Coronavirus Forces Esports Leagues to Cancel Matches
Competitive video gaming is the latest industry to be hurt by the coronavirus outbreak.
(Bloomberg) -- Competitive video gaming is the latest industry to be hurt by the coronavirus outbreak, with leagues canceling multiple matches in China this week.
Activision Blizzard Inc.’s Overwatch League said on Wednesday that it will scrub its February and March matches in China “in order to protect the health and safety of our players, fans and staff.” That comes on the heels of a Sunday announcement from Riot Games, owned by Tencent Holdings Ltd., which said its League of Legends Pro League will be postponing games.
That situation spotlights an irony for the video-game business. Outbreaks could actually benefit the industry because people are more likely to stay home and either play games or watch livestreams. But esports leagues, which pit top gamers against one another, often compete in fan-packed venues -- something that’s difficult to do during an epidemic.
The livestreaming infrastructure also may be at risk.
Shares of DouYu International Holdings Ltd., a Chinese games-streaming company headquartered in Wuhan, the epicenter of the coronavirus epidemic, have dropped this month on concerns about possible disruptions to its business.
“The initial market reaction has been negative thus far, especially for Chinese esports and game streaming companies,” said Will Hershey, who runs Roundhill Investments, an investment adviser whose esports-focused exchange-traded fund has a position in DouYu. “However, if the virus is to persist, it could be a net positive for gaming and game streaming companies. As people are relegated to the indoors, particularly in Asia, they are likely to turn to mobile games and livestreaming as a form of entertainment.”
The World Health Organization just declared the outbreak of coronavirus in China a global health emergency, citing the risk that the virus could jump to more countries. With the number of cases topping 8,000, China’s government is taking extreme measures to block the spread of the disease, including imposing travel restrictions.
The Centers for Disease Control and Prevention, meanwhile, reported the first case of human-to-human transmission in the U.S.
Burgeoning Field
Esports is a booming market, projected to rise nearly 18% to $1.8 billion between 2019 and 2022, according to research firm Newzoo. That’s much faster than the 8.4% average growth in game software, and companies such as Activision have been looking to capitalize by launching new esports leagues. As the top region for esports viewership, Asia is the biggest prize.
The question now is how the industry copes with outbreaks. Aside from the cancellation of some high-profile matches, the impact might be positive overall, said Yoshio Osaki, chief executive officer of esports and gaming research firm IDG Consulting.
Already, gaming is growing faster than other entertainment options, Osaki noted. If consumers are less likely to visit a movie theater or sports venue, they may just plunk themselves in front of a screen at home.
“Gaming and esports will benefit from heightened media consumption in-home,” Osaki said.
To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.net
To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, John J. Edwards III
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