Given the rapid growth in interest and income generated, it’s safe to say we truly are living in the golden age of esports. But what does the future hold for this relatively nascent industry?
Esports has experienced a massive surge in interest and revenue over the last couple of years, thanks to live broadcasting channels. The trend is likely to continue into 2022, with several popular brands partnering up with esports organizations and sponsoring online tournaments. In addition, this rise in popularity has opened up a couple of newer markets, such as mobile-friendly gaming and live esports betting.
A quick look at the past few years attests to the burgeoning popularity of the esports industry.
How big is the esports industry in 2022?
Newzoo, one of the most trusted market analysts, recently released a report suggesting that revenue for esports has been on an upward slope for the last couple of years.
In 2019, the figure hovered around $950 million, while in 2020, it breached the barriers of a billion to gross a total of $1.1 billion. 2022 promises to be yet another great financial year, with reported figures of $2 billion in total revenue. Based on the current revenue model, the number is sure to climb to $5.7 billion.
Increase in concurrent viewers
The story seems to be the same with respect to the number of concurrent viewers. The same Newzoo report suggested that the number of viewers was close to 380 million in 2018. In 2022, this figure is expected to rise to 557 million, out of which 250 million are considered to be esports enthusiasts.
Similarly, Verizon statistics reveal that daily video game traffic has more than doubled since the beginning of the year 2020, when most people were forced to stay in their homes. In addition to this, game traffic seems to be picking up with time, indicating a renewed interest in competitive gaming.
What explains these recent trends?
The esports industry’s growth in the past few years can be explained by the phenomenon of being equated to watching a live sporting event. This has primarily been possible thanks to the introduction of live game streaming and a variety of broadcasting tools that are readily available on the market. Esports makes for a compelling watch, with plenty of strategy and drama at play. Gameplay videos, thus being generated, are being widely shared and are becoming a talking point.
The increased consumer interest has translated to an increase in sponsorships and media deals. This accounts for a large percentage of esports revenues. Several big players are now starting to enter the market, hoping to reap the benefits of skyrocketing viewership of live tournaments. Notable ones include Amazon sponsoring the European Masters tournament, NASCAR joining hands with Allied esports, and Mastercard tieing up with the League of Legends European Championship. Another consequence of this interest is the spike in prize pools for online gaming events, with the total amount reaching 35 million in some Fortnite and DOTA tournaments.
Moreover, esports is being considered for future editions of the Olympic Games by the International Olympic Committee. In fact, It was first introduced as a trial event in the Asian Games held in Jakarta and is expected to be a part of the Pan American Games, which is to be held in Santiago, next year.
The Road Ahead
The Asia-Pacific market has grown tremendously to become the largest of its kind, accounting for more than half the global viewership count. Reports suggest that it is expanding at an unprecedented rate, with a compound added growth rate (CAGR) of 21.92% by 2030. Meanwhile, the European belt represents only about $173 million.
Market experts ascribe this trend to the liberalization of policies in countries like China and South Korea. In fact, South Korea is said to provide its gaming enthusiasts with infrastructures like gaming venues, analysts, and coaches. China, home to a large number of esports communities, is vying to be a global leader, with at least six cities being established as major esports hubs.
Mobile-friendly games set to rule the esports industry
Insider Intelligence reports that this belt is home to a staggering 1.5 million users. Given that a large percentage of this population prefers phones and tablets that run on Android or iOS to consoles, they’re coming to be seen as where the future lies. Mobile gaming alone accounts for a mammoth 57 percent of the $173 billion gaming market. This implies that there’s a huge market out there whose potential remains unexplored. Multiplayer arcade games, role-based online games, and online casino games are pegged to experience a surge in user traffic.
Live esports betting- the next big thing?
Live esports betting, though currently unregulated, is one of the newest revenue streams in the world of esports. Given that live betting is already an established entity in conventional contact sports, it might be the right time to embrace this idea and integrate it into esports. Future partnerships between esports organizations and formally recognized betting forms can go a long way in institutionalizing live sports betting, and thus, both parties reaping the benefits.