August 11, 2020
With an increasing demand for video games and a growing awareness of the industry, eSports, also known as electronic sports, has become a popular form of entertainment for millions of people around the world. eSports refers to organized, competitive video gaming that involves teams of gamers competing against each other in tournaments for cash prizes. These competitions are watched in real-time by millions of gamers both online and at live events. According to Data Bridge Market Research, the global eSports market is expected to reach $3047.1 billion by 2025, as the number of investments by sponsors and sports betting sites continues to grow.
A Widening Audience
eSports draws a large viewership with an estimated 495 million streamers in 2020 with 223 million considering themselves frequent viewers/enthusiasts, according to a report by Statista. Unlike traditional sports, fan bases are not location-specific, attracting viewers from all over the world. The largest consumers of eSports come from China, South Korea, Denmark, Sweden, and the U.S according to Gaming 4 Cash. In terms of age, GlobalWebIndex reports that 62% of eSport viewers are under the age of 35, making this industry most popular amongst young millennials and generation z consumers.
The eSports industry has many streams of revenue, from sponsorships, media rights, advertising, game publisher fees, and merchandise. With all of these factors combined, eSports market revenue reached $957.5 million in 2019, as reported by Statista. With the growing popularity of eSports around the world, many brands have begun investing in electronic sports marketing. Through digital video advertising and influencer marketing, experts predict a 12% increase in US ad spending on eSports for 2020, reaching $191 million, according to eMarketer. In addition to increased ad spending, more brands are investing in esports through partnerships and sponsorships, making up 42% of eSports total revenue in 2019, according to Newzoo. With this, a growing number of platforms have started offering live eSport coverage. From Facebook Gaming, Twitch, and Caffeine, gamers have a myriad of options to watch their favorite team compete. eSports betting has also gained traction as viewership continues to grow. Eilers & Krejcik Gaming estimated that the eSports gambling market will reach $13 billion by this year, as countries such as China, Denmark, and the U.K. contribute to the majority of eSports betting revenue.
Hurdles to Overcome
As the eSports industry continues to grow, there are several challenges to overcome. For one, the industry lacks standardization, subjecting professional players to overwork, mismanaged contracts, and the inability to compete in unsanctioned tournaments. To prevent the exploitation of labor, many professional gamers wish to unionize, despite the risk of individuals losing years’ worth of wages and being forced into retirement. In addition to the mistreatment of professional players, there are no guidelines for integrity in eSports gambling, leading to underaged gamblers, unsafe offshore bookmarkers, and match-fixing. Despite these obstacles, the eSport industry shows no signs of slowing down as this billion-dollar industry continues to make its way into the mainstream.