Just How Big are eSports?Published September 1, 2016 by Lee R
The pie seems to be growing, but how much and how fast?
You may have heard of eSports. You also may have heard it is on the rise. But what does this really mean, and does it mean anything for iGaming in particular? The answers appear to be through expansion and yes. Let´s find out how and why.
The word on the ´net is that the popularity and success of these titles have positioned eSports as a high-growth industry which remains in an early stage of expansion.
Any phenomenon or trend has to start with the product itself, or themselves. Currently, some of the most popular game titles in eSports include League of Legends, Defense of the Ancients, Halo, Call of Duty, and Hearthstone.
Experts generally agree that the roots of today´s eSports industry can be traced to the Nintendo World Championships, which were first held in 1990. This electronic video sports championship began to expand online with the emergence of something called multi-player games.
Multiplayer video games for the first time put more than one person simultaneously into the same game environment at the same time, enabling video players to compete against each instead of just against the machine.
Multiplayer game networking technology also enabled players to compete against each other from remote areas, with the internet making it possible for players located at different spots in the world to simultaneously compete in the same game, no matter how far the physical distance between them.
Online networking has amplified the exposure of the sport to millions of people worldwide, attracting sell-out crowds to arenas hosting live competitions, with millions more watching at home via network streams.
Today, eSports intelligence firm Newzoo estimates that the eSports industry generated a total revenue of $325 million in 2015, for year-on-year growth of over 67 percent from the 2014 total revenue figure of $194 million. Newzoo estimates that this figure will reach the magic ten figure mark of $1 billion by 2019.
Proliferation of eSports products has touched the wagering sectors of eGames and fantasy sports leagues, starting with eSportsbooks available for any operator to offer. Some operators further offer eGames betting via organic in-house graphics-based competitions, or standardized and copyrighted forms of fantasy sports leagues that allow punters to compile their own teams of eSports stars.
Big New Deals
Major brand partnerships are cropping up as well. Amazon recently put up nearly $1 billion to acquire Twitch, a website allowing video gamers to broadcast their play online, while ESPN now has added a section dedicated to eSports.
The Yahoo Agreement
Leading blog engine Yahoo´s eSports arm struck a two-year agreement with global eSports leader ESL to distribute Yahoo coverage of major ESL competitive series ESL One and IEM, with Yahoo covering new tournaments offering integrated sponsorship opportunities.
Further entrenchment of eSports in the sporting public´s eye is visible in the inclusion of eSports in major collegiate competition, such as last March´s second annual “Heroes of the Dorm” eSports tournament hosted by Blizzard Entertainment.
Now, the Betting Market
Eilers Research estimates the eSports betting market at approximately $2 billion in 2015, with that figure expected to exceed $23 billion by 2020 for an estimated $1.8 billion in revenue pie for betting operators.
The unregulated eSports gambling market represents an untapped pie as well. That market was on pace to reach $7.4 billion this year before being shut down because of its unauthorized reliance on skins as virtual currency, representing a figure 12 times larger than the eSports bets at regulated books according to Eilers & Krejcik Gaming and Narus Advisors.
How That Translates
Not all of that money will migrate to regulation, as it included untold amounts of underage users and black market play in major areas such as the U.S. Nonetheless, industry research estimates $2.2 billion of those wagers still will translate to the regulated world.
With the infrastructure, deals and popularity all in place, eSports looks ready to blow up, with betting parlours ready to follow suite as always, going with the hot hand in a reaction some might call the most predictable outcome of all.