Esports tournaments are big and getting bigger – much, much bigger, if you look at the data. People all over the world are watching, competing, and gambling on one of the fastest-growing forms of entertainment ever. No longer the playground of nerds alone, video games have become a unifying sport for the younger masses.
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Young esports fans have begun to acquire some serious capital, too. According to the latest figures, Gen Z will become the largest generation of consumers by the end of 2020, accounting for $143 billion in spending.
How Esports Tournaments Attract Investors
Investors should seriously consider the rise of esports as the next great investment opportunity. Here are a few facts to illustrate why:
Audience
The esports global audience will grow to 307 million fans by 2021. (Newzoo)
Esports awareness has grown from 809 million people in 2015 to more than 1.5 billion in 2019. (Newzoo)
One study found that 32% of people between the ages of 16 and 24 and 30% of people between the ages of 25 and 34 said they had recently watched an esports tournament (Hootsuite and We Are Social)
The same study found that 31% of the younger group and 33% of the older group indicated an interest in watching conventional sports. (Hootsuite and We Are Social)
Estimates project esports to surpass every major American sports league except the NFL in viewership by 2021. (Activate)
Men watch esports more than women, but women watch as well, with most studies estimating the male share of viewership between 70-80%. (PwC)
Traditional sports and esports enjoy a close relationship with more than 200 professional athletes competing on or sponsoring esports teams (Reddit and PwC)
A survey of American adults in 2018 found that 59% of participants aged 18 to 29 had seen, read, or heard about esports, and 37% had watched a competition. (Statista)
As expected, young people love esports, and they are far more likely than older generations to consume esports content. They are also more likely to compete in esports tournaments, creating a new generation of superstar influencers hidden from the eyes of most people over 50. Men greatly outnumber women in esports viewership — hardly a surprise — but women’s interest accounts for a sizeable chunk of the market. As awareness and engagement grow, so too will revenue.
Championship Events
At its peak, the League of Legends World Finals in 2019 attracted nearly 4 million viewers, with an average of more than 1 million. (Esports Charts)
Players in the League of Legends World Finals in 2019 competed for a prize pool of $2.225 million. (Esports Charts)
Fortnite, the smash hit multiplatform game of the last two years, generated a staggering $30 million for its prize pool at the Fortnite World Series in 2019… (The Verge)
…but Dota 2’s The International tournament retained its crown as the top esports tournament in the world, breaking the $30 million barrier. (The Verge)
Also in November 2019, the Free Fire World Series in Rio attracted more than 2 million viewers at its peak, with another Free Fire event in Brazil capturing more than 1 million at peak. (Esports Charts)
In July 2018, the International Olympic Committee met with more than 150 representatives from the esports world to discuss potential future collaborations. (Olympic.org)
The 2019 League of Legends World Championship attracted more viewers than the Super Bowl. (CNBC)
You read that right. League of Legends attracted more viewers than the Super Bowl with its major event in 2019, topping the 100 million mark. Several games have inspired massive tournaments with huge prize pools, and gamers are either gunning for a piece of the pie or tuning in to see who comes out on top. Esports aspires to make the jump to the Olympics in the future, and from the looks of things, the Olympics are taking the revolution seriously.
Revenue
Esports generated $869 million in revenue in 2018 and projects to hit $2.96 billion by 2022. (Goldman Sachs)
Sponsorships ($359.4 million) more than doubled advertising ($173.8 million) contributions to esports revenue in 2018. (Newzoo)
China is now the second biggest esports market after the United States, with Western Europe a close third. (Newzoo)
Until now, Dota 2 has been the king of prize money awarded at $177 million as of April 2019. (Statista)
That said, the company behind Fortnite, Epic Games, put up $100 million in prize pools in 2018, with another $100 million on the table for 2019, which would make Fortnite the new winner. (TechCrunch)
Fornite’s big spending should surprise no one, given that the game pulls in as much as $300 million a month in in-game purchases alone. (The Verge)
Dota 2’s $177 million lifetime prize pool looked untouchable, then the new generation of games came crashing through the old barriers. Fortnite may be the first to offer $100 million in prizes within a single year, but it won’t be the last. As young gamers grow up, fatten their wallets, and spread the gospel of esports to their friends and families, other games will break the same mark. Within a few years, $100 million could easily become the price of entry instead of the world record.
Gambling
American bookmakers have begun to offer bets on esports in Nevada and, as of November 2019, New Jersey. (Esports Insider)
Some estimates say esports gambling revenue will skyrocket from $24 million in 2015 to $1.8 billion by 2020. (Statista)
Other estimates are much more enthusiastic, putting the estimate of total money gambled by 2020 at nearly $13 billion. (The Lines)
Despite being released in 2012, Counter-Strike: Global Offense continues to engage audiences, coming second only to League of Legends in gambling. (Legal Sports Report)
Where sports go, so do gamblers. Esports gambling may be one of the most underappreciated aspects of the niche, with gambling revenue projected to outstrip the actual prize pools for players for years to come. The classic Counter-Strike: Global Offensive started the trend, which explains its longevity in esports gambling circles. It won’t be long before a new generation of gambling-friendly games takes this market to the next level.
An Investment Approaching Critical Mass
If you’re an investor with an eye toward the future, what are you waiting for? Esports has all the markings of an industry that’s ready to explode. The players, audiences, and gamblers love their blossoming community, and the companies behind the games are thriving as they pull out all the stops to grow their businesses. If the trends hold true, esports will dominate the conversation of Generation Z for decades to come. Get in now, while you still have the chance to be an early investor, if you want to make the most of this once-in-a-lifetime industry boom.
