ESPORTS MARKET ANALYSIS

Esports Market Size and Trends

The global esports market is estimated to be valued at US$ 2.88 Bn in 2024 and is expected to reach US$ 10.94 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 21% from 2024 to 2031.

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The esports market has seen significant growth in the past few years. Factors such as increasing popularity of video games and growing popularity of esports competitions viewed as entertainment have been driving the market growth. Live video streaming platforms and sponsorships from major brands and companies have further accelerated market revenues. Growing Millennials and GenZ population who are natives to gaming and technology along with rising internet and smartphone penetration globally are expected to push the market revenues upwards in the coming years. Major online streaming platforms are investing heavily in tournaments and league championships. If this trend continues, the esports industry is poised to become one of the most popular forms of entertainment globally.

Emergence of streaming platforms

The emergence and steady rise of new streaming platforms has been a major driver for the growth of the global esports market. Various video streaming services such as Twitch, YouTube, Facebook Gaming, and others have come up in the last few years which has made esports streaming and viewing widely accessible. These platforms allow both amateurs and professional players to stream their gameplay and tournaments live for anyone to watch for free or through paid subscriptions. Viewers around the world can now easily tune into their favorite esports’ athletes and events without any geographical restrictions.

This has helped tremendously in popularizing esports on a global scale. More viewers are getting exposed to esports through live streaming and it is generating a lot of interest among young populations who want to try their skills in gaming as well. It has given professional players a way to monetize their skills and talents through subscriptions, donations and advertisement revenues on these platforms. Leagues and tournament organizers are also leveraging streaming to broadcast all the action live for virtual audiences and generate greater revenues through sponsorship deals. Overall, video streaming services have become the leading distribution platform and primary window for esports viewership worldwide. Their round the clock availability coupled with high quality production value is translating viewers into die-hard esports fans leading to sustained market growth.

For instance, in February 2023, Nvidia and Microsoft formed a strategic partnership to bring Xbox PC games to Nvidia's GeForce Now cloud gaming platform. This collaboration allows Microsoft to expand its cloud gaming offerings by streaming Activision Blizzard titles, including popular games, through Nvidia's GeForce Now service.

Market Concentration and Competitive Landscape

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Expanding prize pools and sponsorships

The unprecedented rise in prize pools and monetary support from sponsors is another leading driver propelling the global esports industry forward at a rapid pace. Mega esports tournaments like The International Dota 2 Championships and League of Legends World Championships now feature prize pools exceeding tens of millions of dollars each year crowdfunded entirely by fans. Such astronomically high prize pools have elevated esports to another level in terms of legitimacy, prestige, and attraction for top tier pro-gamers. They are lured towards grinding long hours of practice and tournament participation as winning a single championship can potentially set them up financially for life.

Alongside, blue-chip companies from diverse industries like automobiles, consumer electronics, beverages, etc. are aggressively pumping millions of dollars in multi-year sponsorship deals with esports leagues, teams and events. They view esports as the ideal platform to reach younger, digitally savvy demographics in a highly engaging format. Sponsors are also getting exceptional returns through long term brand engagement, increased sales, and dedicated fan following generated through their involvement. 

Key Takeaways from Analyst:

The global esports market continues to grow at a rapid pace driven by increasing popularity of video games and viewership of esports tournaments worldwide. The engagement of younger generations with competitive gaming and live streaming is a key driver for revenues generated through media rights, tickets and merchandise.

Limited monetization opportunities for non-endemic brands and lack of standardized career pathways for professional gamers remain obstacles to realizing the market's full potential. Publishers still capture the majority of value created versus esports organizations and player communities. Regulatory issues surrounding gambling and underage viewership pose compliance challenges as well.

Looking ahead, the rise of cloud gaming and 5G rollout could further boost viewership by allowing seamless watching of high-quality esports content on any connected device. Partnerships between leagues, teams, and media companies will be important to unlock newer revenue streams from media rights and subscription services. Successful long-term monetization will depend on balancing the interests of all stakeholders in the evolving esports market.

Market Challenges: Health concerns associated with esports due to long gaming hours

Health concerns due to long gaming hours is one of the major factors restraining the growth of global esports market. Playing games competitively at professional level requires extensive practice for several hours daily which can potentially harm the health of players both physically and mentally. Esports players have to train their bodies and mind through repetitive intensive training just like conventional athletes which puts immense strain on them. Long working hours in front of displays coupled with lack of physical activity can increase the risks of health issues like obesity, diabetes, cardiovascular diseases, muscle and skeletal problems, eyestrain and fatigue in players.

Prolonged gaming also poses severe mental health risks like depression, anxiety, cognitive impairments, addiction and social isolation in esports athletes. The high stress and pressure to perform in tournaments can negatively impact their psychological well-being.

Market Opportunities: Scope for incorporating virtual reality and Blockchain technologies in esports

Esports has seen tremendous growth in recent years and has emerged as a billion-dollar global industry. With increasing popularity among both spectators and participants, especially among the younger generations, the esports market is poised to further expand in the coming years. Virtual reality and Blockchain technologies can play a pivotal role in propelling this growth trajectory.

