Esports is simply the short name for Electronic Sports. 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. Brands, seeing the potential of reaching a large and engaged audience, are investing in eSports marketing both directly and indirectly. That’s what has mainly contributed to the rapid revenue growth in the industry.
How eSports change the game from media laughing stocks to media craze. In 1985, Billy Mitchell was listed in the Guinness books of record for holding the highest scores in 6 arcade games including Pacman and Donkey Kong. In 1997, Dennis “Tresh” Fong came victory at the Red Annihilation Quake Tournament where he placed first and won ID Software CEO’s John D. Carmack’s Ferrari 328. Fong is therefore recognized by the Guinness World Records as the first profession gamer. In 2006, MLG Pro Circuit took a shot at TV, broadcasting the Halo on the USA network. Despite that, it didn’t catch on. 2011.
Justin.tv launched Twitch TV and everything took a shift. Twitch would become the popular streaming network in the world. Esports viewership numbers as the League World Championship would explode from 1.7 million viewers to 8.2 million viewers in 2012 and 32 million in 2013. It was Halo, Call of Duty, CS Go, League of Legends and Dota 2 that brought Esports to its full potential. In Aug 2013, Riot Games sold out the Staples Centre in 1 hour hosting the League of Legends tournament.
THE FUTURE OF ESPORTS
In 2018, the year-over-year growth rate had slightly dropped at 13.8% although that’s still a sizeable increase. In 2018, there were 215 million occasional viewers and 165 million enthusiasts. the total audience size grew to 380 million. By 2021, Newzoo predicts that the annual growth rate will be approximately 14%. They also predict that the number of casual viewers will grow to 307 million. And that there will be 250 million eSports enthusiasts, making the total audience 557 million.
These numbers continued to increase in the following years, by a few hundred thousand annually. By 2017, eSports awareness had risen to 1.28 billion, and it reached 1.43 billion by 2018. In 2019, an estimated 1.57 billion people are likely to learn about it. This means that viewership will likely increase as well and with that, the industry will further see revenue growth.
According to the previously cited Newzoo analysis, there has been an average revenue increase of more than 30% annually. And a large portion of it resulted from brand contributions. In 2016, the total eSports revenue was $493 million, out of which $350 million came from brand investments. This increased by 33% year over year in 2017, where the total revenue was $655 million, and brand investments contributed to $468 million of this.
In 2018, the average year-on-year increase in total revenue was at an impressive 38.2%. The eSports industry made a total of $906 million in revenue. Out of this, $694 million came from brand investments – both direct and indirect. That’s a 48% increase in brand investment from the previous year. Newzoo predicts that by 2021, eSports will generate more than $1.6 billion in total revenue with $1.3 billion coming from brand investments.
OLYMPIC GAMES RECOGNITION
The Olympic Games are also seen as a potential method to legitimize esports. A summit held by the International Olympic Committee (IOC) in October 2017 acknowledged the growing popularity of esports, concluding that "Competitive 'esports' could be considered as a sporting activity, and the players involved prepare and train with an intensity which may be comparable to athletes in traditional sports" but would require any games used for the Olympics fitting "with the rules and regulations of the Olympic movement". Another article by Andy Stout suggests that 106 million people viewed the 2017 Worlds Esports competition. International Olympic Committee (IOC) president Thomas Bach has noted that the IOC is troubled by violent games and the lack of a global sanctioning body for esports. Bach acknowledged that many Olympic sports bore out from actual violent combat but stated that "sport is the civilized expression about this. If you have e-games where it’s about killing somebody, this cannot be brought into line with our Olympic values." Due to that, it was suggested that the IOC would approve more of esports centered around games that simulate real sports, such as the NBA 2K or FIFA series.