ESPORTS MARKET ANALYSIS

Market Overview

Esports also styled as e-sports are a type of video game sports competition. Competitors from different teams participate in the same game. There are number of popular games, for which different teams face off such as Fortnite, Counter-Strike, League of Legends, Call of Duty, and others. Esports has gained significant popularity over the years, typically due to the rapid growth of the PC gaming sector. Live streaming of gaming is another that has led to a massive rise in the popularity of esports.

The global esports market is expected grow at a CAGR of 20.3% expected reach to US$ 3.73 billion by 2027.

Market Dynamics- Drivers

1. Rising popularity of video games is expected to drive growth of the global esports market during the forecast period

Video games have gained massive popularity over the years, especially due to the advent of novel products from video game console developers including Microsoft, Sony Interactive Entertainment, Nintendo, etc. Video gaming sector is changing rapidly from being a casual hobby to pass time to professional career opportunities. In fact, esports has gained similar traction and fixation to conventional sports. Massive esports tournaments are being organized across the globe with lucrative sponsors and significant investments from international brands. Furthermore, many celebrities endorse such tournaments with live streaming being the major source of viewing. As a result of this, the demand for esports and relevant products is increasing rapidly. Therefore, these factors are expected to drive growth of the global esports market during the forecast period.

2. Academic courses from universities for gaming is expected to propel the global esports market growth over the forecast period

Although gaming was considered a casual hobby in the past, over the years it has grown into a professional career option for many aspiring gamers. Many universities and colleges have started enrolment for professional gaming courses or esports degrees. For instance, in the U.S., over 100 high schools have started esports programs with conventional sports such as soccer and hockey. In fact, Becker College in Massachusetts, Ohio State University, and Shenandoah University, Virginal have started esports degree courses in their respective curriculum. Furthermore, many institutions offer scholarship for aspiring gamers, which is expected to boost esports popularity. Therefore, these factors are expected to propel the global esports market growth over the forecast period.

Statistics:

North America held dominant position in the global esports market in 2019, accounting for 34.6% share in terms of value, followed by Europe and Asia Pacific respectively

Figure 1: Global eSports Market Share (%) in terms of Value, By Region, 2019

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eSports Market - Impact of Coronavirus (Covid-19) Pandemic

The Covid-19 has a positive impact on global esport market. With large number of people staying indoors, sports fanatics across the globe have taken to video gaming in the age of the pandemic.As many countries imposed the lockdown during the pandemic, many esport competition organisers seized the opportunities and organized the sporting events. Moreover, the traditional over the board/offpremise sports such Chess was held online. For instance, in August 2020, Chess Olympiad which is one of the major over the board chess tournament was conducted online due to the pandemic. Also, the online game streaming COVID-19 is expected to propel the market growth during the year 2020. 

Market Dynamics- Restraints

1. Lack of standardization is expected to hamper the global esports market growth over the forecast period

Currently, there is no governing authority over esports and thus, it lacks standardization. Esports is relatively a new industry with a lot of participants complain that some tournaments lack authenticity, making it difficult to find whether a tournament is real or full of scams. Furthermore, there is lack of standardization for market players in terms of sponsorship, advertising, and contracts. Salaries of players remain significantly inadequate for novel players even though there is necessary involvement. There are constant issues regarding poor contracts between teams and brands. Therefore, these factors are expected to hamper the global esports market growth over the forecast period.

2. Limited tournament infrastructure and fewer organizations are expected to restrain growth of the global esports market during the forecast period

Currently, there is limited tournament infrastructure available with fewer organizations operating in the market. Such limitations have led to restricted revenue streams for team owners and players. Such factors are expected to restrain growth of the global esports market during the forecast period.

Market Opportunities

1. Rising investment in the gaming industry can present lucrative growth opportunities in the global esports market

Esports has witnessed significant investment in the recent past, providing a diverse range of opportunities for subsectors. Many esports companies have raised investments via traditional venture capital activities. For instance, in May 2020, BLAS, a Denmark-based tournament organizer secured funding of US$ 17.4 million, led by Rocket Software and Vækstfonden, a Danish investment fund firm. Such robust investment has led to increased opportunities for aspiring market players.

2. Increasing number of events with large prize pools can provide major business opportunities in the global esports market

Esports tournaments have started gaining more and more popularity among people, especially in emerging economies such as India and China. For instance, prize money for DOTA 2 tournament in 2020 was US$ 6 million, making it the highest-paid game in esports market. Furthermore, in 2020, CS:GO had prize money of US$ 4.9 million, making it the most active game in 2020. Such high prize money pools have increased the popularity of esports across the globe.

Figure 2: Global eSports Market Value (US$ Bn), 2017 - 2027

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The global esports market is expected to reach a value of US$ 3.73 Bn by 2027 at a CAGR of 20.3% between 2020 and 2027.

Market Trends

Rising popularity of mobile gaming is an emerging trend in the market

Mobile gaming has provided a massive opportunity for esports market players, especially in emerging economies such as India, China, Vietnam, and Indonesia. Mobile games such as PUBG and Garena Free Fire have gained significant popularity in the aforementioned countries. According to Sensor Tower data, in 2020, Garena Free Fire collected over US$ 300 million, while PUBG collected over US$ 3 billion in revenue with India securing top place in the download chart.

Competitive Section

Key companies operating in the global esports market are Activision Blizzard, Inc., NVIDIA Corporation, Valve Corporation, Nintendo of America Inc., Riot Games, Inc., Epic Games, Inc., Tencent Holding Limited, Gameloft SE, Turner Broadcasting System, CJ Corporation and Electronic Arts Inc.

Key Developments

1. Major companies are focused on partnerships and collaborations, in order to gain a competitive edge in the market. For instance, in January 2020, Activision Blizzard, Inc. entered into a multi-year strategic partnership with Google Inc. to power new player experiences.
2. Major players are focused on product launches, in order to enhance the product portfolio. For instance, in January 2020, NVIDIA Corporation launched a new G-SYNC esports display.