The esports industry is set to easily exceed $1 billion by 2020 according to Newzoo – the self-proclaimed leader in esports, games and mobile intelligence.
Esports which is essentially competitive gaming, has become a global phenomenon with hundreds of millions of fans from all around the world tuning into esports events via their mobile phones, tablets and computers.
The industry is expected to smash through the $1 billion mark by 2020 as global brands look to take advantage of the popularity of esports via esports betting markets, advertising and sponsorship.
The Esports Market
The primary esports viewing platform – Twitch – has become one of the most regularly watched streaming platforms in the world. The Amazon owned gaming platform and social network is accessed by tens of million pf people per day, and this number is only increasing.
Incidentally, more people watch gaming streams every month than watch news channels. The current esports audience total’s at over 200 million whilst by 2020, the number is expected to exceed 300 million.
Esports are now one of the most popular pastimes on the planet, male millennials especially populate around 80% of esports audiences. This has opened up a huge market for brands looking to advertise directly to millennials.
For the most part, the majority of brands on Twitch that are looking to advertise to the huge Twitch audience are primarily gaming brands – which makes sense given that Twitch is a gaming platform, afterall.
However, it is thought that non-gaming brands are missing out by not advertising via Twitch. At the start of this year, nearly one million people were watching a Twitch live stream at any given point. Millennials are notoriously difficult to market to though, they are very tech savvy and tend to know whether they are being sold something or not, so advertisers need to ensure that they come up with a clever advertising campaign in order to successfully market their product.
Esports revenue is made up of several different streams, the largest being sponsorship and the second largest being advertising. Indeed, over 70% of the esports economy is generated via sponsorships and advertising.
As the esports audience grows larger, the more money advertisers will throw around in order to market to the growing audience. Sponsorship money into esports players, teams and events also continues to increase year upon year – this is the biggest filling in the esports pie.
Big businesses from all around the globe are investing into esports. The esports market in China is set to be dominated by Tencent – the multinational investment holding conglomerate. Tencent has become one of the most aggressive promoters of esports and professional gaming.
It cannot be overestimated just how popular esports are in China. Over 10,000 esports teams exist in the country whilst matchups in the countries famous King Pro League tournament garner as many as 240 million daily views.
However, Tencent is not the only company in the world which has coined on to the investment opportunities that esports offers. Walt Disney Co, Amazon and Alphabet are three others that have seen the growth in the industry and jumped upon the bandwagon. One of the biggest esports franchises in the world – Virtus Pro – has grown so large partly due to the investment it received early on.
In 2015, Russian billionaire Alisher Usmanov invested $100 million into the team and that investment has certainly paid off. Beloved in Russia, Virtus Pro have won a variety of different titles across a number of different games and have become one of the most well-known esports teams in the world.
This sponsorship into an esports team also opened the eyes of many people, as well as potential investors. Since that initial investment in 2015, the money being pumped into esports has increased tenfold.
One of the biggest events in the esports calendar is Dota 2s ‘The International’. It is easy to track the growth in popularity of esports just by following the prize pool of Dota Two’s standout event. Every year the event is crowdfunded by fans and each year the prize pool increases in size. The international 2017 prize pool eclipsed $24 million which left a whopping $10,862,683 to the winning team. The upcoming ‘International’ is expected to be even higher.
Currently, there is no ceiling for esports. Esports is one of the only fan based industries in which fans have a major say in what happens. If esports fans are not happy with something, they will let the powers that be know it in their droves.
You only have to look at the backlash surrounding the FIFA games series and its developers EA Sports to realise that esports fans have a lot of power in shaping the industry itself – in a world where monopolies dominate, often at the expense of the consumers, this is a rare thing.
Currently though, the major esports organisers – Valve, ESL and Dreamhack – are doing an extremely good job of organizing events and ensuring that the fans, players and team alike are all treated to fantastic esports events. The organisers are taking the best things about regular sports and implementing them into esports.
For example, fans are able to use their esports knowledge and place bets on their esports matches via esports betting sites. Esports franchise games such as Dota 2 require a large amount of skill to master but if you put in enough time and effort garnering the knowledge in order to really knowing the ins and outs of the game, you can pick up on small edges when watching Dota 2 streams, making gambling on Dota 2 arguably much more profitable than gambling on a regular sport such as football, for example.
Young people are growing up in an internet age of live streams and it is looking increasingly likely that esports are becoming the sports of the future.
The most popular and well-known esports ‘athletes’ have huge social media followings and are idles for millions of young people worldwide. Esports betting has also made audiences feel even closer to their favourite teams and athletes as they join in with both the heartache and happiness of their idles.
Already mainstream sports teams including European football teams and basketball teams in the USA are creating their own esports teams so they can market their clubs to the new generation of sports fans.
Some sports athletes are even creating their own Twitch channels in order to stream their favourite games to fans. At the same time, the average attendance in classic American sports such as baseball continues to decrease as Major League Baseball searches for ways to attract millennials – something that is proving difficult in what has become a digital world.
The world is constantly evolving and sport is evolving alongside it. Esports have forced their way into the hearts of primarily young people who have grown up during the digital age. As technology evolves, competitive video gaming will evolve with it and it is hard to imagine esports not getting bigger and bigger in the upcoming years.