Anyone familiar vaguely with economics has probably heard the terms comparative and absolute advantage. And FYI – I’m not a economist…I only play one on TV. Still, I want to illustrate how these two terms apply to eSports outside the realm of econ; specifically to the differences between the traditional professional sports and eSports.

The conversation surrounding sports vs. eSports typically seems to minimize the inherent strengths of the latter. There’s a tendency to use traditional professional sports as the measuring stick for, what is actually, an entirely new and unique phenomenon. And while multiple parallels exist, only viewing eSports through a 21st century pro sports lens limits our concept of what is actually possible.

If we view the entirety of pro sports and eSports as separate actors/agents, it becomes clear that each has its own comparative and absolute advantages. Despite the fact that these two entities don’t “compete,” they do exist adjacent to each other. Comparative advantage is (courtesy of Investopedia):

“The ability of a firm or individual to produce goods and/or services at a lower opportunity cost than other firms or individuals.”

Basically, a comparative advantage is found in areas that cost less to excel in. Applied in less classical economic terms, a good or service can be construed as anything of value; as can their process of production. In other words, there’s no need to limit the discussion to widgets on an assembly line…a comparative advantage can be a larger vibrant community of content creators. As long as they contribute to some form of revenue generation (see: money). Applied to eSports, examples of comparative advantages might be:

• Location independence – teams, players, organizations are not tied to specific localities
• Integration with non-traditional media (streaming, social media, etc.) – major sports struggle to embrace mediums outside of print/radio/TV
• Highly engaged fan base – a lack of casual fan base equals an overwhelming majority of highly engaged eSports fans

The above are examples of advantages that are easier to realize in eSports. For example, all major sports boast a segment of super fans. So while eSports has mobilized a large chunk of highly engaged fans in a relatively short period of time; this doesn’t translate into an absolute advantage. Speaking of which, absolute advantage is defined by Investopedia as:

“The ability of a country, individual, company or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.”

Essentially, these are areas where nobody does it better. Examples of absolute advantages, applied to eSports, could be:

• Reach/Draw – eSports is buoyed by the tremendous reach and draw of 21st century gaming. Self-explanatory
• Scale – Very few competitive outlets, which have developed professional scenes, have grown at the rate of eSports
• Authentic culture – stemming from an overarching gaming culture, eSports represents a natural shift for millennials across the world.

Why does understanding the difference between absolute and comparative advantages matter? Well, strong focus on your strengths is better than improving your weaknesses. This applies double when you’re a smaller, less established newcomer. Hopefully as the eSports industry grows, we’ll see just that.

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Alex Fletcher is founder & president at eSports Group, where he helps customers meet their eSports advisory & consulting needs. When Alex isn’t glued to a screen, he spends time with his wife, their two dogs, and pretends to learn Polish. Feel free to stalk him on Twitter – @FletchUnleashed