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E-Sports – A Billion Dollar Gaming Industry!
Where Investment Might Be ‘The Next Big Fad’

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With almost every sector taking their businesses online, a recent industry to step into this virtual world is the gaming industry. The perception of sports as mere physical activities is soon becoming a thing of the past as people are now moving on to the latest trend – playing sports online!

 

The online gaming system provides the facility of playing sports on any screen with the convenience of sitting at your own home. These electronic sports or e-sports give the players, an opportunity to dive into a world with endless virtual realities. They are designed in such a way that the players feel as if they are actually inside the game.

The concept of e-sports isn’t new. It was introduced in the 70s when various colleges began organizing video game battles for fun and awarding attractive prizes to the winners. This eventually led to the formation of this billion dollar industry.

Some most commonly played e-sports include League of Legends, Counter Strike, Dota, StarCraft, Fortnite, Call of Duty and others, among which, the League of Legends was reported to have the highest viewership around the world with 512.2 million views, closely followed by Fortnite at 464.8 million viewers in the first six months of 2019.

 

What Exactly Are E-Sports?

E-sports are online video games which give the players an option of playing multiplayer games or single player games. These e-sports can be First Person Shooter (FPS) games, Real Time Strategy (RTS) games or battle arena games. They are also classified into MMO and MOBA gaming. MMO gaming stands for Massively Multiplayer Online gaming, which include games involving a large number of players in a single game, such as, War of Worlds, whereas, MOBA gaming stands for Multiplayer Online Battle Arena, which involves the players battling each other in the game, for instance, Dota 2.

 

Playing any e-sport mainly requires a gaming console, a screen and a lot of free time. The gaming console and its individual parts have a huge market around the world. According to our research, the global gamer keyboards market is anticipated to reach USD 2371.8 million by 2022, and is projected to witness a CAGR of 18.7% during the period 2017-2022. Live tournaments and professionally organized video game competitions for these sports are held everywhere around the world, thus generating revenues from the ticket prices and large masses of audience. The sponsorship and advertising of these tournaments creates an even larger source of revenue for the companies.

 

Inclination Towards E-Sports Industry

The growing viewership and fan base for online sports, on a worldwide level has drawn the interest among huge brands and market leaders. According to them, this segment of the entertainment industry is estimated to have great potential to generate high revenues. Huge investments from leading brands in the e-sports market is promoting the growth of this industry at a rapid rate.

The viewership of this industry, comprising of mostly teenagers and young adults, is continuously increasing.  With revenue generated of around USD 500 Million in 2016, the E-Sports market is predicted to cross USD 1.35 Billion by the end of 2020.

Due to their increasing popularity, e-sports are turning into a spectator sport with people watching, highly skilled video gamers compete in virtual sports, such as, League of Legends, Counter Strike, Dota, StarCraft, Fortnite, Call of Duty etc. on huge screens.

The e-gaming industry is growing globally, not just among the teenagers but investors are also beginning to show their interest in this industry which is generating millions of dollars.

 

The Growing Fan Base & Large Pool of Prize Money

During 2018, the global audience for eSports crossed 350 million during 2018. Including both e-sports enthusiasts and occasional viewers, this number is estimated to reach 630 million by the end of 2022.

 

The growing recognition of the gaming industry is bringing in a lot of money in the form of prizes for the players. In 2018, Dota 2 had the highest prize pool of for the winners, thereby inviting more gamers into this industry. The increasing amount of prize money coupled with popularity of these electronic sports is attracting a fairly large number of skilled gamers who wish to make this a full time career.

 

One of the most popular online games, the ‘League of Legends’ has the highest player base and audience for the championships. With player base of around 65 million in 2015, the LOL (League of Legends) World Championships granted around USD 4.5 Million as award money during 2017.

 

e-Sports Betting

Gambling on the video game competitions is one of the major factors resulting in inflow of money in this industry. But complications surrounding online gambling and eSports betting has led to varied laws that keep on changing on frequent basis. Since the beginning of e-Sports, there has been a huge record of match fixing incidences, which resulted in lack of trust and huge frustration among the gamers.

 

On the other hand, the growing popularity of this industry along with rising number of influential celebrities and athletes who are investing heavily in eSports is contributing significantly towards the growth of the eSports industry. Moreover, it is also increasing the number of people involved in betting which has raised legal concerns. Where many initiatives are being taken to control such issues, there are many countries that might legalize sports wagering in near future.

 

Amazon Taking Over Twitch

One of the leading platform of video gaming, Twitch Interactive Inc., was acquired by Amazon.com Inc. (NASDAQ:AMZN) for approximately USD 970 million in cash during 2014 so as to provide better gaming services to their customers. With more than 3.3 Million active broadcasters and 14 million active users on daily basis, Twitch is one of the most popular platform in gaming industry for live video streaming that is fulfilling the dreams of many streamers by providing them numerous income channels through subscriptions, advertising & marketing and sponsorships among others.

 

In an attempt to compete with Twitch, YouTube launched its own gaming app by the name of YouTube Gaming in 2015. The app is similar to the regular YouTube app, however, it consists of only gaming videos which are uploaded by the professional players on YouTube.

 

The gaming app, designed by Google, is a platform for players from across the world to showcase their gaming skills and reach a wider audience. It gives a boost to the e-sports industry by increasing awareness and piquing interest of people belonging to different nationalities and age groups in the online gaming industry.

 

With emerging e-sport companies, which specifically deal in buying and selling teams and players of various games in order to compete at various gaming platforms such as Twitch and YouTube, a robust growth has been observed in e-Sports industry. These companies employ the best players and teams to generate revenue by winning prizes worth huge amounts of money.

 

Cloud9 is one of the largest companies dealing in e-Sports in terms of its market value, followed by Team SoloMid and Team Liquid among several others. The top nine companies of the e-sports industry are worth more than USD 100 million. Apart from the big companies, even startups related to e-sports are being encouraged and are easily given a venture capital funding of up to USD 50,000, an amount which is bound to increase with the expansion of this industry.

 

How can Research Nester help you?

Research Nester is a market research company providing data on various markets and industries. We conduct a detailed research based on the requirements of the client and ensure the formation of a proper strategy for the business. Our in-depth analysis of the e-sports market allows an easy understanding of the future prospects of the industry and presents various opportunities for anyone interested in investing or starting a business in this industry.

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