Global Esports Market Is Estimated To Witness High Growth Owing To Rising Prize Pools And Growing Smartphone Penetration
The global esports market is estimated to be valued at US$ 2.88 Bn in 2024, exhibiting a CAGR of 21% over the forecast period (2024-2031). Esports has seen tremendous growth over the past few years driven by the rising popularity of video games and streaming platforms. Furthermore, higher prize pools for popular esports titles are incentivizing more gamers to participate professionally.
Market Dynamics:
The global esports market is expected to be driven by two key factors over the forecast period. Firstly, rising smartphone penetration across developing countries is providing greater access to esports. Major brands recognize Esports' large audience of Millennials and Gen Z and are eager to partner with tournament organizers. Emerging business models around media rights, advertising, sponsorships, and merchandise are expanding monetization opportunities in the global esports market. With continued innovations and platform proliferation, esports popularity and revenues are poised for strong growth globally in the coming years.
Growing popularity of video games and number of esports viewers
One of the primary drivers for the growth of the global esports market is the rising popularity of video games and number of esports viewers worldwide. Video gaming has transformed from a niche hobby to a mainstream form of entertainment over the past decade. Young people in particular spend a significant amount of time playing and watching video games online. Esports tournaments featuring popular games like League of Legends, Dota 2 and Counter-Strike now routinely draw millions of online viewers. This growing fanbase and viewership is attracting more brand sponsorships and investments into the sector.
Increasing prize money and revenue opportunities in esports
Another key market driver is the large prize money on offer at top esports events which is encouraging more professionalization of competitive video gaming. Major tournament winners can take home millions of dollars in prize money each year. This is making esports a lucrative career option for skilled gamers. It is also providing revenue streams for team organizations, broadcasters and other stakeholders. Higher salaries and career opportunities in esports organizations are motivating more people to take up competitive video gaming full-time. This is expanding the talent pool and competitive infrastructure in the industry.
Piracy and lack of regulations inhibit monetization
One major restraint on the esports industry is the prevalence of piracy which makes it difficult for rights holders to effectively monetize their content and events. Unauthorized streaming of esports tournaments cuts into official viewership figures and sponsorship revenues. Issues around copyright enforcement online pose ongoing challenges. Another restraint is the lack of standardized regulations around areas like player contracts, rights, dispute resolution and revenue-sharing models between stakeholders. This regulatory ambiguity increases investment risk and deters sponsor/partner participation.
COVID-19 pandemic cancellations and restrictions
The COVID-19 pandemic has also acted as a near-term restraint by forcing the cancellation or transition of major live esports events to online-only formats in 2020-21. While digital viewership grew, the loss of in-person ticket/merchandise revenues and live event sponsor activations hurt business models. Ongoing mass gatherings restrictions or concerns about future variants could continue hindering a return to pre-pandemic scale of live international Local Area Network (LAN) tournaments and leagues. This threatens the longer-term growth outlook of the sector.
Growing integration with traditional sports and entertainment
A major opportunity for the esports industry lies in further converging with traditional sports and entertainment industries. Traditional sports league owners and media companies have started acquiring esports assets to tap into younger audiences. Partnerships between esports and traditional franchises are helping to increase the credibility and popularity of competitive gaming as a spectator sport. Deepening these crossover synergies could supercharge esports popularity and business potential on a global scale.
Increasing brand sponsorships and monetization potential
With a rising fanbase of dedicated esports viewers and the integration with traditional sports, brands are showing strong interest in esports sponsorships. But the industry has only scratched the surface of its potential for monetization through corporate partnerships, media rights, merchandise, etc. Improving technologies to better measure, track, and profile the esports audience also creates opportunities for data-driven advertising and campaigns. If monetization catches up with viewership growth, esports revenues could skyrocket in the coming years.
In conclusion, while piracy and regulatory issues pose challenges, the growing popularity of esports driven by technology and younger demographics presents a major global market opportunity. Deeper integration with traditional sports and improvements in rights protection and monetization models can help esports realize its full business potential.
Link - https://www.coherentmarketinsights.com/market-insight/esports-market-4191
Key Developments:
- In April 2022, Nodwin Gaming, a games and esports company, joined forces with Gameloft, a game developer, to host esports events in India centered around the popular Asphalt Racing Intellectual Property (IP)
- In April 2022, the Korean Esports Association (KeSPA) signed a three-year sponsorship deal with SK Telecom. This agreement established SK Telecom as an official sponsor of KeSPA and will provide support for the training of the Korean esports team in preparation for upcoming Asian games.
- In March 2022, Rooter Sports Technologies Private Limited secured the media rights for all intellectual properties (IPs) owned by Sky Esports, the leading esports tournament organizer in South Asia. This one-year agreement grants Rooter Sports the ability to stream Sky Esports' competitions across India in multiple languages, including English, Hindi, Bengali, Kannada, Tamil, Malayalam, and Telugu. This acquisition will help expand the reach and accessibility of esports content in the region.
- In March 2022, the Esports Federation of India (ESFI) will host the National Esports Championships 2022 (NESC2022) as part of the "AESF Road to Asian Games" initiative. The primary objective of this event is to choose the Indian team that will represent the country in the upcoming Asian Games.
Key Players:
Activision Blizzard Inc., Amazon.com Inc., Alphabet Inc., Capcom Co Ltd, Electronic Arts Inc., Envy Gaming LLC, Epic Games Inc., Esports Entertainment Group Inc, Gfinity Plc, Gameloft SE, HTC Corp, Intel Corp, Meta Platforms Inc, Modern Times Group MTG AB, and NVIDIA Corp
