The pandemic introduced many to esports, from virtual Formula One races to Premier League stars competing on FIFA. This raised questions about the future of esports in global sports and its potential to engage a younger fan base. Some believed Covid-19 would be a defining moment for esports, but as restrictions eased, the industry faced challenges. Non-endemic global brands partnered with competitions and teams, while franchise leagues experienced stagnation and significant losses. Esports, like any industry, has its ups and downs, but the skepticism surrounding its financial forecasts remains.
What did Covid do for esports?
Alex Inglot serves as the ESL Pro League commissioner, overseeing the popular esports competition, Counter-Strike: Global Offensive (CS:GO). The season 12 finals in 2020 attracted approximately 568,000 viewers, while the season 14 finals in 2021 garnered 758,000 viewers. The subsequent season 15 and season 16 finals saw peak audiences of 413,000 and 509,000, respectively. Contrary to initial expectations, the impact of the pandemic on CS:GO viewership proved to be lasting even after the post-Covid correction. The interest and viewership have been sustained, attracting both existing and new fans alike. While quantifying the precise value of the esports market can be challenging, projections indicate it could amount to US$5.74 billion by 2030. However, despite the attention esports received during the lockdown, further advancements may not have materialized as initially anticipated.
What is the current state of affairs?
Six years ago, the Madison Square Garden Company, led by James Dolan, the owner of the New York Knicks and the New York Rangers, ventured into uncharted territory: the professional video game league.
Investing over $10 million in acquiring a majority stake in Counter Logic Gaming, an e-sports team, they expressed optimism about the growth potential of professional video gaming. However, the expected growth did not materialize. As e-sports revenue fell short of expectations and skepticism grew among investors, Madison Square Garden’s owners attempted to exit the business by selling their marquee team.
The economic realities of e-sports in the United States are becoming evident. Unable to turn a profit, team owners are cutting costs by laying off employees, terminating contracts with star players, and even selling their teams, sometimes at a loss. This sobering development challenges the notion that e-sports could be the next big thing in entertainment.
Interest in competitive gaming will continue to grow, as the current state of the industry indicates. There are more and more e-sports leagues and those who are engaged in professional gaming. However, cyber risks are also on the rise, so it is also important to use a VPN. Here is a good VPN for gaming https://veepn.com/vpn-for-gaming/ which is reliable and fast enough for comfortable gaming. All participants in the gaming industry should think about their safety.
Key trends
Branding through esports drives market growth, with sponsored events playing a key role. Successful sponsorships generate new revenue and opportunities, propelling the global esports market. Top sponsors include Twitch, Intel, Adidas AG, Vodafone, The Coca-Cola Co, Mercedes-Benz, and Red Bull Gaming. Esports betting is a rising trend, projected to grow significantly, especially in the US. Lenient betting laws and online/mobile apps contribute to the growth, attracting companies like Betway Group as esports team sponsors.
What is the future of esports?
Branding in esports is a significant driver of market growth. Sponsors play a vital role in this space, with esports events serving as successful branding platforms. Companies can sponsor events, gaining new revenue and opportunities, while promoting their products or brand. Top sponsors include Twitch, Intel, Adidas AG, Vodafone, The Coca-Cola Co, Mercedes-Benz, and Red Bull Gaming. An emerging trend in esports is the rise of esports betting, which is expected to see substantial growth from 2022 to 2027. The US market, in particular, is poised for growth due to flexible betting laws. With the convenience of online transactions and mobile betting apps, betting companies are expected to contribute to further industry expansion. Notably, Betway Group has already become a sponsor for esports teams.
Madison Square Garden sold its e-sports team, Counter Logic Gaming (CLG), as part of an effort to cut losses. However, the company failed to find a buyer that offered sufficient compensation to recover the costs, according to insiders. As an alternative, Madison Square Garden laid off several dozen CLG employees and recently merged its League of Legends team with a different e-sports organization, NRG Esports. Instead of receiving a cash payment, Madison Square Garden paid NRG several million dollars to cover the costs of CLG facilities and the remaining 25 employees’ salaries. Some details of the transaction were previously reported by The Jacob Wolf Report, an e-sports news outlet.
Conclusion
Esports has made considerable progress in recent years. Despite challenges, data indicates encouraging growth projections in this space. With the increasing popularity of video games and platforms like Twitch promoting players to stardom, the momentum behind esports is evident. Many involved in the esports market aspire to elevate the sport to new heights comparable to other major sporting events.
