Video games currently represent the largest sector in entertainment, with global revenue reaching $192.7 billion in 2021. Last year, we shared about the growing connection between gaming and entertainment on our blog here. Now in 2023, consumer behavior, especially that of younger generations, the pull toward video game content is even stronger, according to Deloitte’s 17th Digital Media Trends Survey.
Esports is a section of this industry that has gained immense popularity in a short time. With natural crossover between this and other sectors of entertainment, esports gaming and events have thrived, thanks in no small part to existing infrastructure and talent. Here is everything you need to know about esports.
What are esports?
Esports is a highly organized competitive environment that revolves around video games, ranging from team-oriented multiplayer online battle arenas (MOBAs) to single-player first-person shooters, battle royales, and virtual reconstructions of physical sports. Esports are played in tournaments that come in various forms, from large-scale events with set players and thousands in the audience to community-based gatherings where participants bring their own devices. Just like traditional live sports, different types of esports games require specific venue requirements, ensuring the optimal playing environment.
How do esports differ from traditional sporting events?
Esports is a global phenomenon, with servers grouping players from different regions. Countries around the world have invested in esports community building, establishing associations and recognizing esports as an official sport. Accessibility is crucial for reaching international locations, both in terms of language and technological infrastructure. Mobile games like Free Fire have become popular in Latin America due to their availability on mobile platforms.
The entertainment industry has played a significant role in laying the groundwork for esports, offering tax incentives for production, private investments, and workforce development. Film and TV infrastructure have provided valuable lessons to budding esports communities, so much so that cities with a strong production background, like Atlanta, Georgia, have quickly welcomed these new media events. You can read more about the connection between esports and entertainment, as well as what is needed to build a successful esports event, in our Esports Business Summit panel recap here.
What does the esports market look like?
The esports market has experienced tremendous growth, with a global market value of $1.45 billion in 2022, projected to reach $1.72 billion in 2023. By 2030, the market is expected to reach a value of $6.75 billion, reflecting a compound annual growth rate of 21.5 percent. These numbers indicate the increasing popularity and potential of esports as an entertainment medium.
Sponsorships and media rights also play a significant role in generating revenue in the esports industry. In 2022, sponsorships were projected to generate over $837 million, while media rights were expected to contribute $207.8 million. China holds the largest share of the esports market revenue, generating an estimated $360.1 million in 2021, followed by the United States with $243 million. These figures highlight the global impact and financial potential of esports.
What does engagement look like in esports?
Esports tournaments attract a substantial viewership, with an increasing number of people tuning in to watch competitive gameplay. According to Stream Hatchet, esports viewership has risen by 40% compared to the previous year, reaching 673 million hours watched in Q3 2022. The popularity of esports is evident in streaming platforms like Twitch, where games like League of Legends have reached peak viewership of 3.11 million.
Esports has also become a platform for brands to engage with their audience and tell their stories. Big-name brands such as Gucci, BMW, and Coca-Cola have partnered with esports through sponsorships and creator collaborations, recognizing the opportunities within this space. Gucci's Gamer Academy supports emerging players, showcasing the fashion industry's presence in gaming. Coca-Cola has become the first worldwide founding partner of Wild Rift, a popular mobile title from Riot Games. While BMW had previously invested heavily in esports, they have scaled back their sponsorships in 2023.
What sets esports apart from traditional entertainment mediums?
As an enterprise, esports is immersive. It’s also flexible in nature. Virtual environments provide experiences that cannot be replicated in the real world. Esports brings a live social component, fostering a sense of community similar to that of a movie theater or theme park. Livestream setups, with close-ups of players and their engaging interactions, allow audiences to feel connected to the game.
Community. It’s the word at the core of esports, playing a vital role in the success of events. The direct connection between players and viewers, often facilitated through chat functions, creates an authentic and engaging experience. Platforms like Fandom help foster this community by allowing individuals with niche interests to connect and share their passion for esports.
What’s next?
In the future, it is believed that esports will continue to capitalize on its ability to foster community through hosting more community events (both in-person and in the metaverse), speaking to more niche audiences, and creating talent pipelines that advance diversity. In addition, esports might make more appearances in primetime. Streamers are investing in gaming content as well as playing in the world of live broadcast sports rights, so it is not hard to believe esports might be next. Esports can already be seen on streamer Netflix with the show Arcane, an animated series based in the fictional world of the most popular esports title, League of Legends. The first season of the show was embraced by the passionate community of the game and has already secured a second season. In addition, esports might be on a silver screen near you. As of 2022, the movie theater chain Cinemark has its very own esports league. Where else will the format go from here? The game is on and there’s an open field ahead.