Why Is Esports Quickly Becoming A Billion-Pound Industry?

Just about everyone who’s interested to learn more about esports knows that it’s big money. Gamers are typically blown away by just how big some of the competition prizes can be.

Why Is Esports Quickly Becoming A Billion-Pound Industry?

And while Esports may be just one small section of the two hundred billion dollar of the entire global gaming industry, it is clear that the money that goes into esports is now a significant portion of that sum.

As interest in the sport builds, projections for the growth of the esports industry are sky-high.

And while the coronavirus put dampeners on the world’s economy at large, and the esports industry was affected, many online games continued still, and the esports industry was always destined to survive it.

In this article, we’re going to go into how fast the esports industry is growing, how it was affected by the pandemic, the sheer amount of money that goes into esports prize money, the various revenue streams of the industry, and a breakdown of the net worth of the most valuable esports teams around.

Please feel free to scroll ahead to any section that jumps out at you. Here goes!

Overview

Esports is effectively redefining sport as we know it. Esports consists of competitive, tournament-led gaming, with professional leagues drawn up, and a mass spectatorship. Not to mention big name sponsors.

The players who make it to these games will train and prepare at a level of intensity to match that of athletes in more traditional sports, and even the Olympics. As such, Esports is actually making its Olympic debut in 2022.

The esports phenomenon has its origins dating as far back as 1972 with the advent of home consoles arriving to so many homes. And, as technology grew and reached new limits, so did the phenomenon that’s esports.

Then with the building of the internet, online gaming soon became a thing, and soared public interest in esports further still. Now, it needn’t be limited to in-person tournaments alone.

And as the years progressed, tournament tickets were getting sold out within minutes of going on sale.

How Fast Is The Esports Industry Growing?

The passion for and enthusiasm for esports from both players and viewers has grown like no tomorrow. And esports is considered the world’s fastest growing sport.

In 2014, Amazon bought the game streaming platform Twitch for almost a billion dollars, and while some financial experts questioned the move, it’s a move that has nonetheless paid off, with well over 5 million active viewers watching live streams for over an hour and a half each day.

And the majority of esports viewers watch via Twitch.

And then in early October 2017, Nielsen reported that over 600 esports sponsorships had been put in place since early 2016.

Suddenly, investors started making big predictions for the net worth of the esports industry by 2022 and 2023. But unfortunately for those involved, things didn’t go quite as planned, which leads us nicely onto our next section…

How Was Esports Affected By The Pandemic?

But as with just about any industry, after so much boom there was bound to come a bust of some sort. The industry could not possibly continue to grow exponentially indefinitely.

The coronavirus hit certain countries in late 2019, and by March 2020 a global pandemic had struck society at large.

In the years 2020 and 2021 the international esports tournaments which were previously held in such high prestige simply could not go ahead as planned.

These tournaments were a big pull for those involved in the sports industry, and as you may imagine the growth of the industry did not go quite as well as had previously been predicted.

That said, all was not lost. And with online tournaments still pressing ahead, this meant that the esports industry had a strong resilience to the phenomenon and was able to hang on despite the industry’s (and the world’s) grand upheaval.

Esports Prize Money

As I mentioned earlier, esports is big bucks, and there’s nowhere that’s made it more evident than in the prize money…

In 2021, the highest paying esports games were as follows:

  • Dota 2, with well over 47 million dollars
  • Counter-Strike: Global Offensive, with well over 21 million dollars
  • PLAYERUNKNOWN’S BATTLEGROUNDS Mobile, with well over 17 million dollars
  • Arena of Valor, also with well over 17 million dollars
  • PLAYERUNKNOWN’S BATTLEGROUNDS, with well over 16 million dollars

But, believe me when I say that winning an esports game is certainly not the only way to make big bucks in the esports industry, which leads us nicely onto our next section.

Esports Industry Revenue Streams

According to the Newzoo figures cited by Statista, a whopping 69% of the revenue in the esports ecosystem comes from such things as team sponsorship and advertising.

There’s also a large proportion dedicated to media rights. Technology consulting firm Activate recently estimated that well over some 250 million people watch esports.

And according to Statista, there are predicted to be around 577.2 million viewers of esports worldwide by 2024.

The other revenue streams come from live tournament ticket sales, merchandise sales, and in-game purchases.

Esports Teams And Advertising

There were 5 particularly valuable esports teams with huge sponsorship deals when this article was written. They are as follows:

  • TSM, worth a whopping $410 million
  • G2 Esports, with over $5 million in rewards
  • Team Liquid,
  • Faze Clan, and
  • 100 Thieves

The Future Of The Esports Industry

Now that for most of us the global pandemic is well and truly over, the sports industry can return to holding massive in-person tournaments once again, which only means that the total revenue will continue to grow.

It had actually already reached 1.1 billion dollars in 2019, and while it did not quite double by 2022 as predicted before the pandemic, it could very well get there in a relatively short period of time.

Wrap Up

So, in answer to the question “Why Is Esports Quickly Becoming A Billion-pound Industry?” It’s because esports had already reached 1.1 billion dollars in 2019, and this had increased to approximately 1.8 billion when this article was written.

What’s more, esports is very much a rapidly growing industry, and has stood the test of time already, so it’s certain to hit that 2 billion dollar mark very soon – watch this space!

Ashley Newby
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