Blockchain, Jordan and Generation Z: Why the Global eSports Market is Set to Explode

- December 30th, 2018

The global eSports market is facing exponential growth as more and more trends contribute to the industry.

The global eSports market is just one of the technology market segments influencing the entertainment space.

Like so many technological trends of the last couple of decades, millennials are once again disrupting traditional markets and institutions. This time in the sports industry. While there is some debate on whether ‘eSports’, or professional competitive gaming, is really worthy of its name, the market is growing. As Jimmy Kimmel found out in 2015, eSports should not be dismissed. It is now a serious global phenomenon.

In February 2018, Canadian Sasha “Scarlett” Hostyn won the South Korean IEM PyeongChang 2018 Star Craft II Tournament. The event was put on as a precursor to the Olympic Games in South Korea to recognize a growing eSports audience. It is certainly a taste of things to come. eSports will be a medal event at the 2020 Asian Games and could even come to the Olympic Games in the coming decade. While eSports is already firmly established in many Asian countries like South Korea, it is now entering the mainstream in North America.

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How did this come about? In the last two decades, gaming has entered many facets of our digital society. Everything from social media platforms, smartphone apps, and even education and jobsite training. Electronic games are everywhere and widely available globally. It is no surprise that mass viewing of single and multi-player electronic games has become a big business.

The global eSports market

While multi-player competition has been a key element of electronic games for decades, eSports takes it to a whole new level, generating major new sources of revenue for marketers and advertisers. World-wide gaming is expected to top $144 billion in 2018, with eSports growth statistics showing $1 billion in the near future. Though that is paltry compared to revenue generated by traditional sports leagues like the National Football League (NFL), National Basketball League (NBA) and Major League Baseball (MLB), eSports seems to offer much greater revenue growth potential that traditional sports leagues.

The global audience for eSports is estimated to be roughly 380 million people and is likely to increase rapidly in the coming years. Deloitte anticipates that eSports could generate $1.5 billion in revenue by 2020 with a global audience of roughly 600 million people. Currently, there are roughly 2.2 billion gamers globally. That is a lot of room for growth.

The prizes for eSports tournaments are also increasing. The 2018 DOTA 2 championship has a prize pool of over $25 million. In 2012, the same tournament paid out just $1.6 million. In May 2018, Epic Games announced a staggering $100 million for Fortnite tournaments over the course of the 2018-2019 season.

With increasing prize money comes increasing player paycheques. It is not uncommon for Top 100 players to earn millions of dollars from tournaments alone. Then there is money from endorsement deals, event appearances and other forms of revenue and perks that are typically enjoyed by professional athletes. The highest paid eSports players tend to range from 17 to 26 years old.

Keep in mind that eSports may not just be for young audiences as older generations may hop on board as well. There was a time where social media was predominantly comprised of Generation Ys. Social media sites like Facebook were originally designed for young people in high school and university to connect and share experiences. Older audiences may catch on to eSports in the same way they have embraced certain social media platforms.

Traditional sports institutions are embracing eSports

In late October 2018, Nike announced League of Legends star Jian ‘Uzi’ Zihao will appear alongside Lebron James in an upcoming marketing campaign. The significance of this cannot be understated. It highlights the growing influence of eSports in traditional sports institutions. Many current and retired professional athletes are even entering the fray.

Toronto Maple Leafs forward Zach Hymen recently announced plans to launch E11, an eSports company. NBA legend Michael Jordan announced that he is an investor in aXiomatic, a major eSports group that owns the Team Liquid franchise. There are also plans for MLB to partner with eSports event organizer UMG to put on Fortnite tournaments for active and retired baseball players.

Similar announcements are likely to happen in the coming months. After all, the world of sport is a business like any other and it needs to evolve to maintain competitiveness and profitability. This new eSports trend allows traditional sports institutions and players to stay relevant. It also connects them directly with younger audiences. It seems many star athletes, franchise owners, advertisers, league managers and broadcasters have vested interests to enter this new market.

eSports and blockchain

Spin-off industries typically form when a new market reaches a certain scale. Likewise, innovators are wasting no time coming up with solutions for the future eSports market. One opportunity that investors should pay attention to is the use of blockchain technology in entertainment and gambling platforms. They allow users, in part, to earn rewards for engaging and competing in their platforms. Suffice it to say the following three companies are not the only companies striving to capture this market share.

Fandom Sports Media (CSE:FDM,OTCQB:FDMSF,FWB:TQ42) will launch its sports entertainment platform at the Consumer Electronics Show CES 2019 on January 10, 2019 with the aim to aggregate, produce and curate unique fan-focused sports content regarding game play. The FANDOM SPORTS App allows users to connect and earn FANCOINS are used to buy tickets to Pick A Fight. Talk Trash. Get Rewarded. Winners will have access to exclusive content and In-Real-Life experiences (FANDOM IRL.)

Unikrn is a gambling platform that recently received wagering licence approval on the Isle of Man in the United Kingdom. The company is now rolling out online products to eSports enthusiasts in 20 countries mostly in Europe, Asia and Latin America. The platform is not yet available in the United States.

In September 2018, Bountie officially launched an initial coin offering, which allows the company to sell its underlying crypto currency in exchange for other crypto currencies (like bitcoin or ether).

Takeaway

It would not be surprising to see highlights of League of Legends, Dota II or Fortnite on TVs of local sports bars in the coming years as esport enters the mainstream. Growth in eSports is centered on the mass market for electronic games that are seemingly everywhere and played by nearly everyone in our digital society. That growth appears to be global in nature and could see sustained interest not just from millennials, but older generations as well. Investors should also be keen on spin-off industries that emerge from large growing markets like eSports.

This INNspired article is sponsored by FANDOM SPORTS Media (CSE:FDM,OTCQB:FDMSF,FWB:TQ42). This article was written according to INN editorial standards to educate investors. 

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