How eSports Is Evolving In The 2020s
Since the early 2000s, esports has come a long way from being a fringe interest among die-hard gamers to becoming a media juggernaut with a global audience estimated to reach around 500m viewers. As esports continues to rise in popularity, industry experts are projecting that the market is on track to reach revenues of almost $1.6bn by 2023, meaning it would have more than doubled in a matter of five years.
Notwithstanding its momentous growth, esports is still very much in its infancy as an industry. With technological innovations being developed, and more casual audiences recognising video games as legitimate sporting events, esports is all set to capture the world’s attention as a new and exciting form of mass entertainment. The new decade is promising to be a big one for esports with several new developments shaping the future of the industry.
Mobile & Console esports
Since its inception, the esports market has been dominated by PC gaming. However, recent years have seen mobile technology make strides to compete with the power of desktop PCs. Mobile firmware continues to improve its online connectivity, and phones and tablets are adapting to capably support the hi-res graphics of today’s online games. As high-end smartphones are priced at a more accessible entry point to your average gaming PC, more and more people are turning towards their mobile devices to enter the esports world, especially with regards to online multiplayer action games.
Towards the end of 2020, mobile gaming experienced a definite surge in popularity, with battle royale titles such as PlayerUnknown’s Battlegrounds (PUBG) and Garena Free Fire beginning to amass greater viewership and engagement than long-time PC staples such as Counter-Strike: Global Offensive and Dota 2. Consumer interest in mobile esports continues to gather steam across Asia, China, and Latin America. And with more and more mobile esports tournaments being set up around Europe and North America, mobile esports is becoming one of the fastest growing competitive gaming markets in the world.
The final quarter of 2020 also saw the launch of the next generation of video game consoles from two industry giants—Sony and Microsoft. With the release of the Playstation 5 and the Xbox Series X/S respectively, gaming consoles are increasingly and rapidly closing the gap on PC’s monopoly on the esports market. Boasting faster performance and huge improvements in graphics, these next-gen consoles are designed to encourage developers to design new esports titles that have the potential to debut exclusively on either platform, meaning they can build up their own targeted esports audience outside of the PC market.
Diversified Revenue Streams
The esports business model is primarily built on sponsorships and merchandising agreements. The more viewers a tournament can attract, the more they can charge for brands to sponsor their teams and content. Once teams garner a significant fan base, they can also supplement their income by selling official merchandise.
Despite esports continuing to gain widespread popularity throughout the pandemic, sponsorship revenues experienced a slight blip. Several high-profile teams were unable to fulfil contractual obligations due to travel restrictions. Naturally, international arena tournaments were also forced to cancel, resulting in revenue losses from ticket sales.
With the travel market remaining volatile, esports teams are now looking to diversify their revenue through forward-thinking content creation strategies geared towards their fans. Subscription package models are proving to be a very effective monetization strategy for esports teams. These digital passes offer fans access to tailored online videos, exclusive merchandise, private seminars, and more. Over the last decade or so, video gamers have become increasingly accustomed to in-game purchase models, which further enhance their overall gaming experience. As such, esports can leverage its insight into gamers’ wants to create consumer payment models that will resonate with fans in the long-term and sustain the industry further.
Celebrity & Athlete Endorsements
You know an industry is really booming when it catches the attention of high-profile celebrities. Esports has continued to see Hollywood A-listers, pop superstars, and sporting legends make multi-million-dollar investments in esports teams. Big names such as Michael Jordan, David Beckham, Will Smith, and Drake have already put their money and their clout behind major esports teams. As the sport continues to grow and gain greater legitimacy, it’s certain that more household names will look towards the gaming industry with interest.
The football industry, in particular, has been quick to leverage the vast opportunities professional esports has to offer in its favour. Many clubs have signed their own esports teams and are investing heavily into the market. And in a move that sent shockwaves through the industry, Manchester United and French International star Paul Pogba announced that he was joining pro esports team Verdansk FC to play Call of Duty: Warzone. The signing was headline news and is sure to have sparked interest among a new audience.
Celebrity Pro-Am esports tournaments also rose in popularity throughout the pandemic. The likes of UFC fighter Demetrious Johnson, NBA star Paul George, music producer Diplo, rapper Lil Yachty, and many other well-known actors and athletes have participated in online tournaments competing against some of the finest gamers in the industry. Celebrity endorsements are continuing to boost esports’ global profile, ensuring the market will reach new demographics of people not already exposed to the scene. Market research shows that esports demographics will increase by 14% by the end of 2021, which equates to more than 550 million esports fans around the world.