The numbers don’t lie – esports has been on the rise for a while now. The industry is valued at close to 1.1 billion dollars today and is expected to grow at an average of 13% through to 2023.
While North America, China, and South Korea are the largest esports markets in the world, the audience for esports is also expanding into other markets, with the COVID-19 pandemic only accelerating this growth. During March–April, more than 1 billion people viewed an esports event. Twitch is estimated to have grown its audience by 31% in March alone.
While the numbers are huge, what is truly impressive is the diversity of the audience who now engage in esports. By being centre stage, esports has been able to reach out to a whole new set of eyeballs ranging from mobile gamers to sports enthusiasts.
This is a significant change – previously esports found it challenging to attract mainstream audiences, with most of its growth coming from PC and console gamers who wanted to further engage with the games they love.
However, COVID-19 has opened up the world of esports to mobile gamers, different demographic groups, and even new markets. The following are some trends which have brought about this change.
Esports betting has been one of the biggest catalysts for wider audience growth. With virtually all major (non-gaming) sporting events cancelled during the initial months of the pandemic, esports took centre stage in the betting arena. Esports betting sites like Luckbox and Unikrn saw record-breaking numbers, traditional sites like Bet365 and DraftKings introduced esports-specific products, and even some casino operators and physical bookmakers began taking bets on popular esports tournaments.
Betters appreciated and responded to these new developments. A study that we did (in collaboration with ProdegeMR) with 1,068 gamblers in the UK found that 36% of gamblers bet on esports during the height of the pandemic. Our research also showed that 22% of non-esports betters will consider placing a bet on esports in the next three months.
While there has been some pull back as live sports have returned, analysts believe that the increased awareness of esports betting, plus its inherent advantages of being quick (short game sessions) and constantly available (no off peak), will help maintain its appeal among gamblers. We estimate that the esports betting market will double from $7 billion in 2019 to $14 billion worldwide by the end of this year.
Blurred lines between live sports and esports
It was not only betters who were missing the action – the lack of live sports has been keenly felt by fans worldwide, a lot of whom structure parts of their lives around sporting schedules. Sports associations/organisations worked quickly to fill the void by introducing a variety of esports initiatives. Formula One flagged off its virtual Grand Prix with active Formula 1 drivers participating, while the Bundesliga in Germany organised a FIFA 20 tournament involving esports professionals and professional football players.
The response to some of these events was astounding. Over 30 million tuned in to watch 19-year-old Dani Bereznay beat established F1 drivers such as Lando Norris and Nico Hülkenberg in virtual racing tracks all over the world.
With live sports slowly coming back, such collaborations between the real and the virtual have naturally subsided. However, not only have these tournaments introduced sports enthusiasts to esports, they have also increased sports star engagement with the industry. Football stars such as Gareth Bale and Antoine Griezmann have recently founded or invested in their own esports teams. With increased star support, the interest among sports fans in esports is expected to continue.
Increased brand support
The increased number of eyeballs on esports brought with it new advertising opportunities. While the lack of live stadium esports events has hurt the esports industry, it is still expected to grow 9.9% to $844 million this year. Along with endemic brands (HP, Intel, etc), new brands and categories (FMCG, auto, etc) are dipping their toes into esports and gaming in general and are thereby creating new customer engagement opportunities.
Chipotle has partnered with skateboarding superstar Tony Hawk, giving customers who order Hawk’s favourite burrito access to a demo version of his video game. Hawk will also appear on Chipotle’s Twitch page to engage with fans and promote the brand. Chicken wing specialist Wing Stop has a Twitch ordering extension, allowing customers to continue gaming while creating their order. Meanwhile, BMW initiated sponsorship deals with five of the world’s leading esports teams in April.
As more brands engage with the esports ecosystem, awareness and engagement among a wider set of consumers is bound to increase.
The rise of mobile esports
While esports was primarily the domain of PC and console games, recent years have seen mobile esports titles play an increasingly larger role in the industry, bringing with them a slew of new potential viewers. The advocated lockdown that most people had to go through during the pandemic has only hastened this trend.
China: While China has been very active in esports, it has mostly been dominated by male viewers and participants. With mobile’s rise to prominence in esports, China’s massive base of 473 million female mobile gamers has begun to participate. During the pandemic, 98% said that they spent more time on gaming – this increased engagement also resulted in a 75% to 100% increase in mobile esports viewership among this audience.
India: Long known as the sleeping giant in gaming, India is waking up from its slumber to engage in mobile esports, with the pandemic providing consumers with the time to participate. The ESL India Premiership, India’s flagship esports tournament, saw an 1866% increase in participation and a 325% increase in watch time; while Gamerji, an Indian mobile esports platform, registered a spike in its daily active users from 15,000 pre-pandemic to 50,000 currently.
This increased focus on mobile esports will continue to appeal to mobile-first consumers and help bring more casual gamers into the ecosystem.
While the esports growth engine continues to chug along, the springboard that COVID-19 has provided will resonate long after the pandemic recedes.