TECHNOLOGY How the Traditional Sports Market Compares to the eSports Market

How the Traditional Sports Industry Stacks Up Against the eSports Industry
In little than a decade, electronic sports (also known as eSports) went from being a fringe subculture to becoming a mainstream sector that is now worth billions of dollars.

The market is expanding at a dizzying pace, and with large technology companies like Amazon and Google fighting for a piece of the action, the future of this sector is sure to be an interesting one.

It should come as no surprise that traditional sports, which eSports sprang out of, are frequently compared to eSports. E-sports, on the other hand, do not adhere to any of the conventional rules that govern traditional sports; hence, it is difficult to compare the two in terms of audience size, market potential, and revenue.

A Level Playing Field for All?

eSports is an umbrella term for events that are primarily played on electronic devices by professional video gamers. The first competition was held in 1972.

Since 2017, there has been a 60 percent increase in audience members between the ages of 16 and 24, which is supporting the quick expansion of this burgeoning business. It is anticipated that the global audience would increase to 276 million by the year 2022. League of Legends events frequently boast a greater viewership than some of the most popular leagues in the United States, including the following:

Although viewership can exceed that of well-known professional leagues, the leagues’ ability to monetize their product is not yet on par with such leagues. Having said that, this facet is now reaching a point where it is sufficiently growing to be considered a danger to more traditional leagues.

What is the Economic Value of eSports?

eSports will reportedly generate more than $1 billion in income in 2019, and will reach $3 billion by 2022, according to Goldman Sachs. eSports lays the groundwork for a complete ecosystem of options, which includes live-streaming, game development, player fanbases, and brand investments for sponsorship and advertising. At the moment, advertising and sponsorship contribute 82 percent of the industry’s total revenue.

Even though eSports under-indexes on monetization in relation to the size of its audience, there is a huge opportunity for it to close the gap, given the predicted 35 percent compound annual growth rate (CAGR) for total eSports revenue between 2017 and 2022. This growth is expected to take place between the years 2017 and 2022.

Getting the Attention of the Most Prominent Players in the World

Live-streaming systems are largely responsible for the growing popularity of eSports competitions. Amazon was able to capitalize on the rapidly expanding audience for eSports, in addition to other live-streaming prospects, as a result of the company’s purchase of the largest video-streaming website, Twitch. Since the acquisition in 2014, the number of regular viewers has increased by a factor of two to reach 15 million, which is equivalent to half of YouTube’s daily viewing.

Google, which was ultimately unsuccessful in its attempt to acquire Twitch, has just launched its own significant expansion into the gaming industry with the launch of its cloud gaming service, Google Stadia. The company’s ultimate goal is that it will encourage more live-streamers to continue using YouTube rather than alternative services.

The Path Ahead for Electronic Sports

With the passage of time, traditional sports will be surpassed by eSports in terms of their ability to tap into larger advertising budgets and reach national, regional, and global levels. The inclusion of eSports as a medal event at the 2022 Asian Games is a step toward perhaps earning the sport’s spot on the Olympic program.

The overall landscape of eSports is beginning to more actively compete with those of the major leagues. Even though it has a huge following all over the world, devoted followers, and annual earnings in the billions of dollars, the sector is just starting to take off.

The topic of discussion, on the other hand, is not the competition between eSports and more traditional sports. It centers on the change toward glorifying a society that is fully virtual as opposed to one that is tangible, which has ramifications that are considerably more far-reaching.