50 years after the launch of the world’s first video game console, gaming and eSports have evolved into a multibillion-dollar industry. Video games have grown from arcade frivolities limited to one person or a small group, to worldwide competitions played by professionals and watched globally by millions streaming the events on their devices.
The proliferation of high-speed broadband Internet made online connectivity a natural progression for the video game industry. Now, players worldwide could connect and play like never before, thanks to online services on their consoles. Not only did gamers partake – they wanted the option to spectate too; fuelling demand for online live streaming of gameplay.
Similarly, the growing appetite for gaming parallels the demand for eSports. The first eSports competition happened in the early 1970s, with more contests happening in the 1980s with popular arcade games like Pac-Man. The global availability of online gaming has transformed the competitive gaming niche into a mainstream experience. In 2020, more people watched eSports competitions than the USA’s National Basketball Association games. eSports have grown into a global industry; filling stadiums of dedicated fans and catching the attention of brand sponsors and aspiring professional games.
COVID-19 only accelerated eSports growth in popularity. When many were stuck at home and professional sports leagues cancelled games, eSports filled the void of spectator sports and allowed players to join in from the comfort of their homes. The same goes for games streaming. Indeed, the growth of games streaming is an inevitable by-product of COVID-19’s social restrictions. We therefore foresee the broadening of games streaming merging with other facets of the entertainment industry.
eSports is a nascent industry, compared to more traditional and established sports. However, its emergence as an alternative to suspended sports leagues during the COVID-19 pandemic gives eSports stakeholders a more prominent platform to create additional revenue through innovative services and products. There have been significant prize pools for high-profile eSports tournaments, which in turn must be funded by revenue attained via viewership. We believe that the development of these eSports tournaments is largely dependent on two factors: an increase both in viewership by enticing new viewers to the platform (something that will be accomplished by creating content that leverages the most popular aspects of mobile gaming), and in the average spend per user either via subscriptions or PPV (pay-per-view) models.
Games streaming has quickly become a popular form of entertainment, with the rise of dedicated platforms created to host this kind of content. In particular, audiences flock to gaming content creators streaming live gameplay direct to online platforms. The growth of streaming audiences is a potential avenue to generate revenue for game publishers and other companies within the gaming ecosystem. However, as sites like Twitch and Facebook Gaming begin to diversify their content, competition is rising between these platforms, as they compete for the attention of influential content creators.
In turn, these streaming platform providers must promote their content to new audiences. Aligning eSports events with other industries, such as entertainment industries, will provide these streaming platforms with opportunities to attract new users.
Our latest whitepaper, What to Expect from eSports in 2021, explores the current eSports and games streaming landscape highlighting new market trends and challenges.
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