How online games have created a whole new industry

By William Davis

|

Feb 5, 2024

Reading time: 4 min

Over the past two decades, online gaming has exploded in popularity, largely driven by advancements in technology and internet connectivity. This growth has given rise to a new industry – competitive gaming, or “esports” – where players compete professionally against others for prize money and fame.

Early tournaments lay the groundwork

In the early 2000s, esports started gaining traction as tournaments began to emerge for popular strategy games like StarCraft and first-person shooters like Counter-Strike. The advent of live-streaming services such as Twitch allowed these competitions to be broadcast to wide audiences in real-time.

As viewership numbers skyrocketed into the millions, so did the value of sponsorships and advertisements. This enabled gaming tournaments to offer prize pools in excess of $1 million.

The top esports players globally

The world’s best players can easily earn millions, and esports are highly lucrative for those with talent. 

The top esports players in the world right now based on income are:

·   Johan Sundstein

·   Jesse Vainikka

·   Anathan Pham

·   Sébastien Debs

·   Topias Taavitsainen 

Massive growth in viewership and revenue

The most watched esports competition today is the League of Legends World Championship, where the best teams from around the globe face off in Riot Games’ multiplayer battle arena title. The 2019 Worlds finals between European side G2 Esports and Chinese team FunPlus Phoenix peaked at over 4 million concurrent viewers on Twitch and YouTube. This demonstrates how far competitive gaming has come; comparisons can be drawn to traditional sports events like the Super Bowl and UEFA Champions League soccer final in terms of viewership.

Besides viewership milestones, investments have also been pouring into the industry. According to a report by Deloitte, global esports revenue grew to just under $1 billion in 2019, over 25% growth from the previous year. Revenue streams include not just prize money and advertising but also game publisher investments, content licensing, merchandise sales, and ticket receipts from live events. As the fanbase continues to expand, these revenues are expected to reach nearly $2 billion by 2022. 

Infrastructure and talent development

This influx of money has fueled rapid infrastructure development and allowed esports to manifest into a formal industry over the years. Over 150 colleges in the U.S. now offer esports scholarships to recruit talented players. Most major gaming organizations have facilities where players live and train together full-time. League of Legends developer Riot Games has even implemented an “Academy” system to groom new talent. Such investments in talent and infrastructure resemble traditional sports.

Widening accessibility

Online gaming has also benefited from improved internet connectivity and faster game streaming. 5G networks reduce delays between inputs and monitor outputs to imperceptible levels, enabling professional-grade competitive play from home. Cloud gaming services like Google Stadia additionally let gamers play high-fidelity AAA games straight from the browser. These technical improvements make gaming more accessible and widen its consumer appeal.

Ongoing challenges and innovations

While human competition dates back millennia, the idea of playing video games as a career is still nascent. Early skepticism around the legitimacy of esports has faded over time with its continued audience growth. Games like Dota 2 and Call of Duty, which simulate elements of traditional sports, have additionally helped competitive gaming gain wider acceptance. Still, challenges remain in converting general gaming fans into esports enthusiasts.

Publisher-backed leagues remain the most watched esports events thus far. Riot’s League of Legends championship tops viewership charts because the game itself dwarfs the competition in terms of total players. Critical fans also see oversaturation as an issue; with many new leagues and tournaments popping up, not all can realistically thrive. Striking the right balance between satisfying viewer demands and generating returns is an ongoing struggle.

AR and VR

Looking ahead, emerging technologies like virtual reality (VR) and artificial intelligence (AI) present new opportunities for innovation within esports and gaming generally. VR can drive greater immersion for viewers, while machine learning algorithms may change how matches are commentated or visualized. Advancing such technologies to enhance audience engagement can drive additional growth for competitive gaming.

Esports and online casinos

In Canada, the Esports market is worth an estimated $138 million. This is relatively low compared to the Canadian online casino sector, which is expected to be worth in excess of $2.6 billion this year. As esports grows, iGaming sites in Canadian provinces see opportunities to engage this new demographic. For instance, online casinos in Alberta now offer esports betting alongside traditional options, and you can find the best of them here. They use data analytics to set competitive odds. Additionally, streaming partnerships are arising, promoting casinos to enthusiastic esports fans who are immersed in a digitally-native culture and comfortable with online gambling.

Ultimately, esports’ ascendance from dorm rooms to sold-out stadiums has been nothing short of remarkable. While still developing in many respects, competitive gaming continues to professionalize and command viewer numbers that rival traditional sports. Supported by a new generation of digital natives and enabled by advances in consumer technology, this sector shows no signs of fading. If its brief history thus far is any indicator, esports appears poised to grow even larger moving forward.

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