Esports is the fastest-growing sport in the world. Half a decade ago, no one would have imagined that the League of Legends World Championship finals would draw in more viewers than the Super Bowl, garnering over 100 million viewers compared to the Super Bowl’s 100.7 million viewers in 2019.
According to Tyler Gallagher, founder of professional esports group Team 33, we’re living in the golden age of esports. But it is still uncertain where this esports renaissance will lead, with many investors still hesitant to invest in the burgeoning sector.
In 2021, the Global Esports Market Report by Newzoo, a trusted industry source for market forecast and analysis, found that the global esports intake hit $950 million in 2019 alone. By 2020, revenues were predicted to hit $1.1 billion, the first time the nascent industry had crossed the ten-figure threshold.
Last year, it was estimated that 2022 would rake in close to $2 billion in revenue for the Esports market, with the majority of the revenue generated by sponsorships, media deals and broadcasting rights. Of course, several unexpected deals were finalized in 2022 that accelerated the previous growth expectations. In August 2021, new sponsors now included Amazon, NASCAR, Doritos, Discord and Mastercard. These brands have garnered funding and a stark increase in interest for the industry and will likely continue to help catalyze growth, securing larger venues and distribution deals in the process. The latest projections for revenue from 2022 show
Mobile devices like smart tablets and smartphones have been vital to the growth and future of esports. Console gaming remains a niche market, but most consumers use mobile devices. To lower the barrier to entry in the market, the industry needs to become accessible to everyone, so the industry must focus on mobile gaming as a means for future growth.
Research shows mobile gaming is more popular than console or PC gaming combined, representing 57% of the $173 billion global gaming market. This data also highlights how mobile-focused esports companies and developers will have longer growth runways than those who are only appealing to hardcore gamers. Another key takeaway is that the esports industry currently represents about less than 1 percent of the entire gaming market. Thus, esports has a lot of potential market share to gain in the coming years.
Live Esports Betting
Live betting is controversial, but it is a recent potential revenue stream. Since there is, on average, a young demographic base in esports, there is also an understandable resistance to the idea of embracing institutionalized betting within the ecosystem.
Despite the feeling, betting and gambling exist in esports and traditional sports (which young people are already exposed to) at institutional levels and on the grey market, respectively. Partnerships between esports companies and betting firms could help the industry control and regulate esports betting responsibly in the future while bringing in significant new revenues for the market.
European Market Growth
Within the esports industry, the Asia-Pacific (APAC) market is the largest, comprising 57 percent of global esports viewership in 2019 and is home to a whopping 1.5 billion gamers. Comparatively, the European market is less saturated and is home to many gamers who have yet to tap into the esports sector. Overall, Europe represents about $138 million of global esports income.
Some projections believe that companies targeting the European esports market (along with Latin America) could find sustainable long-term growth, especially as there’s a high state of development in the esports sector within these regions.
The New Growth Industry
New industries are quickly rising to international dominance in today’s disruptive world. Esports is one of those sectors that is set to see great growth. While in 2022, the worldwide eSports market was valued at just over 1.38 billion U.S. dollars, the eSports sector’s global market revenue is forecast to grow to 1.87 billion U.S. dollars by 2025.
As a growing multi-billion dollar market, more investors should start to take esports seriously and consider being part of an industry still in its early stages of growth.