Esports are on the rise
At its most basic level esports is the act of people playing video games against each other for money. Millions will tune in to the biggest competitions, which are all streamed online and some are broadcast on major TV networks around the globe. Then of course there are the fans that go to the events, creating some of the loudest live crowds in the world. Total Esports viewership is expected to grow at a 9% compound annual growth rate (CAGR) between 2019 and 2023, up from 454 million in 2019 to 646 million in 2023, insider intelligence predicts.
COVID-19 turned arena attendances into virtual tournaments
Of course, most recently, this growth has been helped by the COVID-19 pandemic. Whilst traditional sports ground to a halt in terms of fans, Esports leagues expanded significantly. And whilst some leagues lost money in terms of arena attendances, most Esports leagues were able to consolidate and grow through online virtual tournaments.
It was predictable that with the growth of Esports, so would come licensing, enabling fans to support their teams and stars at the same time as being able to watch them virtually and become involved.
Brands embrace Esports related content
As a result of the growth, it’s no surprise that brands such as DHL, Mercedes and even Turtle Wax have been embraced by the Esports world after they made brilliant Esports related content with Esports influencers around their sponsorship of events and teams. On the financial side of things it has only really been the last five to seven years where significant money has started to come in, and at this stage the large majority of it comes from media rights, advertising and sponsorship. For example, Blizzard’s Overwatch League competition signed a broadcast deal with online streaming platform Twitch that was worth $90 million over two years. It’s not NFL or Premier League money, but in a few years it is very likely to be as lucrative as live sports.
Esports and merchandising
At the moment, data suggests that Esports fans are likely to spend less on merchandise than their counterpart fans of live sports. But many companies are suggesting that this will change in the coming years and merchandise, from apparel to toys and all points in between, will become a huge income generator for the Esports leagues as their popularity grows. Another reason why so many consumer product companies are showing interest in the sector is its ability to reach a youth market that has traditionally been difficult to reach in terms of merchandise.
Clearly there is a huge opportunity in Esports – one that is only really now becoming clearer and, in contrast to most other sectors, one that has actually been helped by the pandemic. So where will the industry move to next? The future of Esports will likely be powered by mobile, which will allow even more gamers and fans to pour in.
About the author
Francesca Ash, is publisher of Total Licensing. The licensing trade magazine gives detailed insight in key licensing market sectors. The combined online & quarterly printed publication features news, trends and developments in entertainment, brand, celebrity, sports etc around the world.