Exploring the Esports Ecosystem

Exploring the Esports Ecosystem

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by John David Hartigan | Jun 16, 2022 | Business, John David Hartigan, Sports

As competitive video games continue to become part of pop culture, investors, brands, media outlets, and consumers worldwide are all monitoring esports and its rise to popularity.

Experts estimate that there will be approximately 29.6 million monthly esports viewers in the US this year alone. The catalyst for this shift has been from celebrities like Michael Jordan, Drake, and Marshmello. Moreover, there has been increasing coverage from traditional media outlets like ESPN and platforms such as Fortnite.

Esports Industry Market Growth Trends According to Insider estimates, there will be 29.6 million monthly esports viewers in 2022, up 11.5% from 2021. The pop-culturization of esports has helped power the explosions in esports investment and revenue. Esports have hit this stratosphere primarily because of live streaming and gaming

popularity on platforms like Twitch and Youtube Gaming. Social media platforms give fans a direct connection to the players and teams. Speci몭c esports brands, like FaZe Clan, are also moving rapidly into areas like merchandise, lending their brand more notoriety.

It’s essential to think of esports as an ecosystem of gaming, social media, popular culture, and e-commerce as it shines a light on opportunities beyond gaming events alone.

Esports Industry Revenue The industry has seen a massive uptick in investment from venture capitalists and, more recently, from private equity 몭rms. These investments are distributed to players across the esports ecosystem—from organizations to tournament operators to broadcasters—allowing it to run e몭ciently and thrive. The esports rise to mainstream culture has helped power its investment trends and revenue increase. The result is that esports has matured from its roots as simple gaming to the complex digital ecosystem that it is now.

Esports Teams and Advertising Like traditional sports, esports teams have owners, franchises, endorsement deals, and cash prizes from tournament winnings that contribute to their annual revenue and overall valuation. When the pandemic subsides, esports leagues will likely resume their e몭orts to expand their reach by hosting live gameplay with regional esports teams that will more closely resemble traditional sports leagues.

Understanding the Esports Ecosystem

Most projections put the esports ecosystem on track to surpass $1 billion in revenue for the 몭rst time in 2022. And from here, revenue is expected to grow and hit $1.8 billion by the end of 2022. Money 몭ows into esports through media rights, live event ticket sales, merchandise sales, and in-game purchases. Still, most of the revenue (69%) comes from sponsorships and advertising, per Newzoo 몭gures cited by Statista.

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