Blog Insight

The Billion-Dollar Industry You Never Knew Existed

If you’re generally aware of sports, then you’ve probably heard the names LeBron James, Tom Brady, and Lionel Messi. However, I doubt you’ve ever heard of Kuro Takhasomi or Seth “Scump” Abner. Even the most dedicated sports fans probably haven’t heard of them, though they’re both worldwide sports celebrities. The reason you’ve probably never heard of them is that they’re esports athletes. Before you write them off, know that they’re grossing upwards of $3 million per year, which is more than many professional athletes make in traditional sports.(1)

Surprised? You shouldn’t be.

Competitive video gaming is one of the fastest-growing worldwide sports and stands to become a billion-dollar industry over the next few years. eMarketer states that, according to Newzoo’s “2017 Global Esports Market Report,” esports will generate nearly $1.5 billion in revenue by 2020.(2)

Esports is launching into the mainstream across the US, Europe, and Asia at an exponential rate, and brands are taking notice. ESPN launched an inaugural awards ceremony last year and now has a section dedicated to everything esports on its website. Sports Illustrated has also taken notice and cites Newzoo’s projection that by 2019, 427 million people will be watching esports worldwide.(3)

How did this happen?

Competitive gaming isn’t new by any means, but many the recent technological advancements have propelled it into the spotlight as a mainstream sport. Virtual reality has played a role in bringing more attention to gaming, but the true technology game changer is the advancement in online streaming technology. In 2009, Beyond Gaming started a competitive online gaming site called Gamersaloon.com, where gamers could win prizes. With advances in online streaming technology, it was possible for gamers to play each other head-to-head without risking glitches or crashes to the games. People could watch these tournaments as well, and soon consistent winners began to grow fan bases.

Around that time, other companies were developing similar gaming outlets, and esports was becoming a legitimate business. Xbox, Nintendo, and PlayStation enabled streaming gameplay through their consoles. Gamers like KSI and Castro would stream themselves playing on social media channels like YouTube, and soon Twitch was born, launching an entirely new industry that monetized online streaming gameplay. Today, esports have become so ubiquitous that typing “lol” into online search results in “League of Legends,” not “laugh out loud.”

Higher education also has taken notice, and now more than 30 colleges offer video game scholarships,(4) with many more featuring competitive gaming clubs on campus. In mainstream entertainment, Hulu will stream four new esports series starting in fall 2017, and the NBA will launch its own esports league in 2018.(5) Now there are even competitive gaming consoles in casinos!

So now what?

What this means for brands is that it’s time to leap headfirst into the surging tide. In 2016, brands spent $325 million on esports advertising and sponsorships. This is projected to rise to $800 million by 2019, a 250 percent increase.(6) A recent study by our partner YouGov shows that esports has a global audience of 385 million viewers in 2017,(7) and eMarketer reports that 80 percent of esports viewers worldwide are in the under-35 demographic.(8) Now is the time for brands to take advantage of the advertising channels and sponsorships available in order to reach Millennials and Generation Z. Imagine being on the ground floor when the NBA suddenly took off. With our knowledge of the competitive gaming landscape, GLG and our partners in The PLUS Network can help you conquer the gaming world.

 
1. “Highest Overall Earnings,” e-Sports Earnings website, https://www.esportsearnings.com/players.
2. “Big European Sports Teams Eye Rising Esports Audience,” eMarketer website, March 23, 2017, https://www.emarketer.com/Article/Big-European-Sports-Teams-Eye-Rising-Esports-Audience/1015484.
3. “Tracking Company: 427 Million People Will Be Watching Esports by 2019,” Sports Illustrated website, May 11, 2016, https://www.si.com/more-sports/2016/05/11/esports-427-million-viewers-projected-future-gaming-growth.
4. Erin Richards, “Football, Basketball … Esports? Yes, It’s the Newest Team at School,” Milwaukee Journal Sentinel website, May 25, 2017, http://www.jsonline.com/story/news/education/2017/05/25/esports-team-spirit-without-wisconsin-high-schools/327775001/.
5. Julien Rath, “The NBA Is Launching Its Own Esports League,” Business Insider website, February 10, 2017, http://www.businessinsider.com/nba-launching-esports-league-2017-2.
6. Robert Elder, “The eSports Competitive Video Gaming Market Continues to Grow Revenues and Attract Investors,” Business Insider website, March 15, 2017, http://www.businessinsider.com/esports-market-growth-ready-for-mainstream-2017-3.
7. Stephen Harmston, “Just a Game?” Understanding the Existing and Future UK eSports Market,” YouGov website, September 27, 2017, https://yougov.co.uk/news/2017/09/27/just-game-understanding-existing-and-future-uk-esp/.
8. “Esports Viewer Share Worldwide, by Demographic, 2015,” eMarketer PRO Chart, March 24, 2016, http://na2.totalaccess.emarketer.com/chart.aspx?r=188742.