The global sports market was estimated at around $517 billion in 2019. The market is expected to grow to $614 billion by 2022 at an annual growth rate of nearly 6%. Between 2018 and 2022, the growing popularity of esports events is expected to drive the global sports market. eSport or competitive video gaming is a multiplayer video game played competitively for spectators, typically by professional gamers. In 2017, the International Olympic Committee (IOC) declared esports to be considered as a sporting activity. In 2017, global eSport revenues reached $696 million, and they are expected to more than double by 2020, reaching $1.5 billion.
Esports is a form of competition using video games such as Counter Strike, Rocket League and Gears of War. Increase in internet connectivity in early 2000s and emergence of number of esports organizations resulted in the growth and development of the esports sector. In the early 2000s, the launch of organizations such as World Cyber Games (WCG) and Electronic Sports World Cup boosted the growth of the esports industry. The development of esports was also supported by promoting organizations such as Major League Gaming (MLG), aiming at promoting video games at a global scale, thus making esports popular. With the emergence of cheap and fast internet accessible to people from the middle and low classes, the entry barriers for esports’ players became low, mainly requiring investments in a gaming system, legal version of a game, and non-monetary investment in gaming training. These factors supported the development of the esports industry worldwide, thus contributing to the global sports market size.
The esports market is also gaining traction among the sports industry’s end users. Esports involve competitive video gaming tournaments at professional levels. Companies involved in esports generate revenues from sponsorships, advertising, media rights, game publisher fees and tickets/merchandise. An inflow of investors around the globe leads to steady growth of the industry attracting new players laying footfalls in the emerging industry of esports. For example, in 2013, Samsung acquired its own esports team to lay a footfall in the emerging industry. Similarly, in 2016, Philadelphia 76ers NBA team acquired its own esports team entering the esports market. NASCAR and Formula E have also planned to develop esports competitors to capitalize on the growing opportunities provided by the esports industry.
Going forward, the diversity of game genres, geographic expansion of leagues, ownership of media rights, and regulations of competitions will shape the future of the esports industry. Focusing on different genres of games will boost the growth of the revenues of the esports industry. In 2018, Blizzard announced the launch of the first-person shooter series called “Call of Duty”. A different genre game based on mobile MOBA Vainglory was held in Korea in 2018. Increased marketing spending to gain a high number of viewers around the world is further expected to support the growth of the esports market.