April 21, 2020

How is eSports doing?

Covid-19 has brought the world of traditional sport to a standstill. From cancellation of major leagues across the world to the postponement of the Tokyo 2020 Olympics, the virus has been relentless. Esports has not been immune to Covid-19’s reach. Cancellations of major tournament events have come thick and fast, as have closures of esports teams’ headquarters and community centres.

However, unlike traditional sports, the shutters remain up on much of the industry. In recent days online streaming platforms such as Twitch have reported massive increases in user streaming hours; online games platforms such as Steam have reported record numbers; and, importantly, much tournament and competitive play has gone online. Large players in traditional sporting industries are already turning to esports: see, for example, Formula One, which has recently launched the Virtual Grand Prix Series. Governments are also getting involved, with the Japanese Ministry of Economy, Trade and Industry proposing an initiative to lift the esports industry in Japan.

Much of this is supported by the crucial distinction between esports and its traditional counterparts. Whereas the latter requires numerous people to be present in the same place, usually in close proximity, esports is digital at its core.

It is clear that, for both traditional sports and esports, spectators cannot attend events in person. No reasonable excuse is available to a spectator for leaving their residence, and no exception is provided for the gathering of spectators to watch sport. Similarly, businesses that sell goods to spectators are required to close, albeit this does not mandate the closure of the entire operation if the remainder of the business is permitted to continue.

As esports are essentially digital in nature, and close proximity is not (usually) needed between players, there will rarely be a reason that makes it necessary for an eathlete to leave their home. While it is true that teams will often play and train together, this certainly can also be managed remotely except in the most extreme of cases. And, if such an extreme case arises, then it is likely the exceptions in the Regulations will apply in the same way as for traditional sports. Of course, this is all before recognising the fact that much of an eathlete’s revenue and work will arise in maintaining their own personal online community, rather than just playing and competing in professional play.

It is clear that esports must capitalise as much as possible on its digital nature. This is both as a matter of practicality (it is better that events go ahead than do not go ahead), but also of legal reality. Police in England have already begun using their enforcement powers under the Covid-19 related legislation, and people leaving their houses may face serious scrutiny of the reasons why they are travelling. As such, questions will be asked whether a person leaving their house to go to a central place to play video games, albeit professionally, constitutes a reasonable excuse, and whether the gathering is necessary. As the author has canvassed in other areas of law on LawInSport, the nature of esports as not yet mainstream may impact negatively upon how decision-makers enforcing the restrictions view such esports-related excuses.

It may be considerably more difficult for teams (as, often, teams are formed around an employment structure) to justify steps taken to dismiss or furlough eathletes or support staff. In circumstances when a sizeable amount of work can be done on-line and in a remote form, it will be hard to justify redundancy (or other forms of dismissal).

The law of frustration and force majeure is going to be very important in resolving the plethora of legal issues that Covid-19 will cause. To take three examples: players’ bonuses, sponsorship, and cancellation of competition will all raise serious points of friction which may ultimately be resolved in the courts. Of note here is that considerations concerning the movement and business restrictions in traditional sport will be subtly different to those in esports, because of the way in which they apply. It may be harder to argue that a contract has been frustrated, or that force majeure applies so as to discharge an obligor of their obligation to perform, in circumstances where a live event that could have been played behind closed doors is cancelled outright. As was noted above, it is considerably easier to see how traditional sports can be played behind closed doors, at least from the perspective of the legal restrictions. In contrast, the cancellation of live esports events may more easily fall under frustration or force majeure, as it is harder to explain why eathletes have a reasonable excuse to leave their home to work (and harder to explain why the gathering is necessary). While eventually something which will be fought in the courts, it is important for industry players to consider this issue now as the address the ways in which they will meet (or, as appropriate, disregard) their contractual obligations.

calvinayre.com