Esports – Understanding The Local And Global Ecosystem

ESPORTS – Understanding The Local And Global Ecosystem

We expect esports to continue to be a major part of the sports and entertainment landscape with global investors, brands, media outlets, and consumers all giving it well deserved attention.

It has been fascinating watching the growth and development of esports over the past years, including from the unique perspective of a team owner and competition platform manager through my time as CEO of Adelaide Football Club.

At XT Ventures, we expect esports to continue to be a major part of the sports and entertainment landscape with global investors, brands, media outlets, and consumers all giving it well deserved attention.

We share an article below by Isaac McIntyre from Dot Esports, that provides a great overview of the Australian esports market covering the competitions, leagues and star players. Before you dive into the full article, let’s take a quick look at the global ecosystem by the numbers to understand the impact and scale of opportunity presented.

by 2025 the global esports market, combined with game streaming, is expected to be worth more than $3.5billion

“Up and to the right” – the market is big and growing bigger

By 2024 there are expected to be almost 286M esports enthusiasts globally[i].
By 2025 the global esports market, combined with game streaming, is expected to be worth more than $3.5B[ii]
Currently around 75% of the $833.6M in total esports market revenue is generated from sponsorships and media rights[iii]

APAC is a key global market

The Asia Pacific region represents more than 50% of the global esports and gaming audience[iv]
In 2019 global esports awareness reached 1.8B people. This was projected to rise to 2B in 2020, with over 25% (530M) from China[v]

The platforms are busy

In 2020, the top live streaming platforms were Twitch (1.6B hours), YouTube (517M hours), and Facebook Gaming (280M hours)[vi]

The audiences are younger

62% of internet users who watch esports tournaments are between the ages of 16 to 34 years with a little over 70% male [vii]

Esports teams are gaining significant valuations

In 2020, the most valuable esports team in was TSM at $410M. Team Liquid ($310M) and FazeClan ($305M) are also showing some healthy valuations (Forbes)[viii]

Technology will continue to make its mark

Immersive technologies such aS virtual and augmented reality have the potential to revolutionise how players and fans engage with esports and gaming.

Blockchain: like traditional sport, esports teams will increasingly explore ways to monetise fans directly with blockchain and NFTs sure to play their part. Given that esports fans are digital natives already very familiar with buying digital goods and in-game items, the on-boarding process is a much smoother process than in some other sports and sectors.
Mobile esports: With its low barriers to entry, mobile esports is taking share away from the historical domination of console and PC titles. Most people in mature and emerging markets have smartphones, and mobile games typically have low specs, helping mobile esports flourish. The positive impact of widespread 5G will further support this trend.
Co-Streaming: Democratising esports broadcasts and allowing co-streaming will continue to increase in frequency given its ability to support publishers and organisers exponentially grow their total addressable audience.
Live-Streaming: In the next 12 months, live streaming platforms will become increasingly interactive. An example of this is Rival Peak which in 2021 generated over 100M minutes watched in just three months on Facebook Gaming[ix]. Featuring AI-controlled contestants, viewers from over 70 countries could help these virtual contestants solve puzzles and progress through the game. Immediacy and community were leveraged to make the broadcasts more engaging for fans, which in turn provides additional paths for direct monetisation.
Artificial Intelligence: Whether it is AI teams taking on pro teams in experimental matches, players and coaches using AI technology to help improve their game analysis and strategy, or AI playing its part to eliminate match fixing, we are going to increasingly see AI / ML interconnected with esports.
Immersive Reality: Immersive technologies such as virtual and augmented reality have the potential to revolutionise how players and fans engage with esports and gaming. For fans it could see them moving from passive observes to taking their place in the middle of the action – a definite game changer.

There is a thirst for content

Australian digital media company GAMURS, now operates a growing stable of consumer facing brands who collectively attract more than 50M users to their websites each month. This already impressive number is projected to grow several fold over the next 3 years.

Non-Endemic brands are beginning to “get it”

Australian company, Livewire Group, is growing fast off the back of their data and research fuelled specialisation in gaming marketing and gametech. They work with brands to help them engage with global and regional gaming audiences who have cut the cord from traditional marketing platforms.

At XT Ventures we will continue to engage closely with this ever changing and growing sector.