Short for electronic sports, eSports describe the sports where multiple players can play competitively against each other on electronic platforms. Watching eSports is similar to watching an expert sporting event. The main difference is that instead of watching a physical event, you get to watch the sports in form of a video game in a virtual environment. Punters can also make money by placing bets on the team they think will win on platforms like GGBet. Over the years, eSports have recorded major growth to an extent that they have become a popular business option among investors. If you are looking for a new investment channel, you may want to consider putting your money in eSports. Check out some of the reasons you should invest in eSports.
How eSports Make Money
Before tackling the reasons to invest in the industry, it is prudent to talk about how eSports make money so that you know what you will be getting into. eSports companies make money through several avenues, including:
- Broadcast licensing deals
- Live-even ticket sales
- Media rights, etc.
The above explains how investors can profit from a business founded on audiences watching gamers play video games. Let’s now jump into the top reasons to invest in eSports.
Huge Growth Potential
Based on how the eSports industry has been growing over the years, it is predicted that this is a trend that will not stop anytime soon. According to Statista, the video game market in the UK was worth 5.3 billion British pounds in 2020. By 2024, the figure is expected to grow up to about 7 billion. Brands are also injecting revenue into eSports which goes to show that this is a phenomenal market that can offer great value to investors.
Prizes, Sponsorships, and Celebrity Endorsement
One of the main reasons eSports became so popular is the size of the prize money they offer, which accounts for millions of pounds/dollars/euros. Tournaments are usually hosted all over the globe with paid streams, television contracts, and teams traveling from different parts of the world. Significant prizes attract top talent, which normally leads to better viewership as well as more interest not only from the media but neutral spectators as well. The prizes may continue to grow a movement that can take eSports to the next level. Many celebrities have also invested in the eSports industry, something that can motivate you to invest in the industry. Examples of celebrities who have invested in this fast-growing industry include Michael Jordan, Drake, Ronaldo, Mike Tyson, David Beckham, Will Smith, and Kevin Durant, to mention a few.
High User Engagement
Many people spend multiple hours a day watching video games. A survey revealed that gaming enthusiasts spend at least six hours weekly on average while being engaged with a game. This goes to show that the niche has the potential to genuinely engage users. In addition to this, eSports games attract a global audience. As long as a person has a good internet connection, they can connect to the games they like without any restrictions, obligations, or boundaries.
Potential to Monetize
Currently, eSports fans are largely under-monetized. The average Esports fan spends between $3-$5 compared to over $35-$85 per fan for traditional sports like football, hockey, and basketball. eSports monetization is a bit challenging across the globe, thanks to the ubiquity of free gaming video content as well as round-the-clock access to streaming. This said, there is empirical proof that fans do not mind spending on premium experiences. For instance, Gen Z and millennial gamers spend between $51- $53 on average monthly for streaming channel subscriptions and donations. This is an indication that monetization is an opportunity that is ready to be explored.
Community and Legitimization of eSports
The eSports community is at the pillar of the industry’s success. The infectious enthusiasm from the fans is elevating the industry. eSports Universe can attest to this. It is one of the companies that is leading a community of thousands of people and hosting many small tournaments between players who are looking to become professionals in the future. Mainstream media coverage of eSports has also been high especially during the pandemic. BBC has covered the League of Legends UK Championship. Negative eSports perception, which has been a huge barrier to the sector, is fast disappearing, opening up the potential for new opportunities and audiences.
There is no better time to invest in eSports. The market is not only stable and low-risk, but it also has the proper growth parameters making it a worthwhile investment.