Esports Market

Market Overview

The global esports market size was worth USD 1,178 million in 2021. It is expected to reach USD 5,743 million by 2030, growing at a CAGR of 21.9% during the forecast period (2022–2030).

Millions of people worldwide are increasingly interested in competitive video gaming, which offers billions of dollars in prize money. Streaming services and live events have transformed casual gamers into bona fide celebrities who can earn seven-figure salaries and garner enormous corporate endorsements. Esports, often known as electronic sports, are a form of competition played via video games.

The term "Esports" refers to the organized, competitive video game industry. In popular online games like Fortnite, League of Legends, Counter-Strike, Call of Duty, Overwatch, and Madden NFL, players from various leagues or teams compete against one another. A survey from a market analytics company claimed that 380 million people watched esports in 2018, including 165 million esports enthusiasts. Most of these fans were from South Korea, China, and North America. Online gaming is now a spectator sport due to esports. It is equivalent to viewing a professional sporting event, but viewers see video gamers battle against one another instead of physical competition.

In recent years, the esports phenomenon has developed such that viewers can commonly watch games at a planned arena event. In terms of audience and income, the esports sector has experienced a tremendous expansion in recent years. The increased sponsorship income received by tournament/championship organizers was primarily caused by the rising audience. Streaming companies indirectly and directly invest in esports marketing because they recognize the potential for reaching a large and engaged audience. This aspect aided in the development of exclusivity in the sector. Even the International Olympic Committee considered including esports in upcoming Olympic competitions. Platforms for broadcasting video online, like DouYu, YouTube, Twitch, and Huya, have emerged as critical players in the growth and promotion of esports events.

Market Dynamics

Global Esports Market Drivers

Growing Popularity and Rising Awareness of Esports to Augment Market Growth Prospect

Due to the advent of live game streaming and numerous open-source intercepting and broadcasting tools, the amount of time spent watching game-related video content has dramatically increased. This is especially true for games that encourage creative competition and produce distinctive gameplay instances actively shared and watched by millions of people. Until recently, Asian nations had seen the most significant growth in the popularity of esports. At the moment, the trend is accelerating more quickly in North America and Europe. Verizon statistics from the beginning of 2020 showed that since Americans started taking refuge indoors, everyday video game traffic more than doubled. Compared to videos and web browsing, video game traffic climbed higher. Later that same year, according to data from Verizon, its gaming traffic grew weekly.

Additionally, prize pools for competitions in games like Fortnite and Dota, two well-known online games, have formerly totaled more than USD 35 million. More players are becoming interested in competitive video gaming due to these attractive payouts, and the number of viewers on streaming sites is growing. This growing popularity among people pushes the expansion of the market.

Another significant aspect boosting the success of the esports market is the rising awareness of esports, primarily due to the increase in mobile internet usage and the number of launched campaigns. By 2025, there are estimated to be 5 billion mobile internet users, with a penetration rate of 61% predicted by GSMA Intelligence. Furthermore, the beginning of numerous esports promotion initiatives is positively affecting industry expansion. For instance, Hanwa Life Esports, an esports team with a base in Korea, started a public awareness campaign called the Beautiful Game in April 2018 to promote esports. Through various online and offline activities, the campaign hopes to alter people's perceptions of the market as it expands.

Global Esports Market Restraints

Safety Issues and Frauds Relating to Gaming Transactions to Hinder Market Growth

Challenges, including data privacy laws and regulations, represent a threat to the eSports sector. The esports business must manage an intricate and frequently conflicting patchwork of data privacy and security laws. The esports sector may face particular compliance difficulties due to this environment, particularly regarding youngsters. Additionally, non-compliance can have significant adverse financial and reputational effects. US laws like the Children's Online Privacy Protection Act and the Federal Trade Commission Act impact how eSports organizations collect, use, and trade data.

According to COPPA, website and online service providers must adhere to specified rules if they target their platform to youngsters under 13 or have fundamental knowledge that they gather personal information from children under 13. Scammers have also begun running YouTube advertisements under the names of influential esports organizations. These tricks typically invite viewers to visit a third-party webpage in exchange for free in-game skins. Such practices affect the market adversely.

The market potential for suppliers of electronic sports platforms is anticipated to increase due to the robust sports markets across European nations. New gaming platforms have sparked an interest among many fans. Similarly, numerous stakeholders are making sizable investments in this European industry due to the market's promisingly expanding audience and higher expected return on investment.

Sports-loving people are widespread in South America, so business expansion chances are anticipated to soar. Several corporations and sports organizations are investing in South American nations due to the region's significant growth potential. Businesses like Cooler Master and Logitech have partnered with the To grow the sports business and provide people with pleasure, the governments of the Middle East and Africa are investing in sports. For example, the Saudi Arabian government promised to invest USD 3.3 billion in gaming. As a result, it is anticipated that the expanding gaming sector will increase the market's potential for electronic sports throughout the Middle East and Africa. Similarly, the pandemic has increased demand for the in-house entertainment provided by these platforms. As more investors entered the market, the potential expansion of these platforms in the MEA increased dramatically.

Gamers may suffer from psychological issues related to gambling addiction, social behavior disorders, and metabolic ailments brought on by light-emitting diode computer monitors. Injuries to the back, neck and upper extremities are more likely to occur in electronic sports players, according to a recent study by Zwiebel et al. on the health impacts of these athletes. In addition, metabolic issues might result from spending too much time in front of a computer screen. These players' typical sedentary lifestyles and bad posture bring most of these problems. Another issue is the emergence of college scholarships for electronic sports, which allows kids to rationalize their excessive game playing even though their odds of becoming the next big thing in the field are slim. Thus, it is anticipated that the issues above will restrain market expansion.

