Virtual sports Driving the content market

Analysts from Research Nestor explore the global virtual sports market’s growth, applications, key players, trends and regional penetration, driven by digital innovation and young demographics – making it a must have content vertical

The virtual sports phenomenon is expanding rapidly, with the global market expected to grow more than fivefold by 2037. The virtual sports industry, initially a niche segment, is experiencing rapid global growth due to a convergence of technological advancements, increasing demand for interactive gaming and expanding accessibility across diverse market.

According to data published by Fantasy Sports & Gaming Association, in 2022 there were 62 million people playing sports in USA and Canada.

Unlike traditional sports, virtual sports leverage high-quality graphics and AI simulations, creating engaging sporting experiences that appeal to a tech-savvy, entertainment-driven audience. But what are the unique drivers behind the industry’s growth, its regional penetration, diverse applications,and trends shaping its future?

EXPANSION PATH

One of the main reasons for the global rise of the virtual sports industry is the widespread adoption of digital technologies and mobile platforms. With internet penetration growing across regions and more consumers using smart-

phones and other mobile devices, virtual sports are becoming accessible to a broader audience. The average internet penetration rate worldwide as of October 2024 was approximately 67%.

Furthermore, these games offer a shorter format compared to traditional sports events, allowing quick, immersive experiences that attract both sports enthusiasts and casual gamers alike. The shift in preferences for on-demand entertainment over traditional sports viewing is also fueling the industry’s growth.

Additionally, the rising popularity of online betting is creating another growth channel for virtual sports. Given that virtual sports events are simulated using computer algorithms, they can be run continuously, offering betting options 24/7. This consistent availability makes virtual sports particularly attractive to online sportsbooks, contributing significantly to the industry’s growth, especially in regions with established sports betting cultures.

REGIONAL PENETRATION

Virtual sports are gaining popularity globally, with Europe leading due to strong betting infrastructure and digital adoption, particularly in the UK, Italy, and Greece.

As per analysis, by 2024, 12.5% of Europeans will be active in the online gambling business.

Also, North America is growing rapidly after loosening sports betting laws, while Asian markets like China and Japan are starting to adopt virtual sports.

Africa is emerging as a key market, fueled by a young, digital population. Virtual football dominates, alongside other games like horse racing, basketball, and tennis, catering to diverse preferences. The worldwide demand for online football games was estimated at USD 1.8 billion in 2023.

HOW AGE AND LIFESTYLE DRIVE THE MARKET

Demographics play a pivotal role in shaping the virtual ports market. Millennials and Gen Z are the primary demographics driving the industry’s growth, as they are more inclined toward digital-first entertainment formats and value experiences that blend gaming with technology. In contrast, the older generation is slower to adopt virtual sports, though some segments are beginning to engage due to ease of access and curiosity.

Some 62% of Gen Z and 66 percent of millennial sports fans stated they would pay to see a

sporting event in real-time from an athlete’s point of view in virtual reality, according to Research Nester analysts.

Furthermore, 65% of millennial sports fans and 59% of Gen Z sports fans stated they would pay to see a sporting event in virtual reality from the seat of their choosing at a venue.

INDUSTRY LANDSCAPE

The virtual sports market features prominent players such as Inspired Entertainment, Playtech, and Betradar, which are investing heavily in innovations to capture market share. Companies are focusing on enhancing realism through advanced AI, graphics, and motion-capture technology, creating more lifelike avatars and environments that mimic real sports events.

For instance, in September 2024, ASICS announced “DISC,” a revolutionary virtual sport for VR and MR, developed with Meta and m ss ng p eces. This innovative initiative redefines Esports as “Borderless Sports,” promoting physical engagement and mental well-being for a new generation of athletes.

Partnerships with online betting platforms, sports leagues, and media companies are also becoming common, allowing virtual sports providers to tap into an established fan base and create hybrid offerings that blend live sports with virtual content.

According to predictions, the Virtual Sports Market size is estimated to reach USD 19.8 billion in 2024 and is expected to exceed US$141.4 billion by the end of 2037. This growth is anticipated

to occur at a compound annual growth rate (CAGR) of over 17.8% during the forecast period from 2025 to 2037.

Additionally, competitive dynamics are intensifying with the entry of tech startups bringing AIdriven simulations and immersive VR-based experiences to the market. This increased competition is driving product differentiation, enhancing quality, and broadening the scope of virtual sports offerings.

Some of the advantages of virtual sports due to which people are adopting them at wider scale are:

• Virtual sports can be played at home and no travelling is needed.

• No restrictions for time

• Level and competition can be opted easily

• Better for skill improvement

• Some prominent virtual sports launched by companies are;

Recently Belgium’s first virtual biathlon championship was conducted and aim to put sport in spotlight. Also, Olympic virtual series for cycling was conducted from 1st to 24th June in 2021.

WHAT’S NEXT FOR VIRTUAL SPORTS?

The virtual sports industry is undergoing several transformative trends. AI and machine learning and enhancing the predictive accuracy of simulations, making virtual games more engaging and competitive.

Augmented reality (AR) and Virtual Reality (VR) are also beginning to reshape to user experience by providing immersive environments that allow users to feel as though they are part of the game.

Furthermore, in some sports, like football, AI models can forecast game results with over 60% accuracy by examining elements

like formations, crucial passes, and goals. The usage of these forecasts for game-day decisions and sports betting is growing. Blockchain technology is another innovation that’s gaining traction, especially in regions with a high interest in cryptocurrency. By using blockchain, companies are able to offer secure, transparent betting and even incorporate NFTs (non-fungible tokens) to allow players to own and trade virtual sports assets. Additionally, as environmental concerns grow,

some companies are developing eco-friendly practices by using cloud gaming and virtual platforms that consume less energy than physical sports infrastructure.

The virtual sports industry demonstrates how digital innovation, consumer behavior, and technology create new entertainment formats. As it gains popularity and expands across markets, the sector is set for growth, appealing to investors and enthusiasts globally.