Gaming Inc: The business of E-Sports

Summary

eSports has rapidly grown into a global powerhouse, attracting major investments from celebrities, sports teams, and businesses. With massive viewership numbers surpassing traditional sports finals, it offers huge prize pools and lucrative sponsorship opportunities. The accessibility of eSports, with global participation from home, and the rise of university and high school leagues make it a truly inclusive sport. As game publishers, teams, and even real estate ventures invest in the eSports ecosystem, the industry continues to expand. By 2022, eSports is projected to have a global audience of over 600 million, offering endless potential for fans and investors alike.

Takeaways

• 😀 eSports has gained massive investment from celebrities and sports figures like Michael Jordan, Shaquille O'Neal, Drake, and major brands like Amazon and Adidas.
• 😀 eSports tournaments attract millions of viewers, surpassing traditional sports like the Stanley Cup, NBA Finals, and Wimbledon, with the League of Legends Championship reaching 99 million viewers.
• 😀 The prize pools for eSports tournaments are enormous, with games like Fortnite offering $100 million in total prize money for the year, and the International Dota 2 Championship offering $30 million.
• 😀 Universities are heavily investing in eSports, with scholarships for players and dedicated leagues, showing how eSports is becoming integrated into education.
• 😀 The accessibility of eSports, where anyone can compete regardless of physical limitations, is a key factor in its popularity compared to traditional sports.
• 😀 eSports teams are highly profitable, with top teams earning millions from sponsorships, prize money, and merchandise sales, with some teams valued at up to $310 million.
• 😀 Major sports franchises are entering the eSports space, with clubs from the Premier League, Formula 1, and MLB establishing eSports teams.
• 😀 Investors are increasingly backing eSports teams and companies, with notable figures like Magic Johnson, Steve Case, and Peter Guber investing in the space.
• 😀 Game developers like Activision Blizzard, EA, and Riot Games are central to the eSports ecosystem, making money from franchise sales, broadcasting deals, and in-game purchases.
• 😀 eSports real estate is growing with venues like eSports bars, hotels, and dedicated arenas, offering a space for fans and players to experience the sport in person.
• 😀 The global reach of eSports is expanding rapidly, with a projected 645 million viewers by 2022, which is expected to be nearly double the population of the United States.

Q & A

What do Michael Jordan, Shaquille O'Neal, Drake, and FC Schalke have in common?

They have all invested in esports, signaling its growing appeal across diverse industries.

How do the viewership numbers of esports tournaments compare to traditional sports?

Esports tournaments, like the League of Legends Championship, often surpass traditional sports events in viewership. For example, the League of Legends Finals had 99 million viewers, while the Stanley Cup Finals had 8.7 million viewers.

What is the prize pool for The International Dota 2 Championships, and how does it compare to the NBA Championship?

The prize pool for The International Dota 2 Championships is $30 million, which exceeds the $22 million prize pool for the NBA Championship.

How has the esports industry grown in terms of sponsorship and media deals?

Esports has seen an influx of sponsorships from major brands like Adidas, Coca-Cola, and Domino's, along with media deals such as ESPN's multi-year agreement to cover the Overwatch League.

Why is esports considered more accessible than traditional sports?

Esports is accessible because it doesn't require physical space or specific body types, making it easier for more people to participate. A game like Fortnite saw 40 million players trying to qualify for its World Cup.

What are some examples of universities integrating esports into their systems?

Many universities are creating esports teams and leagues, offering scholarships to students who compete. There are also growing competitions at the high school level.

How are esports teams generating revenue?

Esports teams generate revenue through prize money, sponsorship deals, streaming, merchandise sales, content creation, and hosting events.

What role do game publishers like Activision Blizzard and Riot Games play in esports?

Game publishers own the rights to esports leagues and make money through broadcasting deals, franchise sales, media rights, in-game purchases, and licensing their games to external organizers.

What is the significance of esports real estate investments?

Esports real estate investments include gaming arenas, hotels, and bars designed specifically for esports fans and players, providing spaces for tournaments and casual gaming experiences.

How have individual esports streamers capitalized on their popularity?

Streamers like Ninja have signed lucrative sponsorship deals with brands like Red Bull, Uber, and Samsung, earning millions of dollars per month through streaming and brand partnerships.