Know Your Game: Why the Esports Market Is Becoming So Lucrative?
Those under the age of 40 are most likely to have had at least one conversation with family, peers, friends, or acquaintances about eSports due to its widespread popularity. Initially, the concept of eSports was met with skepticism and even ridicule since it seemed absurd to use the term “sports” in the context of video games.
In most cases, debates over electronic sports have been controversial. Since gamers aren’t the first set of people that springs to mind when thinking of sports pros or spectators. The success of competitive gaming may be attributed, in part, to the fact that the business delved into an industry that didn’t exist. There’s no use in arguing about whether or not the electronic sports market is flourishing; the stats speak for themselves.
In a nutshell, eSports are growing in popularity, investment, and income, and this trend is expected to continue. Let’s also consider broader societal trends, such as the prominence of technology and gaming among younger generations.
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The History of Esports
The first major event in what would become known as “esports” occurred in 1972, when 10,000 people competed in a Space Invaders Championship. In 1998, the iconic Starcraft 2 PC tournament attracted over 50 million online spectators, with 17 million coming from Twitch alone. With the arrival of the new millennium, eSports began to acquire significant traction.
Hosts for tournaments like the World Cyber Games and Esports World Cup were introduced, and in 2002, Major League Gaming (MLG) was founded. Regarding hosting electronic sports events, MLG is among the most prestigious names in the industry. It’s true that eSports now have more significant financial backing than ever. The total prize money up for grabs in 2019’s Dota 2 International and Fortnite World Cup was over $30 million.
According to research by Statista, in 2021, electronic sports made over $243 million in the United States and nearly $360 million in China. The industry could only generate so much money with the support of its international audience.
Why the Esports Market Is Booming
In 2021, the worldwide electronic Sports industry was estimated to be worth $1.22 billion. From 2022-2029, the market is expected to increase at a CAGR of 21.0%, going from $1.44 billion to $5.48 billion. The meteoric rise can be traced back to the advent of content and streaming platforms like Twitch, YouTube, and Facebook Gaming, as well as Chinese ones like Huya and DouYu, which have enabled the creation of a global audience for the most competitive aspect of video games and digital entertainment.
This has been greatly aided by streaming, which has given rise to true mass idols like Ibai Llanos, who broke into the realm of digital entertainment as an eSports commentator, and TheGrefg, who broke a Guinness World Record by amassing more than 2.4 million viewers on Twitch for the unveiling of his Fortnite skin in 2021.
Fast-Pacing Technology Plays Its Role
Constant technical advancements have also led to a worldwide explosion in competitive video gaming competitions. Several reasons, including rising interest in mobile gaming, evolving consumer tastes in entertainment, and the widespread availability of high-quality PC and console games, promote the online gaming sector to expand. The industry’s fast growth may be directly attributed to the widespread availability of smartphones and improvements in Internet infrastructure.
With such a large global prize pool and lucrative streaming market, electronic sports is now pursued as a professional endeavor. More and more academic institutions have started providing a curriculum explicitly aimed at training experts. The growing popularity of gaming competitions and the acceptance of eSports as a legitimate career path on a global scale, thanks to large prize pools, growing streams of cash, and lucrative personal endorsement deals, are all factors fueling the industry’s expansion.
Types of Esports Tournaments
Big competitions and gatherings are starting more frequently now that physical events will resume. To allow fans who can’t participate in person to still enjoy the live contests and presentations, some have created a hybrid event setup. Major types of esports tournaments:
- First-person shooter (FPS) tournaments: Apex Legends, Call of Duty, Halo.
- Multiplayer online battle arena (MOBA) events: Dota 2, League of Legends.
- Fighter game events: Super Smash Bros, Mortal Kombat.
- Sports game events: NBA2K, Madden.
- Card games and real-time strategies.
Challenges Esports Faces
For businesses and advertising agencies around the world, Esports represents an intriguing profit potential due to its ongoing development and expansion. Sure, when you factor in the support of financiers, influencers, celebrities, PR firms, and media organizations, eSports has an excellent chance of maintaining its financial grasp. However, this same growth might lead to a few problems that marketers won’t be able to overcome without some effort. Despite its continuous rise, the industry faces some challenges.
Female participation in competitive gaming settings must be encouraged. Improved gender balance is required. Due to the persistence of certain harmful practices in online competitions, electronic sports have yet to succeed in transforming preconceived gender notions about the industry.
Esports’ reliance on sponsorship is a significant obstacle that must be solved. Given the uncertainty of marketing budgets in the current climate and the failure of some established brands to adapt to the new expectations of their younger customers, it is crucial to strengthen other facets of the industry to ensure its long-term viability and profitability.
Recent Electronic Sports Statistics
A person becoming the world’s top performer in any field is always interesting to watch. The phenomenal skill developed over hundreds of hours of commitment is astounding to witness. Many gamers have set incredible records in competitive gaming. There have also been other milestones, such as prize money, attendance, and more. Here are some interesting statistics to know about the industry.
Largest Team Tournament Prize Pool ($40M)
The record for the largest prize pool (also the most prominent team prize pool) was set during the International 2021 in Romania, with a total of $US40,018,400. In the Dota 2 tournament that ran from October 7th to the 17th, 2021, eighteen teams faced off against one another. Team Spirit took home $18,208,300 as the victor.
Biggest Individual Tournament Prize Pool ($15.2M)
One may compete in electronic sports alone as well as in teams. The 2019 Fortnite World Cup Finals featured the highest payout, at $3 million for first place and a total prize money of $US15,287,500 (Kyle Giersdorf – Bugha).
Most Watched Event
Over 5.1 million people tuned in during the 2022 League of Legends World Championship, making it the most-watched competitive gaming tournament in history. This is almost a million more people than watched the League of Legends World Championship in 2021, which was the previous record holder.
The table below shows the top esports tournaments and the corresponding prize pools.
|Dota 2||$219 million|
|Counter-Strike: Global Offensive||$87.1million|
|Epic Games’ Fortnite||84.4 million|
|League of Legends||$73 million|
|Blizzard’s Starcraft II||32.1 million|
According to Esports Earnings, here are five of the highest total prizes awarded in an electronic sports tournament (Dota 2) according to countries:
- $7 172, 436.83 (Denmark)
- $6 486, 400.02 (Finland)
- $6 024, 411.96 (Australia)
- $5 823, 909.40 (France)
- $5 690, 417.57 (Finland)
The Future of Esports
Introducing cutting-edge technologies into the electronic sports market, such as blockchain, artificial intelligence, the metaverse, and augmented reality, will usher in a fascinating new era of cutthroat competition.
By introducing novel forms of interaction and facilitating decentralized monetization of intellectual property, the industry will grow and prosper by providing more value to fans. The development of guilds where players participate in “play to earn tournaments” enables gamers to gain money, which might aid the industry’s long-term viability and acceptance.
There are no signs of the esports industry slowing down any time soon, even though it has already reached and exceeded the $1 billion mark. With more and more young people thinking about making a living in the game industry, competition is sure to increase, and there is a large room for continual growth. Mobile is likely to be the industry’s driving force in the future, lowering barriers and allowing an influx of new players and fans. All in all, esports is a promising sector both for gamers and investors.