In recent years, gaming and eSports have burst into the mainstream as a central entertainment form worldwide. Starting as nothing more than a vibrant niche, ticket sales today continue to transition from arenas to the internet. This young sector brought numerous changes to the economy as we know it, and understanding eSports for beginners can be challenging.
Consumers, media outlets, brands, and global investors keep a close eye on integrating competitive video games into popular culture. Explosions in eSports revenue and investment are a direct result of this integration. According to Insider Intelligence projections, between 2019 and 2023, total eSports viewership will grow at a CAGR of 9% (from 454 million to 646 million). So, if you’re looking for the right way to place your bet, you’ve just found it.
eSports For Beginners: The Current State Of Things
Millennials comprise the majority of eSports players and audience. Therefore, this customer base is the publishers’ primary target. The targeting efforts include game availability across different platforms (mobile, PC, console) and gameplay experience personalization.
For instance, across all platforms combined, Fortnite generated US$296 million of revenue in April 2018. This number far exceeded the annual revenue of any significant PC or console game at the time. Thanks to new gamers continuously entering the ecosystem, there are expectations of increasing audiences, resulting in higher future revenue.
Another evident industry trend features organizations emerging for governance to help improve eSports further. Examples include the Esports Integrity Coalition and the World eSports Association (WESA). These associations aim to investigate and eradicate match manipulation and other cheating forms and protect competitions’ integrity by working with eSports shareholders.
In addition to complementing the market’s growth, these efforts additionally improve the already positive outlook on the industry’s future.
What Will Happen In eSports In 2021 & Beyond?
Understanding even eSports for beginners requires understanding the financial structure at the industry’s core. Advertising is one of the most practical and lucrative revenue streams in today’s global economy, and the eSports sector is no different.
Ads that target eSports viewers generate most of the advertising revenue. These advertisements include those on eSports TV, on video-on-demand matches content, on online platforms, and during live streams.
Estimates indicate that platforms like YouTube and Twitch will stay at the forefront of revenue generation. For example, Streamlabs revealed that, in 2018, the two platforms featured 432,000 and 1.13 million active streamers, respectively, per quarter. Because more and more streamers continue to emerge, the need to advertise relevant content will also rise proportionally. Industry revenue will also grow thanks to these ads.
Additionally, in April 2018, Activision Blizzard partnered with Nielsen to track Call of Duty and Overwatch leagues’ viewership. Accurately gauging these events’ viewership was the partnership’s goal, and the results were impressive.
On September 29, 2019, there was a 16% viewership increase of the Overwatch League Grand Finals compared to the same event in 2018. The global Average Minute Audience (AMA) of the event clocked 1.12 million viewers. The partnership proved effective as the viewership statistics helped Activision Blizzard generate lucrative advertising and investing partnerships.
Consequently, the advertising segment of eSports revenue generation will continue to develop and take center stage in terms of importance.
Regional Dominance: China
When it comes to researching eSports for beginners, it’s impossible to ignore China’s significance in the industry. eSports are wildly popular among Chinese youth, and the government is highly supportive of the sector’s market growth. These factors indicate that the world’s most populous country will become a key global player in market share.
The examples of such ambitions are numerous. The city of Hangzhou will transform into the world’s eSports capital thanks to several large-scale investments. City officials announced US$2.22 billion (RMB15.45 billion) investments and constructing no less than 14 eSports facilities by 2022. Additionally, this city will host the 2022 Asian Games, which will feature eSports as an official medal event.
China is home to several prominent players and companies, such as Tencent Holdings Ltd. This company developed “Honor of Kings,” a game that earned US$1.3 billion in revenue in 2018 and helped popularize eSports in the country. The company has also announced plans for tournament expansions in games like Honor of Kings and League of Legends, all of which will draw viewers and players globally.
Nike, Inc. also recognized the Chinese LOL Pro League (LPL) opportunities before signing a four-year deal with the League in February 2019. Nike will provide professional jerseys, casual clothing, and sneakers to every roster in the league. The LPL league worldwide visibility should increase as a result of the Nike-sponsored jerseys.
The Chinese market will continue to see significant eSports investments, making this country a crucial player in the growing industry in 2021 and beyond.
Partnerships Between eSports And Other Prominent Organizations
One of the elemental eSports for beginners lessons is that recognizing leagues’ popularity creates a unique opportunity. Companies that enter the market with this lesson in mind can expand their geographical presence and gain a competitive advantage. These companies increase their geographic visibility by acquiring, merging, partnering with, and even organizing entirely new sports leagues.
For example, FIFA partnered with Electronic Arts Inc. in October 2019 to launch the EA SPORTS FIFA 20 Global Series. This competition will see local events across 20+ of the world’s most notable football leagues, with more than 60 nations providing millions of participants.
Moreover, the Intel Corporation and the Electronic Sports League (ESL) created a similar partnership in December 2018. The two organizations would introduce the latest technologies and organize events and tournaments worldwide to promote eSports’ advancement.
Intel also revealed it would provide high-powered computer processors to boost the electronic sports’ profile globally by investing more than US$100 million. More and more companies recognize the eSports industry’s potential.
The previously mentioned Tencent Holdings Ltd., Riot Games, Inc., Activision Blizzard, and Modern Times Group are some of them. These organizations will soon grow to become household names in both eSports for beginners and seasoned gamers alike.