Virtual Reality offers the ability to immerse viewers into the gameplay like never before. It can provide a first-person perspective and match the experience of being on the virtual field. This would take spectating engagement to an all-new interactive level. Players can also leverage VR for sophisticated trainings and skill development. On the other hand, Blockchain can help address various challenges related to fraud, payments, and ownership rights. It allows creation of unique digital assets and proof of ownership through non-fungible tokens (NFTs). This opens up new revenue streams through asset monetization, sponsorships and secondary markets. It brings transparency to results, rankings and payments to players.

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Insights By Revenue Source: Media rights contributes the highest share of the market owing to viewer interest in top esports tournaments and leagues

The media rights segment in the global esports market has seen substantial growth over the past few years. The segment is expected to hold 34.4% of the market share in 2024. A major factor driving this can be attributed to the rising popularity of esports viewership on online streaming platforms. Top-tier tournaments and leagues featuring prolific teams and players have been able to attract large audiences who tune in via live streaming to catch the action. This has made media rights very valuable for broadcasters and streaming services.

As the esports viewer base continues to expand globally with more mainstream acceptance, leading esporting organizations are able to command higher media fees for tournaments and league broadcasts. Popular titles like DOTA 2, League of Legends, CS: GO, Overwatch, etc. see millions of concurrent viewers for their signature events, creating a huge demand in the media rights sector. Top streaming platforms offer lucrative broadcast deals and exclusive streaming contracts for premium inventory, fueling high revenues.

Regional expansion of tournaments and viewership growth have opened new opportunities as well. Cultural influences and dedicated fan followings in Asia Pacific and other scenes provide greater potential for media companies. Localization of broadcasts through commentary and production value addition helps boost engagement further. The evolution of high-quality immersive co-streaming options is also augmenting how fans experience and drive interest in esports media consumption.

With esports’ ascendance in popular culture and the ability to reach wider audience demographics easily through digital formats, media rights are expected to remain a major driver of monetization in the industry for the foreseeable future.

Regional Insights

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North America has established itself as the dominant region in the global esports market. The region is expected to account for 38.2% of the market share in 2024. The U.S., in particular, hosts several top professional esports leagues and tournaments. Major gaming publishers like Activision Blizzard and Take-Two Interactive are headquartered in the U.S., giving the region a clear edge in content creation and infrastructure development. Collegiate esports programs are also growing rapidly across American universities, helping cultivate new talent as well as wider audience engagement. With strong corporate sponsorship and investment pouring in, North American teams have traditionally dominated international competitions. The size and sophistication of the regional streaming and live event industry further cement North America's leadership in modern esports.

Meanwhile, the Asia Pacific region has emerged as the highest growth market globally. Countries like China, South Korea, and Japan have very vibrant domestic esports cultures with sizable endemic audiences. Traditional sports like fighting games have found new enthusiasts transitioning to competitive gaming. Grassroots esports organizations covering multiple cities have helped professionalize the space, aided by increasing internet speeds and affordability of devices across Southeast Asia. Local game developers also tailor experiences for regional preferences, providing specialized content. Rising income levels are bringing in new audiences and spend categories beyond hardware, streaming, and live events. With continued economic expansion and mainstream acceptance, Asia Pacific will play a crucial role shaping the future of esports on the global stage in the coming years.

Market Report Scope

Esports Industry News

• In April 2022, Nodwin Gaming, a games and esports company, partnered with game developer Gameloft to organize and execute esports events in India based on the Asphalt Racing intellectual property (IP).
• In April 2022, the Korean Esports Association (KeSPA) inked a three-year sponsorship agreement with SK Telecom, solidifying SK Telecom as an official sponsor of KeSPA and enabling the training of the Korean esports team for upcoming Asian games.
• In March 2022, Rooter Sports Technologies Private Limited secured the media rights for all intellectual properties (IPs) owned by Sky Esports, the leading esports tournament organizer in South Asia, for a duration of one year. This acquisition empowers Rooter Sports to stream Sky Esports' competitions across India in multiple languages, including English, Hindi, Bengali, Kannada, Tamil, Malayalam, and Telugu, further expanding the reach and accessibility of esports content in the region.
• In March 2022, the Esports Federation of India (ESFI) will host the National Esports Championships 2022 (NESC2022) as part of the "AESF Road to Asian Games" initiative. The purpose of this event is to select the Indian representation for the upcoming Asian Games.

*Definition: The global esports market involves the competitive video gaming industry that generates billions of dollars worldwide every year. It includes professional competitions like tournaments and leagues where teams and individuals compete and earn prize money. It also encompasses the viewers who watch esports events online and in stadiums, as well as sponsorships from food, beverage, technology and other brands. The global esports economy is rapidly growing each year as the popularity of video games and online streaming continues to increase on a global scale.

Market Segmentation

• Revenue Source Insights (Revenue, US$ Bn, 2019 - 2031)
  • Sponsorship
  • Advertising
  • Merchandise & Tickets
  • Publisher Fees
  • Media Rights
  • Others
• Regional Insights (Revenue, US$ Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • South Africa
    • Rest of Middle East & Africa
• Key Players Insights
  • Activision Blizzard Inc.
  • Amazon.com Inc.
  • Alphabet Inc.
  • Capcom Co Ltd
  • Electronic Arts Inc.
  • Envy Gaming LLC
  • Epic Games Inc.
  • Esports Entertainment Group Inc
  • Gfinity Plc
  • Gameloft SE
  • HTC Corp
  • Intel Corp
  • Meta Platforms Inc
  • Modern Times Group MTG AB
  • NVIDIA Corp