ESports As a New Opportunity For Long-term Investors
Think about esports like you would any other sport for the uninitiated. As a replacement for the more traditional sports such as chess or curling, it’s video games such as CSGO or League of Legends. There is nothing more to a sport than the set of regulations, the playing surface, and the competitive infrastructure that encompasses athletes, teams, leagues, and the media that covers the event.
Each esports game has its own unique set of rules. Make the switch from physical prowess to a sharp mind. Everything else (infrastructure) is the same when stadiums and ballparks are replaced with virtual arenas and game types. Everything, right down to the heart-pounding moments when the home team finally pulls off the impossible and wins the championship.
Why is esports garnering so much attention? Start with the fact that the Super Bowl was equaled in viewership by events like the World Championships of League of Legends, and young gamers aged 18 to 25 watch esports 34 percent more than conventional sports. A large part of this is because fans of esports are also digital natives. There are few millennials who watch television or listen to the radio, but esports is omnipresent. Twitch, Youtube, Discord, TikTok, Instagram, and Twitter all provide ways to watch and share the action.
According to Data Bridge Market Research, esports is worth $1 billion in 2019 and is expected to expand 400 percent in the following seven years to $4.28 billion in 2027. With the worldwide traditional sports industry estimated to be worth $388.3 billion in 2020 alone, some may argue that this is a modest estimate. We’re just touching the surface of esports’ potential with the world’s 2.7 billion players. The number of monthly esports watchers, as it’s shown here, is expected to reach 29.6 million in 2022, up 11.5 percent from last year, according to our calculations. The rise in esports investment and income has been fueled in part by the popularization of the business.
Considering the esports possibility in this manner – one that includes gaming, media, pop culture, and commerce – is critical because it sheds light on possibilities that extend beyond gaming events alone. It’s enough to challenge the business of online gambling even with popular sites like Habanero games.
Thus, venture capitalists and private equity groups have stepped up their investments in the business. There were 68 investments in esports in 2018 compared to 34 in 2017, according to Deloitte, an accounting firm.
According to Deloitte, investment in 2018 was $4.5 billion, up 837 percent over the previous year’s $490 million. The ecosystem as a whole, from esports organizations to tournament organizers to digital broadcasters, benefits from the distribution of these investments.
Esports teams have owners, franchises, sponsorship agreements, financial rewards from tournament victories, and more – all of which contribute to their yearly income and overall value like regular professional sports clubs. Leagues will likely restart their attempts to grow viewers when the virus fades by organizing live games with regional esports teams in the same manner that conventional sports leagues operate.
Newzoo expects the company’s sales to reach $1.8 billion by 2022. Media rights, live event ticket sales, item sales, and in-game purchases all provide money for esports, but sponsorships and advertising account for the vast majority (69 percent).
The Future Of Esports
There was a time when watching live athletic events on television was the only way to catch the world’s most important events, such as the Super Bowl or the Olympic Games. Change and innovation are, of course, unavoidable parts of any endeavor. In esports, the future of media consumption is clearly interconnected thanks to streaming, which puts interconnectivity at the top of the list.
A very short time ago, Twitch and other huge media platforms were seen as niche, but now esports are helping them rise to popularity. In light of the recent growth of esports, what influence will it have on the streaming TV industry going forward?
The rise of esports as a new and developing category in streaming TV is only expected to continue as the field continues to expand to new, heightened audience statistics. As a result of this demand, streaming TV has the ability to take esports into new territory by providing channels devoted to the games itself as well as esports commentary, as well as profiles of the most prominent players and their professional histories.
For as esports continues to grow in popularity, it will have its own stars, commentators, and marquee moments. Does the esports industry’s move into the streaming TV market has an additional benefit? Inspiring even more cross-platform interaction.
It’s also possible to raise income in this industry by monetizing viewers and advertisers via streaming TV services. Interconnectivity is at the heart of it all. Streaming TV, as we all know, is the wave of the future. As esports’ popularity continues to rise, the door is wide open to a wide range of possibilities.
Perhaps VR technology will enter the picture and not only bring an additional level of participation but also shake up everything as we know it. If there’s one thing we can be sure of, it’s that esports have a bright future ahead of them in the streaming TV age.