18 November, 2019 | By Anzu
With thriving viewership and revenues, esports has scaled to new heights, transforming both traditional sports and video games industry. 2019 can be called a watershed year in the history of esports as more and more companies took notice of this medium. Esports emerged as a popular channel for even unlikely players like WeWork that has plans to capitalize and enter into gaming-related events.
As we come close to the end of an exciting year in gaming and esports, we take a look at some interesting statistics from a recent survey conducted by Foley and Lardner LLP and The Esports Observer that shows “insiders are bullish” about the prospects of the esports industry. The survey was conducted among 200 executives from esports and traditional professional sports teams and leagues, media companies, agencies and industry consultants.
Here’s a roundup of the most eye-catching trends from the report:
U.S., China and India to Lead Investment Opportunities in Esports
Investment in esports is growing and the industry will continue to stay bullish as U.S, China and India offer promising opportunities over the next five years. There has been an increase in the investment in esports from private equity and venture capital firms. As many as 47% of the respondents expect an increased investment from these groups, signaling that esports is emerging as a sector “that’s maturing and becoming attractive to more investors looking for big paydays.” Now that several funds are tied to esports, the investment space is getting heated up and will lead to further sophistication of the industry.
Advertising and Sponsorship Drive Revenue Growth
The survey asked the respondents to rank the area that will account for the greatest and the least amount of growth of the esports industry (Rank 1-5 represented highest to lowest). Advertising and sponsorship emerge as clear favorites and are expected to drive revenue growth, followed by in-game purchases and media rights. It’s interesting to note the favorable rise in perception of advertising in esports. Although advertising in the form of traditional ads in arenas has existed, but scalable digital advertising will make it attractive for brands to benefit from the young audience who is moving away from traditional sports. “The jump from 41% in 2018 to 51% in 2019 reflects the growing involvement of both endemic and non-endemic brands,” cites the report.
Increased M&A Would Lead to Consolidation in Esports
As with any growing industry, esports is likely to witness an increased M&A activity across categories, most notably streaming and broadcasting; events and tournaments; and franchised teams. “Video game live streaming platforms are in fierce competition over market share, and with the biggest players backed by multinational corporations (e.g., Amazon-backed Twitch, Microsoft-backed Mixer and Tencent-backed Huya and Douyu), surviving in this market is difficult without sufficient backing,” the report says. As the industry grows, a further consolidation of the sector would drastically shape the sector in the coming years.
Cheating, Match-Fixing Remain Grave Concern in Esports
As the esports industry continues to grow, risks around practices such as cheating and match-fixing pose a threat. Inadequate fraud detection and vulnerability to technology hacks remain the biggest cause of worry. However, as the industry matures, we believe that there will be stricter policies and implementation to fight these, which would ultimately lead to further sophistication of players in the market.
You can access the complete survey here
Mobile, Tablets, and Advanced Technologies Will Impact Esports Growth
Advanced technologies is likely to improve esports as respondents feel these could be used to analyze matches for performance, measure audience engagement, as well as measure marketing and branding initiatives. Respondents also said that they feel mobile and tablets version of esports could fuel growth of esports as mobile adoption continues to shape user content consumption.
. Where do you think the biggest growth opportunities for esports lie as we move to 2020?
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Anzu.io is an in-game advertising platform that brings real-world brand ads to video gaming and esports. Backed by BITKRAFT Esports Ventures, WPP, and Axel Springer Digital Ventures, Anzu redefines digital advertising through seamless integration of non-intrusive ads into the gameplay. Bringing real-time data and programmatic to the video gaming world, the platform promises native advertising, brand safety and ad viewability. Follow Anzu on
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