E-Sports Market: From Gaming Engagement to Billion Dollar Industry

E-Sports or electronic sports is a sport competition using video games. The Global E-Sports Market has gained a boom in its popularity in recent years. It shows a dramatic growth in terms of participation by millennials. The Global ESports Market is expected to grow from USD 694.2 million in the year 2017 to USD 2,174.8 million by 2023. The market is growing at a CAGR of 17.72% during the forecast period 2020-2023. According to a statement issued by Common Wealth Games Federation, they have agreed on participation with global e-sports federation that aims to develop a common wealth e-sports strategy. Hence, inclined focus of government organizations towards boosting the ESports platforms is further supporting the global market growth over the forecast period. The ESports Market is analyzed to be a fastest growing industry with China being the largest revenue contributor, followed by North America. As per the studies, it is estimated that total ESports audience can grow to ~495 million people by end of 2020. Most of these revenues (~75%) will come from sponsorships and media rights, with a 17.2% increase from last year. For instance, the Overwatch League was the most-watched league by live viewership hours on YouTube and Twitch with 104.1 million hours. Moreover, the League of Legends World Championship was 2019’s biggest tournament by live viewership hours on YouTube and Twitch with 105.5 million hours.

The ESports industry is constantly witnessing an exceptional growth with continuous advancements in the form of various video game genres that are associated with ESports, some of them are:

  • RTS Games: Real time strategy game such as StarCraft 2
  • Fighting Games: Games like street fighter and super smash bros
  • FPS Game: First person perspective such as call of duty and counter strike
  • Multiplayer Online Battle Arena: These are team-based battle such as Defense of the ancients and league of legends
  • Online Collectible Card Games: Strategy based card game such as hearthstone

The dynamics of the Global ESports Market include study of the various market determinants such as

increase in availability of online streaming media platform particularly via YouTube and twitch help in increasing the popularity of ESports, ESports are now converted in Carrier option rather than just a play to pass time, availability of high-speed internet connection boosted the revenue generation part of the industry. Whereas, anti-gambling laws prohibit paid professional gaming tournament. While, increasing number of events of e-sports with large prize tolls offers lucrative market opportunities for the market growth.

The ESports Market ecosystem includes game publishers, players, teams, league operators, distributors, and audiences. Some of the major players present in the global ESports marketplace are:

  • Alisports
  • Gungho Online Entertainment
  • Rovio Entertainment
  • Wargaming Public
  • Kabum
  • Hi Rez Studios
  • Gfinity
  • Faceit
  • Turner Broadcasting System
  • Nintendo
  • Electronic Arts
  • CJ Corporation
  • Valve Corporation
  • Activision Blizzard
  • Modern Times Group

Companies are largely relying on the ESports industry; and public market and private investment gave a great exposure to the ESports Market. Some publicly traded companies who has invested in e-sports are:

  • Tencent owns Riot Games, the creator of League of Legends acquired a majority equity voting stake in a consortium that itself holds a majority stake in Finnish mobile developer, Supercell.
  • Blizzard developed World of Hearthstone, Overwatch, and Warcraft.
  • YouTube invested in ESports by signing a deal for an exclusive multi-year broadcasting along with gaming platform Faceit to stream the Faceit’s ESports Championship Series (ECS) pro gaming league.
  • Vindex launched with initial funding of $60M to build a global ESports infrastructure platform.

Coronavirus and E-Sports Industry

Coronavirus has shown its impact on everything in this world. It has an impact on the ESports market as well. One of the greatest benefits of ESports is that it can be played without physical co-location of participants at home. Some professional teams and athletes turned into a simulation ESports to satisfy the demand for content. Several large-scale ESports events are also cancelled, postponed, or held without audiences. Hence, with the quarantine leading more people to spend time at home, they have more time to watch online content. The viewership on Twitch and YouTube Gaming is up by at least 10%.

ESports i.e. sport competition using video games is in trendy sector of the Gaming Industry. It has shown an increase in its revenue and audience with increasing awareness about ESports due to availability of high bandwidth internet and advertisement on television. Live streaming of ESports on online platforms holds large number of viewers. As per the market study, ESports holds lucrative digital marketing and entertainment investment opportunity for investors in the coming years.

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