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  • 10 reasons for eSports being an interesting opportunity for investment


    Esportsbusiness.net Team

    Five years ago, the word ‘eSports’ had no real significance and were nothing more than an illusion. A culture of hardcore video game competitive players existed, but they were nothing more than that — people with a quite practical interest in playing video games for pleasure. Seemingly out of blue, the eSports industry started to dawn was being taken seriously.

    The dawning of electronic sports hasn’t escaped many, which can be witnessed with huge prize pools and a unique appealing to sponsors towards the industry. It doesn’t come as a surprise that 2019 looks set to continue the trend and has set new benchmarks in the competitive gaming industry.

    Interesting numbers from eSports

    Esports is the capital of the modern day, and it only just started to take its root. The world of eSports has a worthy of being a $678 Million industry. It is estimated that with the current growth in the eSports industry, it could pass a $1 billion figure easily by 2018, according to research firm Newzoo. Currently, the firm has predicted that more than 385 million people are following eSports in the form of players, casters, audience, or management. And this is just the beginning, as the firm also predicted the number to reach around 427 million by the end of the year 2019.

    These records and facts have paved the way for investors to make eSports mainstream.

    1. Sporting Agencies investing in eSports!

    Mega eSporting agency WME | IMG is representing professional eSports players, enthusiast, and teams. One of the renowned Marketing and multimedia agency revolutions has made quite an investment in the space and have launched a new eSports consulting subdivision rEvXP. Getting into the mainstream, an award-winning global marketing agency GMR is taking quite an interest in the eSports community with the proclamation that it has launched its eSports consulting practice.

    2. Big Brands making big eSports investments

    Major multinational brands have already started to become a part of the eSports revolution.  Such giant includes the like of Coca-Cola, Red Bull, and Monster, which have profited from becoming early entrants in the industry.

    The big company giants have already shown interest in the future billion-dollar industry. Coca-Cola along with American Express are the sponsors of one of the biggest tournaments in the eSports industry, the League of Legends Championship series.

    3. Renowned personalities getting into the eSports business

    Some of the renowned personalities with huge following and net-worth have entered into the world of eSports. This makes a huge impact on the other investors who are willing to invest in the industry. One big example is of Ashish Mistry. Ashish Mistry is a managing partner at private investment firm BLH Venture Partners. Although Ashish Mistry has an intermediate information about the eSports industry, he has done his homework quite nicely. He understands the needs of a gamer and the current demand of the eSports industry. Therefore, he developed a franchise, KontrolFreek that deals with the accessories for Xbox One and PlayStation 4 controllers for the professional players prefer to use.

    Mark Cuban, the owner of the Dallas Mavericks and renowned Shark Tank “shark," recently disclosed his intent to own a League of Legends franchise. It is also worthwhile to take into that he was a famous player in the Series A round of Unikrn, a company that creates betting options for eSports tournaments

    USM Holdings, a renowned franchise founded by industrialist Alisher Usmanov, is pouring up to $100m into Russian e-sports team Virtus Pro.

    4. Tech giants and Gaming franchises

    Tech giants and big gaming firms are showing their interests in the eSports industry.

    One example is a renowned company, Activision. They want to develop a general platform for the public where they could get information about the latest news in the world of eSports.

    YouTube is another platform which is promoting eSports by offering streaming and other tools for the gamers free of cost. This has not only increased the viewership but also the attention of the people towards the eSports industry.

    Let’s see how the business sector has received the rise of this industry. Well, in anticipation of the industry-wide revenue reaching approximately $1 billion by the year 2018, ESPN, knowing the outcome of the industry, launched their dedicated eSports coverage. Currently, their Twitter page has more than 392K followers.

    5. eSports surpassing traditional sports viewership

    Looking at the eSports industry as a whole has shown nothing but growth and promise. According to the 2017 research report by the SuperData Research, the eSports industry is already worth $1.1 billion. What’s more, major league gaming tournaments and competitions have attracted a global audience of well over 250 million spectators and have become as popular as other so-called “real” sporting events. In the year 2013, the League of Legends Championship sold out the Staples Center within an hour. And in 2015, the same championship sold out the Madison Square Garden, one of the most famous arenas in the world. In 2017, the online viewership for the League of Legends Championship scaled to an astonishing 0,1 billion peak viewers. In the year of 2017, the online spectator audience for DOTA 2’s “The International” crossed over around 11 million peak viewers. Putting these numbers into perspective, when compared with traditional sporting events, TV viewership/audience in 2014 was approximately 25 million for the Masters, a major Golf Tournament, 15.5 million for the NBA Finals, a major globally renowned basketball tournament, 13.8 million for the World Series and approximately 5 million for the Stanley Cup Finals.

    6. Global investment Market

    The eSports market and industry is setting new records in the history of traditional sports. According to SuperData Research, in 2015, the whole industry was worth $748 Million which was mainly due to the marketing and advertising of popular brands and companies. A total sum of sponsorships and advertising is around $579M this year. Asia is currently worth $321M and is slowly giving way to western investments, leading North America and Europe to account for approximately $400M, over half of the global proceedings. It is predicted that by 2018, the market is set to scale to $1.11 billion with the establishment of direct revenue origin sources such as betting sites and amateur competitive platforms.

