Esports is an emerging market that has been deemed profitable since its very beginning in the 2000s. However, the scale at which it is growing was not anticipated either by investors or by the gamers themselves. 2017 is preparing a new milestone in the era of esports economy, with the new forecast issued in a first official report of its scale “The global growth of esports: trends, revenues and audiences towards 2017”.
We decided to take a look at the industry and the promising growth that it demonstrates.
Esports Head-Spinning 2017 Forecast
Esports mainly consists of global championships in video games, the most popular being multiplayer battle arena games, real time strategy, first-person shooters and fighting. The most popular games played are Dota, League of Legends, Counter Strike. The games are played on a competitive basis by professional gamers, a profession that was not known before.
In terms of fans, it had an estimated 71,5 million viewers worldwide in 2013, with 89 million in 2016. In 2017, this figure will surpass 140 million fans all over the world. The rate at which the industry fandom is growing is plus 29% yearly, which is a stunning speed or growth never before seen by any individual sports. This is explained by the fact that, 10 years ago, playing esports was mostly popular in Asia, and now the market is actively penetrating Western territories. An average fan spends 56 dollars a year on esports-related purchases and events. This figure seems even more impressive since the number of championships held on a global scale grew from 10 in 2000 to 260 in 2010.
Regarding total revenue generated by the industry, it is estimated to generate 451 million dollars within the next 2 years, provided that the same revenue indicator in 2016 was at 194 million dollars. The growth rate, thus, constitutes 22%.
The main revenue generating sources for esports are fans and online advertising. Together with direct investments from game developing companies, it is still not a full-time investment opportunity. However, things are slowly starting to change for the better, as more investors turn to direct tournament investments.
Comparing Sports and Esports
Esports is often compared to the sports industry, however, experts do not deem this comparison entirely fair. Sports industry counts with many individual sports, and esports is more comparable to any kind of individual sports, like football, swimming or tennis, Globally, sports industry makes 2.2 billion, which can be non-discriminatively compared to 1.2 billion of the gaming industry in total.
Esports has not yet been recognized as professional sports, and there is an ongoing debate on this topic. There are opinions in favor of it as a sport because it requires precision, timing and accuracy that most sports do as well. Its ever growing popularity also adds arguments in favour of it being recognized as professional sports. The Olympic games organizers are currently discussing the possibility of esports being played as part of their competition.
Esports is also a niche for betting revenues. It is represented in many online casinos, like Maria.com casino, as an odds betting event. In total, betting on esports generates 100 million dollars yearly, and it is currently at number 7 in the list of most revenue-generating betting markets.
A big question stays: will esports industry ever be able to surpass a 1-billion-dollar revenue threshold in the nearest future? If so, this will be an indicator that more serious investments into the industry could be considered. Although a recent report from Newzoo gives the industry modest prognosis for growth, there is little doubt those figures can be achieved. For this to happen, the industry must find ways to further increase numbers of followers throughout all the 5 continents.