Global Esports Market Opportunities

A Large Number of Esports Events to Spur Market Opportunities

One of the most significant prospects for players competing in the global market is the increase in large-scale events. Among the important esports events in 2019 were the International, Overwatch League Championship, League of Legends (League) World Championship, and Call of Duty World League. Such occasions offer the option for the participants to make market investments, which would boost the industry's expansion even more. Furthermore, due to technical developments in virtual reality esports leagues, 3D scans, and human facial recognition technologies, the market's players have the chance to improve and change video games for users continuously.

Regional Analysis

The Preeminence of Asia-Pacific Over Others

Region-wise, the global market comprises North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Asia-Pacific will command the largest market share over the forecast period, growing at a CAGR of 21.92%. The expansion of esports in the region has been spurred by the rising amount of internet users and mobile gamers. In 2003, China declared esports to be an official sport; since then, the market has offered professional jobs to the national esports operators. A well-known country for esports, South Korea provides gamers with a standard infrastructure that includes trainers, gaming facilities, analysts, and cooks. For instance, the Korean Esports Association (KeSPA) and SK Telecom agreed to a three-year sponsorship agreement in 2022. As a result of the arrangement, SK Telecom is now KeSPA's official sponsor and will coach the Korean esports team for forthcoming Asian tournaments. Several market-related efforts and innovations are anticipated to fuel additional growth during the anticipated period.

The most profitable gaming community is found in nations like China, a significant factor in expanding the esports sector in the Asia-Pacific region. Several foreign organizations are breaking into the industry, either by buying stock in Chinese gaming companies or by endorsing teams of professional players. Companies like Alibaba Group are increasing their investments in top-tier esports events in China, where teams of players compete against one another in open-access online arenas. Six mainland Chinese cities—Shanghai, Xian, Hangzhou, Hainan, Sanya, Chongqing, and Haikou—are vying to become the following big esports centers at the moment.

North America is projected to expand at a CAGR of 21.2% by 2030, accounting for USD 1,122 million. As a result of the Overwatch League and the franchised North American League of Legends Championship Series, growth and investment in the region are anticipated to continue. Esports in the United States has developed into a multi-million-dollar industry due to the support of leagues, players, game developers, streaming services, and TV networks. By organizing competitions for kids, assisting high schools in establishing esports clubs, and providing mentorship and coaching, the North America Scholastic eSports Federation (NASEF) aims to develop the ecosystem. In 2021, the North America Scholastic esports Federation partnered with Tallo. The alliance has established the most incredible online network of companies, young esports talent, and academic institutions.

One of the world's most significant esports and gaming markets is located in the United States, which is credited with creating the esports craze. The majority of Esports game designers and gear manufacturers call it home. The country's Esports market is boosted by high average customer spending, intense gaming penetration, and relatively young and receptive populations. The expansion of the North American market is anticipated to continue being robust as viewership and audience numbers rise.

Segmental Analysis

The global market is segregated based on the revenue model, streaming platform, and region.

By Revenue Model

Based on the revenue model, the global market includes Media Rights, Advertising & Sponsorships, Merchandise & Tickets, and Others.

The Advertising & Sponsorships section is projected to grow at a CAGR of 22% by 2030, accounting for the largest market share. The need for sponsorships and advertising has grown impressively with esports' increasing popularity and viewership. While financial information is rarely made public, many more high-profile acquisitions are now. Brands may create distinctive customer marketing experiences by collaborating with an esports influencer.

Through these alliances, fans can interact with their favorite esports personalities while sponsors may simultaneously promote their goods. Selecting the ideal esports influencer to collaborate with is essential for a successful influencer marketing campaign. This approach is being used by many businesses to raise brand and product exposure. Proctor & Gamble, for instance, has utilized this method to interact with its esports demographic. Gillette's parent business worked with Twitch for the Gillette Gaming Alliance promotion, which included 11 streamers from different nations.

The Media Rights section will hold the second-largest market share. Broadcast and media rights for esports have recently changed significantly due to Twitch and YouTube securing sole streaming rights to some of the biggest games in the industry. To expand their audiences across traditional broadcast media, game designers and organizing companies have been assertively looking to form creative partnerships with leading mainstream media partners. This is done by combining their promotional power with their storytelling and production know-how.

By Streaming Platform

Based on the streaming platform, the global market includes Twitch, YouTube, and Others.

The Twitch section is projected to advance at a CAGR of 21.4% by 2030, acquiring the largest market share. Twitch is a live broadcasting service in the United States managed by Twitch Interactive, an Amazon.com subsidiary. The platform was first introduced in June 2011, and since then, it has grown immensely in popularity. Some of the most well-known esports events in the world are aired on Twitch, with professional players competing for lucrative prize money. Twitch claims that the average number of viewers is currently at 2,000,000. With 26.5 million daily visits, it has more than 6 million unique contributors streaming content each month.

The YouTube section will hold the second-largest market share. The headquarters of the American online video-sharing service YouTube is in San Bruno, California. More than 2 billion users log in monthly are using the site. The site is available in 80 languages and located in over 100 other nations. As a platform, YouTube has been actively investing in several end-to-end and exclusive deals and has collaborated closely with different esports organizations in recent years.

Recent Developments

• In February 2023, EA SPORTSTM signed Max Verstappen.
• In December 2022, The third iteration of Red Bull Home Ground will be produced by Gfinity, a prominent esports and gaming solutions provider, who recently announced the extension of its long-standing cooperation with Red Bull.