How Will Esports Be Worth $2.3 Billion By 2024?
The landscape is changing, and competitive gaming is fighting for the top spot on the entertainment charts.
In 2019, the esports industry boasted a global revenue of around $1.3 billion, and that figure is set to almost double within the next five years. We’ve seen a sharp uptick in the popularity of esports in recent years, and that trend is set to continue exponentially as time goes on. There’s a wealth of opportunity in the esports industry for gamers, broadcasters, and sponsors, a fact which is sure to propel esports ever upwards over the next few years.
As an entertainment medium, gaming has been growing at a rapid rate over the last decade, with there now being an estimated 2.5 billion gamers in the world. The introduction of next-generation consoles, the growth of PC as a popular platform, and the world-class offerings from developers have made gaming a very wealthy vertical. Today, playing videogames competitively can make for a very lucrative career, with the modern gamer assuming the form of the new celebrity.
Esports Sponsorship
In 2020, esports sponsorship experienced a feeding frenzy, with top brands and labels looking to secure hefty contracts in exchange of endorsement. It’s estimated that around 58% of all revenue in the esports industry comes from these sizeable sponsorship deals. Some of the most prolific partnerships in recent history include the pairings between Cloud9 and the U.S. Air Force, Disney’s Marvel with Team Liquid, and Red Bull with Tempo Storm.
There are countless entrepreneurs and business people around the world actively identifying the value in esports. In 2018, Michael Jordan invested a considerable sum of money in Team Liquid’s parent company, contributing to a massive $26 million round of funding. Then, in 2019, musician Drake announced a co-ownership venture and investment in 100 Thieves, one of the most prolific teams on the esports scene.
Prize Pools on the rise
Furthermore, prize pools are set to rise as the value of the industry is propelled ever upwards. This increase in value will cause an increase in value, with more competitors getting involved than ever before. We’ll see an expansion of teams being created, which will undoubtedly lead to further sponsorship opportunities. Then, we’ll likely experience an increase in both the number and stability of championships and leagues across multiple titles and platforms.
The Potential of Broadcasting Right
Toward the end of the road lies a deeper scale of monetisation, with the potential for broadcasters to begin placing high-profile events behind paywalls. It’s no big secret that another huge portion of esports’ value comes from broadcast rights, and if paywalls and subscription barriers were made uniform across the industry, that value would skyrocket. It’ll take just one organisation to capitalise on this notion to kickstart the chain of events that’ll follow, but it’s not something anyone can envision at the moment.
Ultimately, the esports train doesn’t appear to be slowing down any time soon and the value of the industry as a whole will certainly increase as time goes on. In 2021, we’ll see the Call of Duty League, Dota Pro Circuit, BLAST Premier Series, IEM Katowice, ESL Pro League, and Worlds 2021 among many, many other tournaments. It’s a bustling year for esports and, despite most of these competitions now being completely remote, should make for some exciting watching.
