How Esports soared whilst others faltered

It’s funny to think that back in 2014, then-president of ESPN John Skipper casually dismissed esports by saying “it’s not a sport – it’s a competition.” Comparing esports to checkers, he emphasized that he was “interested in doing real sports”. That point of view was off-base then, and is positively prehistoric now, as the world is increasingly in thrall to epic esports tournaments with multi-million-dollar prize pots. According to new data gathered by digital market consultancy Juniper Research, the global esports industry will be worth $3.5bn by 2025, rising from $2.1bn in 2021. This is money generated by live ticket sales, media broadcasting rates, sponsorship and merch. The Juniper report also predicts that there will be over a billion viewers by 2025, compared to around 800 million by the end of 2021.

So, even if some people out there still think of esports as a niche hobby today, the current rate of global growth means it will be indisputably completely mainstream within a very short space of time. And that begs the question: how much has the industry been helped along by the coronavirus pandemic? After all, while the big esports tournaments like The International were disrupted just like traditional sporting events, the beauty of esports is that real-world viruses can’t infect the action, allowing athletes and their millions of fans to carry on playing and connecting at safe social distances. It also helped keep the sports betting industry going during the darkest days of the pandemic, even inspiring new bettors to try wagering on the likes of DOTA 2 and CS:GO in place of, say, the Olympics or the NBA.

Immediate Impact

As per excerpts from a recent interview with Malte Hegeler, head of product development at iGaming software developer EveryMatrix, the pandemic has seen an unprecedented surge in esports betting. Hegeler explained that, before Covid-19, esports betting trailed way behind wagering on traditional sports like football and tennis. Then came Covid-19 and the shutdown of those sports - “When the lack of events caused punters to switch from real sports to simulation games, we saw esports turnover growing by a factor of 30.”

Games like FIFA and NBA 2K have particularly benefited from the influx of new bettors, according to Hegeler, in what is a reflection of the fact that these games simulate traditional sports, and are therefore more approachable to punters who would be baffled by the complex mechanics of a game like DOTA 2. “A football fan is highly likely to like FIFA and enjoy the fact that the big teams are playing 24/7”, he explained.

Hegeler did go on to explain some differences in consumer behaviour, most notably  that due to the fast-paced nature and complexities associated with competitive gaming (with in-game developments occurring much faster than in traditional sports), live betting holds a 93% share of esports betting figures.

Meanwhile, another prominent industry figure – Quentin Martin, CEO of esports gambling site Luckbox – has also talked about how staggering the surge has been. “All of our key performance indicators have been through the roof in the past three months,” he told Forbes last year. “Turnover has risen to almost 13 times that seen in November 2019, while deposits are up 10x since then.”

The rise in esports betting can be seen as a kind of barometer revealing the overall rise in visibility of esports in the age of the coronavirus. Quentin Martin also told Forbes, “As well as an increase in customers and betting activity, we’ve seen a huge level of interest from potential investors, who are realizing that esports is resilient to many of the forces that affect traditional sports, not least COVD-19 and a potential recession.”

With all this in mind, it should also be said that the esports industry was already trending in this direction before anyone had even heard the word “coronavirus”.

Revenue Boom

Accountancy giant PwC has reported that esports revenues went skywards from $194m in 2014 to $980m in 2019. Other metrics also show how well esports had been doing before the dramatic nudge provided by the pandemic. As revealed by Reviews.org, global tournament payouts hit the $10m mark in 2011, and were way up to almost $250m in 2019. Business interest, too, was on the up and up. Per the financial services company Deloitte, investments in esports reached $4.5 bn in 2018, compared to $490m the previous year – a staggering 837% growth rate. Just as significantly, viewership was booming – according to a study by Green Man Gaming, there was a massive three-fold increase in esports viewers between 2012 and 2019, and a tripling in the number of pro athletes in around the same time frame.

The upshot is that yes, the need to remain socially distanced, coupled with the shutdown of traditional sports, has most certainly accelerated the momentum of esports, bringing new fans and sports bettors into the fold. But any cynics who put the current visibility down to Covid-19 alone, and think it’s a “flash in the pan” situation, should be swayed by those pre-pandemic stats.

More than a quarter of Americans now say they’re more interested in esports than traditional sports – that’s according to a recent survey by Reviews.org, which gives an idea of just how important a force this is. Factor in that more than 170 colleges and universities across the United States now run varsity esports programs, and it’s clear that the distinction between traditional sports and the digital iteration will blur more and more. Already worth billions, with superstar athletes getting lucrative sponsorships and setting trends in fashion and lifestyle, the future belongs to esports.