Need to Know: eSports is Poised to be a Billion Dollar Industry

The eSports market is growing at an unsubstantiated rate, set to be an industry valued at more than a billion dollars in the next three years (in 2016, eSports was valued by Goldman Sachs at $500 million, and the market is expected to grow by 22% annually).

There has been a recent boom in commercial opportunities in the eSports industry, from merchandise to sponsorships to acquisitions of teams and leagues by networks, other gaming leagues, and team owners. This includes the new phenomena of having eSports matches being broadcast to sports networks, namely ESPN. The first night of the Overwatch grand finals was the first esports competition to be broadcast live on primetime television on July 27.

This is not the first eSports tournament to ever be played on an ESPN network, but this new broadcasting agreement does show a turn in the eSports world to a commitment for regular broadcasting eSPorts coverage on TV and digital platforms.

With the growth of streaming services like Twitch and the lucrative careers it has offered some of it’s more well-known streamers, like Ninja, Dr. DisRespect, Shroud, and others, eSports and video game viewership have been hotly discussed topics in the sports and entertainment world.

There is certainly a market for these streaming services, and if the primetime pickup of esports tournaments continues to grow, there may just be a space for those streamers that are not necessarily playing in tournaments.

The advertising and sponsorship community should be prepared for this, as the chances for these events to become as big as the Super Bowl may be just around the corner. Only time will tell if this will stay a consistent market, but we should all be ready to see a huge mainstream boom in the understanding of the potential that eSports have as a cultural staple and an economic opportunity.  

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The eSports Revolution

eSports are taking the world by storm, and it’s great for gamers, fans and marketers. But what are eSports and why do we need to be paying attention to the growth of this emerging market?

What are eSports?

eSports refers to competitive videogame play. There are tournaments, live streams, big name players with sponsorships, teams and crowds of fans. Everything you would expect from a “real” or “normal” sport, with major differences in not only just activity level, but the fact that multiple games are played during the tournament. For instance: you don’t see a baseball game being played at the World Cup, but you may see players on League of Legends and on Call of Duty during the same eSports tournament.

The growth of eSports

Compared to most major sports, eSports are still in their infancy; but the rate of growth is so rapid that eSports will likely be able to catch up to major league basketball, baseball and football within the next few years. A big issue that eSports faces is making sure that the audience has a full understanding of what is happening on the screen. The changes of individual games and tactics is much faster than changing of decades, sometimes centuries old rules of other sports.

But this isn’t dissuading colleges and universities from moving into the future; in fact, the University of Utah recently announced that the school will sponsor a varsity eSports program, complete with scholarships. And the University of California, Irvine, opened an “eSports arena” that includes gaming computers and webcasting services.

eSports are currently poised to become a hugely influential financial market as well, in 2016, Goldman Sachs valued them at $500 million, growing into a $1 billion industry over the next 3 years. Even eSports platforms are benefitting. Twitch, an eSports streaming community was purchased by Amazon in 2014 for $970 million, and top gamers earning over $300,000 last year.

Marketing and eSports

Twitch streams were watched by over 2 million people in 2015, and the number has continued to grow, which makes this huge audience very appealing to marketers. However, marketing in this space is different than many other markets. Gamers want to see brands that do work to “benefit the space and not just the brand”, says Nathan Lindberg of Twitch. Brands that are loyal will receive loyalty in return. The majority of eSports advertising will also need to be digitally focused, as eSports haven’t majorly broken into TV yet. Marketing that feels natural and organic will do the best. See what eSports sponsor Coca-Cola has done for some excellent examples.

Get Involved With eSports

Want to see the eSports phenomenon for yourself? Check out Twitch, YouTube, and the all new FantasEsports to stream or play in a tournament.

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