Esports: an overview of a new(ish) frontier in digital entertainment

• Author: Andrea Rizzi and Francesco de Rugeriis
• Position: Andrea Rizzi & Partners, Milan, Italy

Only a fraction of esports involves virtual simulators of traditional sports like soccer or basketball. League of Legends, the videogame developed by Riot Games, is one of the most popular “esports” worldwide but on the face of it has nothing to do with “sport.” (Photo: © Riot Games)

Only a small fraction of esports involves virtual simulators of traditional sports like soccer or basketball. League of Legends, the videogame developed by Riot Games, is one of the most popular “esports” worldwide and yet, on the face of it, it has nothing to do with a “sport;” it’s a battle-based videogame set in a fantasy world where teams of fanciful characters fight for victory and glory.

The significance of esports

The significance of esports should be appreciated both from an economic and a communications standpoint. In economic terms, in 2022, the esports industry is expected to generate USD 1.38 billion, up from USD 1.11 billion in 2021, with year-on-year growth of 16.4 percent, according to Newzoo’s 2022 Global Esport & Live Streaming market report.

From the communications perspective, esports can connect with both newer and older generations with a high spending capacity. As such, they are becoming an interesting target for big brands like Louis Vuitton and Mastercard, which until recently, were totally unrelated to the gaming world. Their ability to reach a broader and more varied audience is appealing. In 2019 the League of Legends World Championship Final had roughly 100 million viewers, while the NFL Superbowl had “only” 98 million spectators.

Unlike in traditional sports, where nobody ‘owns’ the game as such, in videogames a whole host of (physical or legal) persons may have proprietary rights to the game or its components.

Esports as IP protected videogames

For there to be an esport, there must be a videogame. This has meaningful implications from a legal standpoint. If we think of a videogame as being, in essence, a layer of software (or game engine) on top of which sit audiovisual components, such as animations, images, text, sound effects and music, which are IP-protectable subject matter, then the legal complexity surrounding esports becomes clearer. Copyright is arguably the category of IP rights that is most immediately relevant to videogames. However, virtually every category of IP rights is potentially pertinent.

From a European perspective, the Court of Justice of the European Union (CJEU), in its Decision No. C-355/12 (the Nintendo case), has clarified that “videogames […] constitute complex matter comprising not only a computer program but also graphic and sound elements, which […] are protected, together with the entire work, by copyright […].”

As IP rights are...