Video games are becoming more popular by each passing year and more gamers are finding their way into new trend called virtual world. As the name suggests, esports (electric sports) turns online gaming into a spectator sport. It mimics the experience of watching a professional sporting event, except instead of watching a physical event, spectators watch video gamers compete against each other. Gaming is no longer just a hobby for many. Professional gamers are finding their way into professional eSports and compete against each other in competitions for sometimes high prize money. Gaming and esports are two completely different things. Esport is defined as “the playing of video games on a competitive level with teams or individuals facing each other within leagues or in tournaments.” It describes the world of competitive, organized video gaming. Competitors from different leagues or teams face off in the same games that are popular with at-home gamers: Fortnite, League of Legends, Counter-Strike, Call of Duty, Overwatch and Madden NFL, to name a few. These gamers are watched and followed by millions of fans all over the world, who attend live events or tune in on TV or online.
According to the research report, “Global Esports Market Research, 2028” published by Actual Market Research, the market is anticipated to attain market size of USD 4380 Million by 2028, increasing from USD 1684.39 Million in 2022. The overall market is projected to grow with 17.52% CAGR for 2023-2028. With over 320 Million fans worldwide, esports is fast becoming a gaming mainstream industry. The eSports industry has seen tremendous growth over the years, both in terms of viewership and revenue. The increasing viewership is what mainly contributed to the revenue growth – and it's not just because those viewers are generating revenue. Seeing the potential of reaching a large and engaged audience, brands are investing in eSports marketing, both directly and indirectly. This has contributed to rapid revenue growth in the industry, only slowed down by COVID limiting significant public eSports events, although things seem to be returning to normal in 2022. eSports has also experienced growth in several other aspects, with many of them interrelated in one way or another. Dota2, Fortnite, League of Legends, and Counterstrike: Overwatch and Global Offensive are the gaming industry leaders. The video gaming industry has evolved from a hobby to a professional career option. The tournaments are attracting investors, including celebrities and international brands, as sponsors due to the immense engagement of fans for esports tournaments.
Based on the report, the market is segmented into various parts including sponsorship, media rights, merchandise & tickets, publisher fees, digital and streaming. Among them, sponsorship segment leads the market with more than 59% market share in 2022. Sponsorship revenues have been the foundation on which the esports market was built, so it’s no surprise that it continues to be the highest-grossing revenue stream. The increasing competition in the sponsorship industry has led brands to seek differentiation and authenticity through sponsorships in the esports and gaming industry. Many non-endemic brands chose to enter eSports on the familiar ground through a digital extension of existing traditional sponsorship relationships—for example, football with the eSports extension of FIFA. Blockchain companies are boosting sponsorship growth in esports by investing high figures into teams and tournaments to reach the esports audience. Digital and streaming are the two fastest-growing revenue streams for esports. The increasing awareness of digital assets that came with NFTs is likely to boost investment and fan interest in acquiring in-game items of esports IP.
The global esports market is further segmented into various device types including mobile (smartphone, tablet, etc.), PC (laptop, desktop), gaming device (console, handheld devices) and other (VR, smart TV, etc.) Among them, mobile segment is leading the market in 2022 and is expected to continue its dominance during the forecast period due to improvements in game quality and internet usage by millennials. As of April 2022, there were more than five Billion internet users worldwide, which is around 63% of the global population. Furthermore, due to its wireless portability and cost-effective usage, smartphone adoption for playing Esport is significantly increasing among end-users, which adds significantly to the global market's growth. Based on the latest data reveal, the number of “unique” mobile users was close to 5.48 Billion in October 2022. On the other hand, the growth of the Esports gaming console segment can be attributed to a variety of benefits provided by these devices, such as high gameplay quality, which results in a better gaming experience. Further, penetration of 5G network, VR and AR technology, smart & connected devices are projected to witness higher market growth during the upcoming timeframe.
