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esports: a warm welcome in cold Katowice

Thanks to the generosity of ESL, on the weekend of 3 & 4 March 2018 I was lucky enough to spend time at Intel Extreme Masters (IEM) in Katowice in Poland – the world’s largest esports event. For the uninitiated, esports is essentially competitive video gaming played out in front of often huge physical and online audiences. In the case of IEM Katowice, professional teams of players from around the world came together to compete in or watch a number of different esports event in the iconic Spodek arena. With over 100,000 people in attendance, it was immediately evident just how much esports has taken off: the industry as a whole is forecast to be worth around US$1.5 billion by 2020.

The main focus of the weekend was undoubtedly the $500,000 Counter-Strike: Global Offensive tournament, which eventually saw the London headquartered Fnatic team edge the US-based FaZe Clan in a thrilling 7-hour marathon of a final. However, there was much more to the weekend than just this particular tournament. The IEM Expo in the adjoining conference centre was an opportunity for the major tech brands, as well as other companies with an interest in this space, to showcase some of their most exciting product developments, such as new VR headsets and other innovative devices to improve the gaming experience.

There was also a huge VIP area where senior executives from the big corporate sponsors, such as Intel, Samsung and Lenovo, and other major corporates with an interest in promoting the industry, such as Activision Blizzard, Red Bull and Paysafe, were able to meet and discuss future plans/deals.

Despite the sub-zero temperatures (it got to below -15 degrees centigrade) and the cold-blooded nature of some of the video gaming action on display itself, there was an undeniable warmth and friendliness from all those connected with the event. People couldn’t do enough to make others feel welcome: fans in the arena openly applauded good performances from rival teams, conversations about potential partnership opportunities were open and transparent and rounds of drinks purchased for complete strangers in the hotel bar each night. As someone who is more familiar with traditional sports this was really gratifying to see.

Given the other major European tournaments coming up over the coming months, such as ESL One Birmingham, ECS Wembley and the new Ireland’s Estars, together with the viewing figures for esports increasing massively in recent months on Twitch, YouTube and Facebook, and the big name brands that are now fighting to get involved with prominent players and teams, it feels like there is no end in sight to the sector’s growth. Traditional sports are starting to take notice with football and other high-profile sports clubs setting up their own esports teams across a variety of different esports in order to stay relevant for younger fans.

Despite the positives however, many within the industry remain concerned about the lack of regulation and frequent flouting of informal agreements and third party intellectual property rights. In the US, perhaps the most high-profile legal dispute at the moment centres on James “Phantomlord” Varga’s decision to sue the video streaming site Twitch after Phantomlord was banned for allegedly flouting its strict gambling rules.

As the number of major events, viewers, professionalism and (arguably most importantly) revenue generated by the esports sector continues to grow, interested parties and investors will need to be mindful of how to protect their legal position in order to continue to benefit from the enormous potential that esports has to offer.

Simon Leaf is a Managing Associate in the IP team at Mishcon De Reya specialising in Technology and Sports contracts.

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