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It’s no secret that we’re living in a golden age of esports. Like pro wrestling in the 1980s, rap music in the 1990s and online gaming in the 2000s, esports have finally gone from an underground movement to mainstream pop culture adoption over the past decade.
However, where the esports renaissance will go in the future is still uncertain, and many investors are hesitant to make a play in the nascent industry.
As the founder and CEO of Team 33, a professional esports team, I have a good sense of where the esports world is headed. I’ve paid close attention to the industry’s growth since its inception, and am actively helping shape its future. Below, I’ve shared my best predictions as to where esports will go in the years ahead based on recent industry developments.
$2 Billion Global Revenue
Last year, Newzoo’s Global Esports Market Report — one of the industry’s most trusted sources for market forecasting and analysis — found that global esports revenues hit $950 million in 2019. For 2020, it predicted revenues to hit $1.1 billion, the first time the industry has ever crossed the ten-figure threshold.
In 2022, it’s likely that the global esports market will generate somewhere in the ballpark of nearly $2 billion in revenue. This is a figure reported by Insider Intelligence supported by recent market research.
The lion’s share of esports revenues is generated by media deals, sponsorships and broadcasting rights. Several unexpected deals took place in recent months that have accelerated previous growth expectations. For example, we saw the following new sponsors move into the space in August 2021 alone:
• Amazon (European Masters)
• NASCAR (Allied Esports)
• Discord (Tribe Gaming)
• TUMI (Evil Geniuses)
• Doritos (Bacon Time)
• Mastercard (League of Legends European Championship)
These global brands have poured new funding and interest into the industry at the highest level, and will likely help catalyze growth by securing larger venues and media distribution deals.
Mobile devices such as tablets and smartphones represent the future of esports. While console gaming is still largely a niche market, the vast majority of consumers use a mobile device running Android or iOS every day. If we want to lower barriers to entry in esports and make the industry more accessible to all, we should understand that mobile gaming is the way of the future.
Mobile gaming is more popular than console and PC gaming combined, representing 57 percent of the $173 billion global gaming market. There are two key takeaways from this data.
First, mobile-oriented esports companies and developers have a longer growth runway than those appealing exclusively to hardcore gamers (e.g., PC and console gamers). Second, the esports industry as a whole represents less than 1 percent of the entire gaming market. Therefore, esports has a lot of potential market share it can gain in the years ahead.
European Market Growth
The Asia-Pacific (APAC) market is the largest in the esports industry, accounting for 57 percent of global esports viewership in 2019, according to that Insider Intelligence article, and is home to an astounding 1.5 billion gamers. By contrast, the European market is far less saturated and is home to many gamers who have yet to tap into esports. In total, Europe represents only about $138 million of global esports revenues.
Alongside Latin America, I believe that companies targeting the European esports market could have the potential for sustainable long-term growth given the current state of development in the industry within these regions.
Live Esports Betting
Although controversial, one of the recent potential revenue streams in esports is betting. Given the generally young demographic base of esports, there is, understandably, resistance to the idea of embracing institutionalized betting within the ecosystem.
However, betting and gambling already exist in esports and traditional sports (which young people are equally exposed to) on the grey market and at institutional levels, respectively. Future partnerships between esports companies and betting firms could allow the industry to control and regulate esports betting responsibly, curb the grey market and bring in significant new revenues for the industry.
Esports: The Next Growth Industry
We’re living in disruptive times where brand new industries are rapidly rising to international prominence. Esports is among them. Whereas the NFL’s Super Bowl was once seen as the pinnacle of sports broadcasting with untouchable viewership numbers, the 2019 League of Legends World Championship garnered just as many views (over 100 million viewers compared to the Super Bowl’s 100.7 million viewers in 2019).
As a nascent multi-billion dollar market, investors would be wise to take esports seriously and consider getting in on the action while the industry is still in the early stages of its growth.