September 7, 2021
How esports changed the game
One may say that esports has revolutionised the worlds of sport and gaming. During the course of the pandemic, amidst the several lockdowns and social distancing restrictions imposed, people turned to video gaming for their source of digital entertainment. Whilst economies and stock markets where faltering, video game developers experienced a surge in users, engagement and revenue. According to research, four out of five consumers played video games in the last six months in the United States alone. In addition to this, the highest earning media sector last year was gaming, where the global video game revenue shot up by 20%. It is worth mentioning that the revenue gaming brought in was far greater than the revenue generated by both the film and sports industries combined – a staggering feat!
When analysing these statistics, it is easy to understand why many claim that esports changed the game. In understanding the evolution of video games, one realises that there has been a marked shift in the business model, with video gaming moving from a player-centric business-to-customer market towards a view-centric business-to-customer market. What exactly does this mean? Customarily, video game developers targered customers who essentially simply wanted to play games. However, through the advancement of esports, video game developers are not only targeting the customer, but also the viewers of competitive gaming. This has led to the creation of an entire ecosystem around the esports industry, consisting of a number of key stakeholders, such as professional team players, broadcasters, streaming services and sponsors to name but a few.
As the industry has developed, esports has created a new marketplace. Big brands have turned their focus on the young, digitally savvy esports audience. A clear example of this took place in 2018, where giants McDonalds decided not to renew their fifteen-year sponsorship with football giants Bundesliga, opting to shift their focus to a esports league brand instead. As the esports ecosystem continued to developed, we have seen the emergence of a number of gaming-dedicated facilties, not to mention the iHotel, which is an entire hotel dedicated to gaming. The industry has also infiltrated the financial services sector. In China, one of the largest banks issued an exclusive esports credit card, whilst in the United States, there have been a number of funds and stocks pertaining to esports and gaming which started trading on the exchange.
This is just the start. The industry is set for further growth. The next big trend to look out for is mobile gaming, which will see the industry grow through the use of a new platform. The PC platform and the console are the two most well established platforms, but one cannot ignore the immense potential of the mobile platform. According to SuperData, the mobile platform represents both the largest platform in terms of revenue as well as the fastest growing one. Data shows that revenues on this platform have grown at an annual rate of 22%, significantly outpacing both the PC and console platforms.
Whilst predicting the future of any industry is a tricky task, the rate at which the esports industry is growing will undoubtedly lead to infinite opportunities. Technology is advancing at unprecedented rates, which will lead to all kinds of innovation in the industry. At the moment, it certainly seems like there is no limit to the potential for this industry and it would be interesting to see how the industry continues to grow and reach new heights in the months to come.
Sarah Martin is a Senior Consultant at Seed.