Esports, also called eSports, e-Sports, egames, or electronic sports, is the organised competitive world of video gaming. In this realm, teams compete against each other in tournaments with the goal of winning significant prize pools. It operates similarly to traditional sports, where elite athletes strive to secure top rankings in their chosen game or sport.
The eSports industry has experienced remarkable expansion in recent years, both in terms of viewership and revenue. The surge in viewership has been the primary driver behind the revenue growth. Brands have recognised the potential of reaching a large and engaged audience and have invested directly and indirectly in eSports marketing. As a result, the industry has witnessed rapid revenue growth. However, it was somewhat hampered by the impact of COVID, which led to a reduction in significant public eSports events during 2020 and 2021. Fortunately, there are signs of a return to normalcy in 2023 as the billion-dollar industry thrives.
History of eSports
Gaming transformed in the nineties, evolving from an entertainment-based pastime to a well-structured professional sport. Presently, competitive pro gaming is a rapidly growing industry poised to reach a value of $1 billion. Tens of millions of viewers tune in to watch championships live, and there is even the possibility of eSports making its debut in the Olympic Games.
The eSports industry is experiencing substantial growth year after year, making it akin to a modern-day gold rush. Esteemed media networks such as ESPN, broadcast eSports events. Major sports leagues have also joined in by launching tournaments and establishing leagues. Moreover, owners of NBA, NHL and NFL teams have invested in eSports teams.
In the United States, over 600 schools have introduced varsity eSports teams or scholarships for eSports. Notably, PlayVS, a prominent eSports platform, recently announced a partnership to bring eSports to 19,500 high schools. These numbers undeniably indicate that eSports is a permanent fixture in the world of competitive gaming.
The term “eSports” refers to competitive video gaming events at both regional and international levels involving both professional and amateur players. As of 2022, the global eSports market was valued at approximately $1.38 billion. The global market revenue for eSports is projected to grow to around $1.87 billion by 2025.
Asia and North America are the largest eSports markets in revenue, with China alone contributing nearly 20% of the market. Sponsorships and advertising accounted for the largest portion of eSports market revenue in 2021, totalling $641 million globally. The second-highest source of revenue was media rights, generating just over $192 million.
In 2022, the global eSports audience reached a staggering 532 million people. This number is anticipated to continue to grow, with over 640 million viewers worldwide expected by 2025. These viewers will tune in to watch their favourite games played by some of the world’s most skilled gamers.
eSports Industry Statistics (2022):
- Global eSports Market – 2022
- Global eSports Revenue – 1.42 million (USD)
- Compound Annual Growth Rate – 17.8% (2023-2030)
- Live Streaming Type Segment Share – 71.3%
- Platform Segment Share – 69.4%
- Smartphone Device Type Segment Share – 41.2%
- Sponsorship Revenue Stream Segment Share – 37.5%
- Asia Pacific eSports Market Share – 31.9%
Casinos Tapping Into the eSports Market
Casinos have ventured into the esports community by incorporating esports betting into their existing sports betting services. Prominent platforms, particularly in the UK online casino industry, now provide esports betting in addition to their wide range of casino offerings.
Moreover, several sports betting sites have expanded their services to include esports betting and even launched their casino gaming platforms. Notable examples include Betway; this platform has also made efforts to establish a presence in the esports industry by sponsoring teams and tournaments.
However, the approach to attract esports enthusiasts goes beyond offering betting odds and sponsoring events. Companies like Betway have taken a more sophisticated approach by creating unique casino games inspired by popular esports games or teams.
Cities vie for the opportunity to host esports competitions, just as they do for prestigious sporting events like the Super Bowl or the World Cup, due to the potential for job creation and economic growth.
Atlanta, USA, serves as a prime example of a city capitalising on the rapid expansion of esports. According to Forbes, Georgia Governor Brian P. Kemp referred to Atlanta as the “esports capital of the nation” during the opening of DreamHack 2019, an esports event that attracted 35,000 players and fans. Governor Kemp also highlighted that esports has provided employment for 12,000 individuals in Georgia and has had a significant economic impact of $500 million.
In addition to its economic influence, esports also play a role in shaping the technology industry. Numerous colleges and universities, including Ohio State University and the University of Missouri, offer esports scholarships to students who are willing to compete. These scholarships enable students to pursue their passion in the field of technology.
As the popularity of esports continues to soar, it has become an important source of revenue across various industries, attracting increasing numbers of individuals and organisations to participate in this thriving market.
eSports Versus Traditional Sports
KPMG’s Football Benchmark compares the earnings of football club FC Barcelona, which generated a staggering revenue of nearly $1 billion for the 2018/2019 season alone, along with €855 million in 2019/2020, to highlight the contrast with traditional sports.
Even if the esports industry were to reach a $5 billion valuation within the next five years, it would still only match the value of the top 15 teams in the English Premier League. However, achieving this feat is no easy task, particularly given the current trend of slower growth.
Furthermore, traditional sports face the additional challenge of losing viewers, especially among younger demographics, who are increasingly drawn to esports. A survey of young Americans revealed that 75% of individuals aged 21 to 35 stated that esports have diverted their attention from traditional sports.