefiting the esports multiplayer growth right now is how games like Overwatch and Fortnite can bring in more female gamers into the shooter genre. I think this is a really important thing to understand about where esports has been and where it's going. It's historically been small and not very relevant to the industry, not to mention the wider world of entertainment. Part of that reason is that, typically, video games have been associated primarily with men. And you see this in esport tournaments, where finding a female gamer playing on a team is very rare, it's almost non-existent. And it's because shooters like Counter-Strike and Call of Duty, like we talked about earlier, they're realistic military shooters. That tends to limit their base and audience to primarily males.

Overwatch has this colorful, bright presentation with a balance of female and male in-game characters that you can play. I think that's really attracting more women to the shooter genre. It's also happening with Fortnite. I saw a study recently where twice as many female players play Overwatch than the average shooter. I think it's about 16% of the player base, and I can attest to this from my own experience playing the game and watching people play it on Twitch.

This is a really important thing for Overwatch League's ability to attract advertisers. Obviously, with more women in the game, there will clearly be more women viewers watching esports matches. I've seen this on Overwatch teams so far, there's at least one woman who's actually on an Overwatch League team. This kind of opens the door for women viewers and more women getting involved in esports.

Activision just came out with their press release for their new Call of Duty coming out this fall. It's mostly being aimed at the multiplayer segment of the gaming community. They're really playing down their single-player and playing up more the multiplayer. It's about positioning the game more for esports, especially with Call of Duty World League ramping up this year.

It just shows where the industry is. It's all about multiplayer games, it's about what's going to keep players spending the most time in games. And right now, that's games like Fortnite. NVIDIA, the graphics maker, they've been crediting these games for driving their demand in GPUs recently.

Shen: That's going to influence the way these games are developed, and color how the companies think about where they put their priorities, where they place their focus for the actual format for these games.

John Ballard owns shares of Activision Blizzard. Vincent Shen owns shares of Activision Blizzard and Tencent Holdings. The Motley Fool owns shares of and recommends Activision Blizzard and Tencent Holdings. The Motley Fool has a disclosure policy.