According to the report, the global market is segmented into five major regions including North America, Europe, Asia-Pacific, South America and Middle East & Africa. Among them, Asia-Pacific market is anticipated to lead the market with more than 45% of the market share. Countries including China, Japan, and India are anticipated to experience robust demand considering the rapid shift on digital platforms for entertainment through sports events. Based on the country segmentation, China and USA together contributes for around 40% of the global market. China has the highest number of active esports players and tournament viewership thanks to new technologies with mobile devices and live-streaming. According to the research, in 2019 there were more than 5,000 esports teams and clubs in China, with about 100,000 professional esports players and a total of 500,000 people employed in the industry. Both PC games, such as League of Legends, and mobile games, including Wild Rift, Honor of Kings, and Peacekeeper Elite, are very popular in China. However, with a massive esports audience and an even bigger commercial structure underpinning that audience, a number of notable tournaments and leagues call the US home. This includes both domestic-oriented tournaments, such as North American portions of wider international leagues, as well as playoff tournaments in international circuits. The United States is one of the largest gaming industry markets and has the most extensive library of games available to its citizens.
The Asia Pacific is anticipated to dominate the market during the projected period. The growing number of internet users and mobile gaming has fuelled the growth of esports in the region. Younger population influences the shift to a ‘mobile first’ mentality where the region’s increasing online population and high smartphone penetration contribute significantly to the growth of mobile esports. As infrastructure and internet connectivity continue to improve, it will play a part to enable the growing gaming ecosystem in the region. Asia has always had a huge influence on the development of the hypercompetitive esports world. As an esports powerhouse, APAC owns the highest share of the global gaming market, has the largest gaming communities and the growth of Esports in Asia-Pacific is accelerating. In April 2022, Korean Esports Association (KeSPA) signed a three-year sponsorship deal with SK Telecom. The agreement has made SK Telecom an official sponsor of KeSPA and will train the Korean esports team for upcoming Asian games. Such initiatives and developments in the market are expected to fuel further growth in the forecasted period. Ninjas in Pyjamas, Victory Five, CF E-SPORTS, Four Angry Men, Gen.G, Royal Never Give Up, Heavy, Saigon Buffalo, Team Wolf, Sina Corporation, Blacklist Internationala and Bigetron Ace are some of the leading esport teams across the region. Livestream platform for esports present in Asia-Pacific includes Facebook Gaming, Twitch, Afreeca TV, bili bili, Nimo TV, YouTube, Booyah, Kakao, Penrec.tv, loco, Dohyu, Huya and Garena.
In North America, the rising number of tournaments & events with attractive prizes and long-term investment initiatives undertaken by market players are estimated to open new growth avenues for the esports market during the forecast period. The constantly growing esport industry across various nations of this region is attracting more people towards this industry and opt it as their professional career. In addition, many universities and colleges in this region are offering professional courses for students as well as scholarships for the top gamers or esports players, which are fuelling the growth of the regional escorts market in the upcoming years. By organizing competitions for kids, assisting high schools in establishing esports clubs, and providing mentorship and coaching, the North America Scholastic eSports Federation (NASEF) aims to develop the ecosystem. In 2021, the North America Scholastic esports Federation partnered with Tallo. The alliance has established the most incredible online network of companies, young esports talent, and academic institutions. Amazon-owned "Twitch" is the dominant platform of choice for viewers while YouTube, Facebook, Mixer (Microsoft) and other independent streaming platforms control the rest of the market. Broadcast TV is also inching its way in, as evidenced by League of Legends' recent deal with ESPN+. 100 Thieves, The New York Excelsior, Team EnVyUs, Sentinels, cloud9, team tribe, team liquid, NRG, Gen.G, Rogue, evil Geniuses, Immotals, Team SoloMid and FaZe Clan are some of the leading esport teams across the region.
However, Europe is one of the most lucrative markets for video game consumption in the world, ranking behind North America and Asia Pacific in terms of revenue share in global games market. Europe games market is majorly acquired by the major countries such Germany, the United Kingdom, France and Italy. With more than 77% penetration of smartphones in Europe, more than 30% population of Europe plays games online on their smartphones. The past decade has seen the popularity of esports skyrocket throughout Europe and the rest of the world. Audience numbers are rapidly rising, for esports enthusiasts and occasional viewers alike. And just like in the wider games market, this engagement is translating into increased revenues. While women’s engagement is growing on an enthusiast level, there are also more women entering the market as competitors. In 2019, for example, an all-female pro League of Legends team competed in the LCL, the highest level of professional League of Legends competition in Russia. The most frequent consumers of esports are the much sought-after Millennials and Generation Z. Team Vitality (France), Natus Vincere, G2 Esports (Germany), Astralis (Denmark), Fnatic (UK), Guild Esports, Virtus.pro, Gambit Esports, Ninjas in Pyjamas and SK Gaming are some of the leading esport teams across the region. Also, CCT West Europe Series #1: Closed Qualifier, CCT North Europe Series #3, RLCS 2022-23 - Winter: Europe Regional 1 - Winter Open, IEM Brazil 2023 Europe Open Qualifier 1, RUR Frost Cup 2023, ESEA Cash Cup: Europe - Winter 2023 #2 and OlyBet Tournament #1 are some of the upcoming events.
