Future of esport industry
Esports is a success story which is increasingly spreading across Europe. Revenues are growing on the basis of significant growth in audiences and increased participation from business partners. The market could potentially grow further towards acceptability by the mainstream, particularly in terms of increased media coverage.
Sporting competitions today quickly fill the stadiums when the prize is awarded
For certain traditional sports money will compete with or even surpass that offered. Esports has evolved far beyond being a niche product, as part of its growth. Last years’ tiny, local ‘LAN parties’ were replaced by globally linked events that are broadcast online and transmitted via linear TV. Today , the new advances, often by younger generations, are the focus of intense public debate.
Since 2016, the European sports industry has seen solid annual average growth of about 24%, with overall sales in 2018 amounting to EUR 240 million. The market has become increasingly more organized during this period: Alliances and league structures have been introduced, new business dynamics are changing and non-endemic players join sports, in particular as sponsors or trading partners.
Esport has developed rapidly from a niche commodity to a mainstream trend. The three fields: Asia, Europe and North America each account for about 30% of the global economy. The global market size of esports was estimated at USD 1.1 billion in 2019 and is projected to increase from 2020 to 2027 at a compound annual growth rate ( CAGR) of 24.4 per cent. The growing viewer reach and engagement activities, enormous investments, rising live streaming of games and growing league tournaments infrastructure are key drivers of market growth.
The video gaming industry is gradually evolving from being a casual activity into a career opportunity. Immense sports competitions involve millions of fans in obsession viewing, much like traditional sports. As a result, these competitions draw sponsors and investments of celebrities from foreign brands resulting in overcrowded stadiums and live streaming.
So where does the esport industry get its revenue?
- Media rights and streaming
- Ticketing and merchandise
- Game publisher fees
The two main trends in the nearest future are the most obvious ones. The first one is revenue from ads. Most definitely revenue is created from advertising targeted at sports fans, including ads seen on online platforms during live streams, on video-on – demand content in sports matches, or TV sports. Advertising is supposed to enhance more revenue during the forecast period with increasing audiences on online platforms such as Twitch and YouTube. Twitch and YouTube led the race in 2018, with 1.13 million active streamers and 432,000 active streamers per quarter, respectively, according to Streamlabs.
The second one is China taking over the market. Because of the popularity of sports among youth and government support for business growth, China is projected to hold a major market share in the eSports industry. Tencent Holdings Limited, a major player in the eSports industry, has its headquarters in China and played an influential role in increasing eSports in China through the development of games such as “Honor of Kings,” which in 2019 generated revenue of USD 1.4 billion in its own right.
Whichever way you look at it, the game changed forever in 2020. Many people have started serious gaming because they have many time to devote to it than ever before, and more people are watching sports as they are pursuing more areas of interest after watching all on Netflix and Zoom already chatting with each person they meet.