Some sports fans enjoy going to stadiums to socialize with others who share their passion for the game. Some people initially thought that eSports—watching people compete in video games—was a boring concept because it kept people at home. Things changed, however, when StarCraft: Blood War was released in South Korea in 1999.
StarCraft’s assistance in the eSports industry enabled a successful transition to mainstream media. Professional teams were sponsored by well-known corporations, and tournaments were broadcast on television screens around the world. The influence of StarCraft on the eSports community was widely acknowledged.
With competitions like the ‘League of Legends World Championship’ in 2015, which drew 43,000 audiences, more people became interested in eSports, especially after learning about the large prize pools.
Every year, the eSports industry, like the online casino industry, expands. This includes an increase in revenue as well as the number of viewers. However, this industry is not purely supported by viewers. Other sources of income are also contributing to its expansion.
In this article, we’ll look at the eSports industry’s growth rate and how it generates revenue. We will also investigate why this sector is strong enough to compete with traditional sports.
THE DEVELOPMENT OF THE ESPORTS INDUSTRY
Esports was once considered a subset of sports culture, but it has now blew up into its own industry. According to a report published by OKBet Esports, the global audience is expected to reach 474 million by 2021, with revenue exceeding one billion dollars.
In 2016, the number of people who watched eSports occasionally or enthusiastically began to rise. This resulted in a 12.3% increase in industry viewership between 2018 and 2019. In 2019, the industry had 198 million enthusiasts and 245 million casual viewers.
There is no secret that live-streaming games have grown in popularity in recent years. Global viewer numbers increased by 10% in 2020, and this figure is expected to rise to 728.8 million by 2021. The pandemic has been a major driving force in the expansion of live streaming, which is expected to continue until 2024.
Yearly eSports Revenue Growth in China
China leads the world in both eSports enthusiasts (92.8 million) and live streaming audiences (193 million). In addition, the country leads the industry in revenue generation ($360.1 million in 2021). North America earned $243.0 million, while Western Europe earned $205.8 million, putting them in second and third place, respectively.
5 REASONS WHY ESPORTS IS PROGRESSIVE
- ESPORTS ARE BECOMING MORE COMMON.
The increasing obscurity of eSports is a major factor behind its growth. According to OKBet Esports, only 800,000 people were aware of it in 2015. However, as more people are introduced to it, that number will rapidly increase.
Meanwhile, the audience becomes more restless with each passing year, and over 1.43 billion people were familiar with eSports in 2018. According to OKBet Esports’ research, global awareness will reach 2.0 billion people by 2020.
The rise of Covid-19 benefited the video game industry as well. People who were confined to their homes found solace in eSports. Record-breaking games such as Call of Duty or Fortnite, as well as social media posts about them, increased their popularity and forced more people to learn about them.
Another factor to consider is how well-known celebrities and athletes regard eSports. Michael Jordan’s $26 million investment in eSports gaming in 2018 helped the industry grow and attract more people.
- THE COVERAGE OF ESPORTS IS EXPANDING.
The growing popularity of eSports implied a more efficient method of reaching viewers than the single platform currently in use. There was also the risk that some viewers would lose interest if they couldn’t watch due to technical difficulties. To address this, streaming platforms were created, allowing people from all over the world to easily access and enjoy eSports matches.
Twitch was founded in 2011 and has since become the most popular streaming platform. The website grew in popularity by focusing solely on esports and speed-running broadcasts. Twitch was later purchased by Amazon, who then gave the site a much-needed facelift in order to increase value for streamers.
According to OKBet Esports, Twitch is preferred by the majority of streamers over other platforms, with a 91.1% market share for hours broadcasted. In 2020, 889 billion minutes were viewed on Twitchtracker. Among the most influential factors are the shutdown and the rise of Covid.
Other live-streaming platforms, such as Twitch, have emerged in recent years. The service provides both real-time streaming and basic video search functionality. The ESL App was developed in collaboration with ESL Pro League and other mobile esports such as Clash Royale. Facebook gaming, which was recently launched, has already secured exclusive broadcast rights and has a 3.4% market share.
- THE ESPORTS WATCH TIME HAS INCREASED
As eSports become more popular and accessible, so does interest in watching them as an alternative to traditional sports. As a result, the gaming industry profits more from hosting viewers for extended periods of time.
According to OKBet Esport’s report, when it comes to eSports, more than 7.46 billion hours were watched globally on all streaming platforms in Q3 2020. YouTube Gaming saw the greatest increase of any platform, with 10.5% more views and 1.68 billion cumulative content hours watched during that quarter. As a result, YouTube Gaming’s market share increased by 2%, for a total of 22.5% viewing hours.
Facebook Gaming is still booming, with over 1 billion hours of content watched on the platform. It now has a 14% market share, up 1.4% from the previous quarter.
Twitch’s watch time decreased from 5.12 billion to 4.74 billion in Q3. However, it remains number one on the list due to its 63.6% market share.
- Brands Sponsoring eSports on the Rise
It’s no surprise that brands want to invest more in the eSports industry, considering the large number of gamers worldwide. It is estimated that 2.7 billion gamers worldwide spend approximately 6.5 hours per day playing games.
Besides, 43% of eSports viewers earn $75,000 per year, demonstrating their purchasing power, according to OKBet Esports. As a result, many companies have partnered with and sponsored the games as well as the players. And, by providing marketing services to businesses, eSports sponsorships generated over $456 million in revenue in 2019, making it the industry’s most profitable source of income. After collaborating with the, PepsiCo was one of the first companies to implement this marketing strategy.
Afterward, Mastercard backed League of Legends, and Mercedes-Benz collaborated with ESL. Intel, a company that has never been associated with sports or gaming, offered to sponsor the Overwatch League.
On the other hand, a few businesses took the lead to empower underserved segments of society through innovative marketing methods. Bumble joined forces with Gen.G to form an all-female squad to compete in Fortnite. Lenovo formed a team of Silver Snipers, or people over the age of 65, and assisted them in competing in the gaming industry as Silver Snipers.
- TOURNAMENT EXPANSION IN ESPORTS
What else can you expect when there are millions of fans and competitive gamers involved? Despite the fact that Covid-19 made it difficult to organize large-scale tournaments, it is expected that the trend will continue to grow in the post-pandemic era.
There were 4579 tournaments in 2018, with 23,020 active players competing in them. During the year, the average earnings of each player were $7160. So much people participated in competitive gaming in 2019 and made good money doing that. 27,279 players participated in 5288 tournaments, earning 42% more than the previous year. The total revenue was $234,433,656, with each player receiving about $8,594.
2020 was a challenging year for professional gamers, with only 4228 tournaments held and each player earning an average of $5,030. 2021 has brought new challenges, but the players have earned a total of $30,135,047 so far.
One of the most well-known outcomes of the increase in events is the increased popularity of esports betting. According to Forbes, while Corona harmed player earnings, there was a significant increase in eSports wagering. The disruption of live sports events such as football, basketball, and tennis was thought to be the primary driver of this area of sports gaming.
Therefore, as other sports resume, eSport gambling is expected to fall. However, if a significant number of bookies choose to stick with it, eSport betting has the potential to be a profitable sector for the betting industry following the pandemic.