Based on the game type, the market is categorized into shooter (first-person shooter & third-person shooter), multiplayer online battle arena (MOBA), Real-time strategy, fighting and others such as role playing, simulators, racing & sports. Among them, shooter games as well as multiplayer online battle arena games are contributing for more than 60% market share in 2022. Various game providers are offering a vast number of first-person shooter games. The games earlier offered a realistic 3D environment. Its popularity in virtual and video games is surging its demand in the market. With the recent explosion of web3, blockchain, and cryptocurrency technology, companies in these spaces have also joined the race in getting involved with sports. The Staples Center being rebranded as the Crypto.com Arena and Coinbase’s $7 Million QR code ad is just some of the most buzzworthy examples. In eSports, these large checks and deals are also widespread. London based team Fnatic, for example, signed Crypto.com’s first eSports deal in late 2021, amounting to $15 million. Also, in early 2022, crypto exchange Bitstamp signed with UK-based Guild Esports in a $6.1 million deal. The growth of esports has been phenomenal, with new games being launched every year. Esports is also making its debut at the 2022 Asian Games in China, featuring games such as DOTA 2, League of Legends and EA Sports FIFA. In the same year, major valuable esport teams include TSM (Team SoloMid-Los Angeles), G2 Sports (Berlin), Team Liquid (Netherlands), FaZe Clan (Los Angeles), Cloud9 (California) and 100 thieves (Los Angeles).
Key Industry Developments:
• January 2023 - Furia, a Brazilian eSports organization, opened up a new venue in Miami, United States. This 5200 square-foot establishment dubbed as 'Furia Experience' is part of the company’s efforts to expand its presence in the U.S.
• November 2022 - An India-based eSports start-up called Gamerji announced that it had raised US$ 3 million in a Pre-Series A funding round that was led by Unicorn India Ventures and GVFL. The company allows gamers to host and compete in eSports tournaments.
• August 2022 - Regression Games, an eSports company founded by Aaron Vontell bagged US$ 4.2 million in a seed round that was led by New Enterprise Associates (NEA), a global venture capital firm. The AI-focused organization was expected to use the capital to expand its engineering team.
• 2022 - Digital Virgo, a France-based specialist in mobile payment with Etisalat Misr, and the Egyptian Telecom company launched a full-service E-sports platform for delivering top-tier educational and entertaining content in Egypt.
• January 2022 - A new category of 1440p NVIDIA G-SYNC esports screens and seven new games benefit from low latency thanks to NVIDIA Reflex. Since reducing system latency is recognized by gamers and game developers as essential to a quality gaming experience, the NVIDIA Reflex low latency ecosystem has grown significantly over the past year. Eight top-ten competitive shooters, including Apex Legends, Valorant, and Fortnite, support Reflex. Each month, more than 20 million GeForce gamers battle with Reflex ON. More than 50 mouse and screens support their Reflex Analyzer, enabling players to assess system latency quickly. Such developments are expected to flourish the esports market in the forecast period.
• February 2022 - Nintendo delivered its first Direct event of 2022 in a 40-minute presentation that featured several brand-new games and remakes. Highlights from Nintendo Direct 2022: Switch Sports, Mario Strikers, and announcements of other games. The market is expected to expand due to the release of multiple games.
Product Launches and Product Expansions
• On February 2021, Electronic Arts Inc. announced a multiyear UEFA license extension, ensuring the pinnacle of club football remains exclusive to EA SPORTS. EA is expanding football video game access through multiple in-development mobile offerings, and by broadening the PC free-to-download FIFA Online 4 title’s reach to potentially 80 million players in more than 15 new countries.
• January 2020: Activision Blizzard announced the league for Call of Duty. This launch aimed to make Activision the largest operator of professional electronic sports leagues, where players compete in front of audiences.