Esports is a booming global industry where skilled video gamers play competitive sports. In the same way that traditional sports have competitions in baseball, basketball, football, and the likes, esports encompasses competitions across a variety of video games.
Contrary to common perceptions though, the industry is real, growing globally, and investable.
It’s not the first time eSports has been compared to its predecessor, traditional sports. However, eSports certainly has none of the typical confines of a traditional sport—so how does it compare in terms of revenue and statistics for investors?
The following article will include insights, not just for lovers of esports but also for those interested in investing in it.
Esports Viewership Vs Traditional Sports
The headlines around the esports viewership numbers that its major events are drawing have been generating a lot of buzzes.
As reports of steady rising viewership into 2020, the exact numbers have become increasingly important for organizations, sponsors, and the media to not ignore anymore.
In just a decade, eSports has evolved from an underground culture into a mainstream industry worth billions of dollars today.
One thing that has helped its quick rise is the number of viewership when compared to that of traditional sporting events. It’s a lot higher than its counterpart.
In fact, over 380 million people watch esports worldwide both online and in person. For example, more people watched the 2016 world finals of popular esports games, League of Legends which had 43 million viewers than the NBA Finals Game 7 that year which had 31 million viewers.
Sports betting represents the most popular product among esports fans. Betting on esports is identical to betting on traditional sports, with the caveat that the esports betting product is far less developed than the traditional sports betting product. Punters still prefer traditional sports betting because you can find more promotions and get better odds. Here you could find a list of UK online bookmakers that offer both esports betting and traditional sports betting all in one place so you can enjoy both worlds
Here is a rundown of both sports viewer’s stats from the bottom and how they rose to the top.
They have recorded some serious rapid growth. In 2012, the total esports viewership was 134 million, which consisted of 76 million occasional viewers and 58 million esports enthusiasts.
By 2018, that number had blown up to 395 million and this hosted 222 million occasional viewers and 173 million esports enthusiasts.
Therefore, from the year 2012 to 2018, total viewership grew by 195%.
But they have not stopped growing as esports is a fast-growing, ever-changing industry.
Events that brought about this huge viewership success include:
The Fortnite World Cup Solo Finals in the summer of 2019, which had a total hour watched mark of 1.8 million despites it being just under five hours of actual gameplay. Being one of the biggest esports events of the year, there were many bets placed on this three-day competition, and billion dollar prizes were claimed by esports bettors.
Note that gameplay hours are a common statistic used for measuring the popularity of esports since, like traditional sports, esports viewers tend to come in and drop out throughout the duration of the event.
Dota 2, became the largest esports event of the year, as it saw an incredible 1.1 million peak concurrent viewers on Twitch during the finals. This made it the most-watched esports event of all time. Like on Fortnite, many popular sportsbooks offer odds to bet on the results of the Dota 2 lines, with small differences between their stakes. Still a good research amongst the different bookies offering bets is always a recommended idea.
The League of Legends World Championship in 2019 was also a record-breaking esports event, boasting over 100 million viewers. Most of these fans tuned in via streaming services like Twitch and YouTube. In comparison, the Super Bowl that same year had 100.7 million viewers across the NFL’s digital properties and CBS. The 2019 League of Legends World Championship cemented the game as the most-viewed esports of all time, breaking streaming records on Twitch thanks to 1.7 million peak concurrent viewers on that one platform alone.
Even with its rapidly growing numbers of views, esports has significantly less viewership than traditional sports when it comes to regular-season events.
For example, a match that took place during the LEC Spring Split, which translates to a regular-season game, had over 400,000 peak viewers, while the regular-season NFL games report 16.5 million viewers per game in 2019. This is a very important point to note but of course, it’s hard to compare the two when the data is offered in such different ways.
