Video gaming is no longer a casual pastime, it has become a global phenomenon. Competitive gaming is a full-on spectator sport. It creates many profit-generating revenue channels for event and tournament organisers, competitors, platforms, and sponsors. The global esports market is expected to grow to as much as US$1.87 billion by 2025.1 Ukie notes that the UK esports (competitive video gaming) scene is fast growing. And it has the potential to have a significant economic impact in the UK.2 We even have the British Esports Federation who represent our national interest on the global stage.
Growing industry brings significant risks
Esports is not officially recognised as a sport in the UK. But in 2023 the UK Government has given funding to the video game industry.3
This continued growth presents opportunities for businesses and players, but also introduces new risks. Esports professionals need a strong risk management approach. This includes a solid insurance program to protect venues from natural disasters, safeguard reputations, and address other evolving and emerging risks, including:
Cyberattacks
The esports and gaming industry is particularly vulnerable to cybercrime and online risks.4 Player data security is a significant concern, while a hacking incident could affect both the integrity of the games and the broadcast. Threats, including ransomware, phishing, malware, and others can all have devastating financial and reputational consequences. Organisers should review their cybersecurity controls and make improvements to their cybersecurity posture and resilience in order to mitigate these risks.
Event and property risks
Any sporting or entertainment event with a sizable audience is subject to various risks. These can include bodily injury to spectators, property damage, active assailants, and terrorism. It is critical for event organisers to undertake strategic risk assessments as an integral part of event planning. They'll also need to secure the necessary cyber insurance coverage.
Brand and reputation risks
Esports brands typically develop partnerships and sponsorships to increase brand value. But inappropriate behaviour by participating athletes or other stakeholders can have negative impacts. This is especially true when amplified through social media. But it could result in the loss of sponsors or of tournament licenses. And these things can negatively impact brand value. You should engage in an exercise to identify potential risks to your reputation and quantify their cost. Then, create improvement mechanisms and share guidelines with athletes and partners to reduce the risks.
Protecting esports talent: players’ health
Esports teams athletes may spend up to 16 hours a day practicing.5 And with professional esports players performing as many as 400 actions per minute, movements like mouse clicks and keystrokes place a physical load on their fingers, wrist, neck, back, and lower arms.6 Coupled with incorrect posture and an inactive lifestyle, this can lead to significant health challenges. There are also growing concerns about mental health. A study of university esports athletes found that certain stressors, including in-game pressure, can lead to significant mental health issues. Such as anxiety and depression.7 Among other efforts, consider personal accident and illness benefits, including mental health support, that are suitable for your people.
Protecting your esports investments with esports insurance
As the UK esports industry continues to grow in both size and popularity new risks will emerge. Esports organisations should take steps to understand their key risks and identify ways to protect against them. This includes:
- arranging health coverages for esports athletes;
- making sure appropriate event liability insurance is in place;
- protecting personal items and premises with property insurance;
- putting in place the appropriate cybersecurity controls and necessary cyber coverage;
- and securing technology errors and omissions insurance.
To learn more about how to improve your esport business resilience, visit our esports insurance page.
Sources
1. newzoo.com/the-esports-audience-will-pass-half-a-billion-in-2022-as-revenue-engagement-esport-industry-growth
2. ukie.org.uk/esports
3. esportsinsider.com/esports-around-the-world-united-kingdom
4. marsh.com/cyber-resilience-twelve-key-controls-to-strengthen-your-security
5. britishesports.org/how-often-should-you-practise-info-and-guidelines
6. washingtonpost.com/professional-esports-athlete-injuries
7. chi.ac.uk/first-study-to-explore-relationship-between-stress-and-mental-ill-health-in-esports-published