eSports. History and Future. What are the Benefits of eSports? eSports and Perspectives of its Development in the Nearest Future. Where does it come from and why this field has become so attractive to investors?
Surely, everybody knows about video games. But not everyone has realized that eSports are one of the fastest growing markets, which is very attractive for international investors.
To begin with, eSports (electronic sports) is when professional video game players compete against each other. eSports competitions are usually big and crowded events. Just like in regular sports, there are eSports fans, who watch games of their favorite teams and live streams online. Similar to football fans, there are followers and supporters of esports athletes and teams.
Table of Contents
The principal difference between eSports and ordinary Sports
The most significant difference is that eSports tournaments are played with the help of PCs and consoles. Type, capacity, technical characteristics of devices and wi-fi speed define the set of games that can be played on it.
Genres of eSports games include First Person Shooter Games (FPSG) such as Counter-Strike, Multiplayer Online Battle Arena (MOBA) – Dota2, League of Legends, Strategy Games – Starcraft, Fighting games, Sports games, Racing games. The latest genre of eSports is Survivor games like Fortnite Battle Royale, Player Unknown’s Battlegrounds.
Origins of eSports
eSports have developed out of school and college competitions in video games. With the development of technical facilities and the availability of high-speed Internet, it has become possible to have interpersonal competition in video games. Compared to decades back, the price of PCs and consoles has also dropped down. Availability of online games that can be played free of charge and technical possibilities of streaming online games have created a perfect background for having fan clubs of those who like watching video games or those who want to learn to play better. Due to cultural peculiarities, eSports are especially popular in Asian countries, such as Japan and South Korea. The first eSports Association has been created almost 20 years back. Currently, the eSports community fights for being recognized equal to ordinary sports, but quick progress is being made fast, and large sums of funding are being raised.
Further development of eSports
The launch of the Twitch platform in 2011 was a breakthrough for the eSports community, as this platform gave an opportunity for individual gamers to stream their games online, creating private fan clubs. Players had a chance to communicate with their fans using chat options. Few years after the launch of Twitch, YouTube Gaming has entered the market.
The average age of gamers who play the most popular e-games varies from 21 to 29 years, however with time the young generation of today is the generation of tomorrow resulting in eSports going mainstream.
The number of eSports fans has grown by 15% in 2018, the revenues have increased by 38%, and in 3 more years, in 2021, total eSports revenues will reach $1.65 bln. 38% of the market is taken by North American companies and 18% – by China. The most popular games are League of Legends, Overwatch, Fortnite, Counter-Strike, DOTA and some other. The most valuable eSports companies are Cloud9 ($310 mln.), TeamSoloMid ($250 mln.), and Team Liquid ($200 mln.).
Prizes awarded for eSports tournaments are beating the records every year.
The latest statistics show that there are around 200 million people who watch eSports regularly, which makes electronic video gaming more popular than many conventional types of sports.
The amount of gamers involved in eSports is expected to increase by 15% each year.
There are hundreds of eSports events that happen each year, getting multimillion revenues in ticket sales.
eSports competitions have large money prizes, some of which have already broken the record of $100 mln, which makes these competitions a lot more attractive than Football tournaments.
Twitch platform is now having more viewers than some of the most popular TV channels.
eSports are a subject of consideration of the Olympic Committee, which will probably assign it a status of demonstration Olympic sport in the nearest future.
Colleges and Universities already practice assigning athletic scholarships to gamers.
eSports is expected to become a multi-billion industry in the short-term.
How to monetize eSports
Even though eSports is developing very fast, it is still a very young sport, which cannot compete with traditional types of games with its sponsorship revenues. Also, the age of fans is very selective. Thus, it will take a decade or more before sponsorship monetization reaches the level of favorite sports. The concept of eSports is also not based on local fan clubs as in conventional sports, which makes it unattractive for the local sponsors.
Structure of eSports Revenues
eSports events are an exciting field for media and telecom companies, as well as worldwide technology manufacturers.
Since the industry is growing very fast, significant changes are to be expected very soon. We predict salaries and contracts for gamers, scholarships, supervision and college degrees in topics related to eSports.
What are the main benefits of the rapid development of eSports?
eSports is a highly technological space, and its development lays on the intersection of technological progress in the areas of technology, communication, graphic design, and other spheres. So who will benefit most from the development of eSports?
British Broadcasting Corporation reports that eSports will be able to generate more than $1 bln. in global revenues, at the same time doubling its audience in the nearest two years. Economic benefits of eSports are due to job creation, tourism, building infrastructures, and strengthening international relations.
Video games are loved by people of all ages and social backgrounds; thus, e-sports can strengthen cultural and national bonds through communication between the players from different parts of the world.
Science, Technology, and Communication
eSports stimulated faster development of technologies. eSports creates a prominent and highly competitive market for computer technology manufacturers, internet providers, media companies and game developers.
Investing in eSports
eSports is probably one of the most lucrative investment opportunities of the decade. The pace of eSports development reminds the boom of popularity of the social media a short while back. Since eSports is the most technologically driven sports on the planet, it makes a great digital media and entertainment opportunity for investment.
Upcoming Trends in eSports
Although the market is undoubtedly lucrative, the investment opportunities remain very complicated for an ordinary investor. Among the other, it makes sense to pay attention to the following upcoming trends:
Franchising model for the most popular eSports games;
Broadcasting and media rights;
Development of Virtual Reality industry;
Massive and rapidly growing audience background proves that the economy of eSports is nowhere near its peak at the moment and that this industry will generate significant returns in the upcoming years.