The potential of esports has been a much-discussed topic in recent times as the growth of the industry has been amplified to entirely new levels.
Newzoo, a Games & Esports Analytics and Market Research company, has predicted that esports viewership is growing by around 14.4% a year and this is set to continue into 2021 – this will mean a total audience of more than 550 million people. The growth of esports has come about due to the high demand of people wanting to compete in and watch such events. As a result, esports is now much more accessible than previously, with platforms such as Twitch & YouTube, who have around 1.13 million active streamers. Newzoo predicted at the start of last year that global esports revenues were set to top $1 bn for the first time in 2019, which would make it the world’s next billion-dollar industry. Key revenue streams for esports include merchandising, sponsorship, game publisher fees, media rights and advertising, with all bringing in millions of dollars to the industry. Compared to traditional sport these revenue streams are however a little underdeveloped, and as this is improved revenue will continue to soar. Esports also provides additional opportunities for revenue generation that we expect to see being explored in the next few years.
It is such potential which has seen a variety of different people attracted to the industry, such as entrepreneur and philanthropist Tej Kohli. Kohli, who made his fortune in the technology industry, has launched a €50 million investment fund in order to support the sector. The fund is linked to a number of other projects Kohli invests in through venture studio Rewired, which are in the AI and robotics fields. Tej Kohli invests in these industries as he believes they have great potential and are the future, saying, ”Esports has huge potential and could rival traditional sports like football, tennis and basketball in terms of cultural impact and viewing figures.” With a total audience of half a billion people, it’s hard to argue against that.
It is not just investors that the esports industry has attracted. Multiple esports teams now have multi-million dollar sponsorship deals due to the exposure provided by the esports platform, an example being German car manufacturer BMW entering a partnership with one of esports biggest organisations, Cloud 9, in early 2019. Around the same time as they put their backing behind Cloud 9, the automotive giant pulled out of the World Endurance Championship, citing their future direction and strategy as the reason for the change. Instead, BMW upped their involvement in esports, choosing to set up an esports programme which will help develop junior drivers through simulated racing. This interesting move demonstrates that huge companies are now placing higher value in the esports industry, signifying the shifting momentum from investing in traditional sports to esports. To read more about BMW’s plans for the future, click here: https://bit.ly/30VvX1C
No one knows what the next few years has in store for esports, but with the current rate of progression in the industry, the future looks bright. In 2015, Newzoo’s data suggested that just over 800,000 people were aware of the industry, whereas now that number stands at over a billion. After such a rapid rate of progression over the last 5 years and with further progress expected, it looks with increasing likelihood that esports will become the next billion-dollar industry.