It all started with friends and their computers organizing LAN parties over weekends. These LAN parties transformed into online multiplayer games, then competitive online games, and ultimately they gave birth to eSports.
Some dismiss eSports, and video games, in general, as a flippant branch of the entertainment industry. From a business point of view, in turn, video gaming is everything but flippant. And eSports is on its way to becoming a multi-billion-dollar industry in the coming years.
eSports has seen explosive growth in the last decade, both in the number of players and the number of followers. The second category has grown faster than ever before: the number of occasional viewers has grown from 160 million to more than 200 million between 2016 and 2018 and is expected to exceed 300 million by next year, maybe sooner. At the same time, the number of “enthusiasts” – people who watch professional eSports content more than once a month (as opposed to the above-mentioned “occasional” viewers) is expected to exceed 222 million this year, growing by 12% compared to 2019.
The gaming industry is the fastest-growing branch of the massive entertainment business. It has several revenue streams, from selling the physical copies of their games to digital downloads, in-game purchases, microtransactions, and ads (especially on mobile). While the gaming industry is feeling the effects of the pandemic right now, its revenues are unlikely to fall – on the contrary. With more people stuck at home, player numbers are growing – and so do revenues.
eSports has a completely different revenue structure, similar to traditional sports. More than half of all the money comes from sponsorships, with the rest coming from media rights, publisher fees, and streaming revenues. A generous sum is made from ticket and merchandise sales – each year, there are several major live events held in various locations. In a normal year, that is – 2020 is an exception, with several events postponed and canceled this year.
For 2020, specialists expect eSports to generate more than $1 billion. And for the coming years, they expect the eSports revenues to continue to grow fast.
The biggest eSports games today are the “usual suspects” – League of Legends, Fortnite, DotA 2, and CounterStrike: Global Offensive. These have the biggest viewership and the biggest prize pool of them all. There are, in turn, several “traditional” sports brands that have ventured into the eSports territory in recent years.
One of the biggest is FIFA that, together with EA Games, is behind the FIFA eWorld Cup, around since 2004, but there are many other contenders, like MotoGP with its eSports Championship, and the Formula 1 Esports Series, sanctioned by FIA, founded in 2017.
eSports is considered by many the only sport aside from association football with a truly global audience. It is a combination of two of these days’ most popular pastimes: playing video games and streaming game-related content. If all goes well, eSports will become a massive industry, one that – as some suggest – may even outgrow popular sports like the NFL.