    It is also estimated that the current net-worth of the eSports industry will rise up to $1.11 billion by the end of 2018. Two regions combined in the world have the total domination in the eSports sector, North America, and Europe. Both of the regions have a 52% impact on the eSports market because of the rapid growth.

    7. Investors taking interest

    According to Newzoo, the investors and brands are expected to spend over $266.6 million this year, a year-to-year growth of around +57.7%. Fans remain more comfortable with betting virtual gaming skins, and content over cash, which cause real-money sites to gain resistance slower than anticipated.

    8. The world loves eSports

    8.1 Asia

    According to the online magazine Fortune, with such a growth in an industrial state, China, and Korea, both carry 23% of all the revenue generated by eSports games and tournaments globally. The pride of the Asian region and the popular League of Legends player, Lee "Faker" Sang Hyeok has a current net-worth of $1.1 million.

    8.2 Europe

    As for Europe, the French Secretary of State Axelle Lemaire has proclaimed the formation of the government-sponsored “France eSports” federation which will oversee the government on regulating eSports.

    The dawn of popularity of competitive multiplayer gaming in the UK is of such kind that a brand new 600-seated eSports arena - the Gfinity Arena – has been completed in Fulham, West London, at the end of March of 2015. The year 2014 saw G3, the UK’s biggest competitive eSports event, with 4000 audiences invaded the Copperbox Arena at Stratford Olympic Park.

    8.3 North America

    The North American region has quite a presence on the revenue in the eSports market. In 2017, as predicted by Newzoo, North American region generates the most revenue per eSports enthusiast. It was a matter of fact that the majority of the revenue in the eSports industry was based on the American region and as a result, it was gaining popularity over time.

    American gamers are passionate about every eSports event that takes place in the states. From amateur competitive platforms to professional level tournaments, all the gamers are marking their presence whether they are gamers, casters, or audience. As a matter of fact, eSports is so popular in the region that 3/4th of the population that love eSports, participate in some kind of competitions whether they are on a national or international scale.

    Currently, in the year 2017, the revenue that North America has generated through the promotion of merchandise, event tickets, advertising, sponsorships, and online advertising is almost $257 million.

    9. Publishers gaining the attention

    The publishers are playing a huge role in attracting investors towards the eSports industry. The storyline and the gameplay of the games are the two most important things that matter. The publishers of the big games like CS:GO, Overwatch, Call of Duty, League of Legends etc. lifted their titles to the big stage by investing their time and money into the game. This is the sole reason why 19% of the US audience is involved in the eSports industry. The eSports gaming is not only limited to PC and controllers but now the publishers are developing new Android/iOS mobile games which will enable further development in the eSports sector.

    10. Betting industry in eSports

    Since professional competitive video gaming has dawned as a sport, eSports betting has started to find its potential. For some years, the fans from all across the globe have put bets on their idol eAthletes, although, it's just recently that online bookmakers such as Bet365 and William Hill have caught the breeze and started to include the eSports in their list of offers.

    Gaming industry research firm Eilers Research estimated that in the year 2018, eSports fanatics would wager more than $550 million on eSports tournaments, and the speculation was on point. eSports betting numbers are firmly believed to continue to rise, with the same firm projected that by 2020, more than $23 billion USD would have been wagered around the world on eSports annually.

    Statistics from online sportsbook Pinnacle are the evidence to this eSports betting prediction. Its numbers have doubled each year, along with taking well over 350,000 eSports bets last year alone. The high amount of eSports gambling/betting on this and other betting sites rank eSports industry as the eight most popular sport to place bets on in the whole world, as stated by the Giants NBC. Esports betting has become so popular that online bookmakers have even initiated to dedicate traders and whole departments exclusively to eSports gambling.

    Conclusion

    Frankly, this is a very captivating topic to consider through the lens of a growing entertainment culture. There is just so much more investment and revenue in sports now than there was in the past, and it's hard to foresee a decline. The amount of money in sports has skyrocketed. We will see a similar development with eSports as more money and investments continue to get into it. Esports gaming is rapidly gaining sport-status through its leverage, hype, players, and fans and last but not the least sponsors. When considering the future of modern entertainment in the world, the digital age becomes more and more transparent. The promise of virtual reality gears and a lot of other technological developments provide a solid proof to believe that there are many more exciting breakthrough advancements to come in the kingdom of gaming, and many more sponsor partnerships and alliances will form in the future. Looking at the big picture, the dawning of the eSports community truly seems to be an indication of the all-time-increasing value that our modern-day society places on “sporting” in all of its types.

    The reason some well-reputed people and organizations are trying to push eSports a sport along with traditional sports is that they want to authorize the community and make it mainstream. We have all the facts and numbers to believe eSports is already set to break into mainstream media and culture.

    Edited by Marian Härtel



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