Esports events and streams are often measured by their peak concurrent viewership counts and hours watched total, whereas traditional sporting events only offer their total viewership numbers. Esports viewers are also split between many different streaming platforms, including Twitch, YouTube, and other official channels for the event. Getting even more specific, some people view the game on unofficial channels on Twitch, like streamers who are broadcasting the game to do live reactions to the event. This doesn’t allow for a proper comparison in popularity; since many esports viewers are not officially accounted for.
Still, it seems that esports – while growing at an incredibly rapid pace – are nowhere near the numbers traditional sports are pulling in around the world.
Projected Viewership for Esports
Esports viewership is expected to grow to 644 million by 2022 at an estimate of 347 million occasional viewers and 297 million esports enthusiasts. This represents a growth in total viewership of 63% over the next 4 years.
Traditional Sports Viewership
Traditional sports viewership is still larger than esports. This may remain the case, even with esports’ recent growth spurt in comparison to that of traditional sports. Indeed, the traditional sports industry is one of the few types of programs that can still command millions of viewers at a time on television.
Soccer remains the most popular sport in the world, with an estimated 4 billion fans globally. Cricket is second with an estimated 2.5 billion fans globally.
Projected Viewership for Traditional Sports
It’s difficult to say where traditional sports viewership goes from here. You’d hardly dare to imagine powerhouses like soccer or cricket experience a fall from grace. Overall trends will likely be in favor also in the coming years. Thus, while a more in-depth analysis would be required to break-down expectations for the traditional sports industry, there is certainly room for esports to continue earning a higher proportion of the overall eyeballs moving forward.
Esports vs Sports Viewership
Demographic changes need to be considered as esports are relatively more popular with younger consumers, many of whom grew up playing video games and who have an innate understanding of gameplay that previous generations do not.
Technological advances may once again play a hand in shaping the future of esports and sports viewership. Advancements in mobile technology have already made it so that 5 billion people globally have a mobile phone, with over half of the devices being smartphones. The introduction of 5G is widely expected to take place in the next few years, which will be an added bonus to both sides and will increase people’s ability to access content that requires an internet connection.
Esports Industry Revenue Statistics
According to Goldman Sachs, eSports exceeded $1 billion in revenue in 2019 and will reach $3 billion by 2022.
It’s said that 82% of revenue currently comes from live-streaming, game development, player fanbases, and brand investments for sponsorship and advertising
Esports has created the foundation for an entire ecosystem of investment opportunities.
As a result, the industry has seen a huge uptick in investment from venture capitalists, and more recently from private equity firms. The number of investments in esports has doubled since 2018, as investments went up to $4.5 billion from just $490 million the year before, a staggering YoY growth rate of 837%, per Deloitte. These investments are distributed to players across the ecosystem — from esports to tournament operators, to digital broadcasters — allowing it to function and grow.
Investing in Esports
From an investment perspective, though esports revolves around competitive gaming, it is ultimately a digital media and entertainment investment opportunity.
So, now is a great time to invest in esports, many investors might find it challenging to navigate its complexity, but this complexity translates to a vast, broad range of investment opportunities as the challenge and opportunity ahead involves monetizing this user and viewer base, which is still in its incipient stages.
Esports currently has an audience of 385 million, yet only generates ~$1 billion in revenue. Therefore, this is why I believe esports is possibly one of the best investment opportunities of the coming decade.
Exciting times undoubtedly lie ahead, cause, with its fragmented landscape and digital platform, the esports sector holds promise for a multitude of monetization opportunities.
The Future of Esports
ESports will tap into bigger advertising budgets, and reach national, regional, and global levels, as traditional sports are able to. But don’t expect all these things to happen soon because it is going to take time. Another achievement for eSports is that it will be a medal event in the 2022 Asian Games, which could pave the way for full Olympic status.
It is noticeable that eSports is starting to seriously compete with the big leagues. With a massive worldwide appeal, passionate fans, and billion-dollar revenues, the industry is only beginning to take flight.
When it has to do with viewership, traditional sports still garner more viewers than esports.
But it might only be a matter of time until that’s not the case. Esports rocketing numbers sure is something to watch out for.