What's Driving the Rapid Growth of Esports?

11 Dec. 2018

The esports industry is enjoying unprecedented growth at the moment. Marketing researcher Newzoo recently predicted that 2018 revenues will reach a whopping $905 million, which is a 38% increase from 2017, and revenues are projected to reach $1.1 billion, and could reach $1.65 billion by 2021. Also, brand investment is expected to increase 48% year-on-year.

There are four main elements that have contributed to the phenomenal recent growth of esports: streamed competitions involving organised leagues, professional players that can be watched from anywhere in the world, and live events in major sports venue – increasingly, purpose-built esports venues.

The increasing number of venues playing esports, or being built solely for esports tournaments, hs allowed fans to meet each other, and has also massively boosted revenue for esports through ticket sales and additional costs, such as merchandise, memberships and food and drink sales.

As professional esports players gain recognition for their abilities, fans are becoming more invested in individual players. This is starting to reflect traditional sports, where players become celebrity figures and fans become more invested in now only following their careers, but buying merchandise and tuning into more games their favourite players are involved in.

And finally, the fourth component behind the explosion of esports in recent years – one of the biggest drivers overall has been Twitch, the largest livestreaming platform in the US, where spectators from all over the world can watch gamers compete. Twitch has seen phenomenal growth – in 2014, Amazon bought Twitch for almost $1 billion – and allowed spectators to enjoy the sport with no more than a simple wi-fi connection or 4G.

The Twitch platform has massively contributed to more fans becoming interested and engaged in esports. The global esports audience is projected to double in the next three years from 300 million viewers to more than 600 million. This makes it easier for people to watch and get involved in esports.

And it's not only online platforms such as Twitch making way for growing audiences - traditional television is also offering a way for viewers to tune in. In 2016, for example, US broadcasters TBS and ESPN began investing in numerous esports leagues and broadcasting competitions, and reached wider mainstream audiences.

Another factor that will become a bigger driver of growth for esports is the number of educational courses, including degrees, dedicated to esports and driving through the next generation of those who want to work in the industry themselves.

For investors such as Reiwred GG’s own backer Tej Kohli, investments in esports are a way of supporting the future of sports entertainment. The venture backs projects at the cutting edge of esports, with the aim of boosting the growth and professionalisation of the European esports market.

Rewired GG has plenty of expertise behind it, including from Chris Chaney, who has 10 years of experience in the global sports and entertainment industry, and Sam Cooke, the Managing Director of Esports Insider

Find out more about Rewired GG and the rise of esports here.