2019 League of Legends World Championship finals at AccorHotels Arena, Paris

The serious business of esports: How the market has grown and what it means for tech brands

Regardless of how much you or your business is directly involved in esports, the chances are you’ve heard the tech industry bang on about the growing sector for a fair few years now. Looking back just five years, PCR was covering the news that London was about to get a 600-seat esports venue, we spoke about how this new “sport” was an interesting area for gaming brands to keep an eye on, and mused over the possible marketing opportunities.

Seemingly not long after, events were taking place at Wembley Arena, prize money was creeping up in size along with audience figures, and before we knew it, reports were saying that tech brands were planning to invest over £200 million into esports throughout 2016.

Since then, there have been fears that the bubble was on the brink of bursting. But what do the stats indicate today? Well,
there were approximately 380 million esports viewers in 2018, and that’s expected to surge to roughly 557 million viewers by 2021, according to a report from Newzoo. And Goldman Sachs reports that total esports revenues reached $869 million in 2018, and is forecast to more than triple by 2022.

Parimatch is an international online betting and technology company which focuses heavily on the esports category. As one of the first operators to identify the opportunity to bet on cybersport events, PCR asked Stepan Shulga, head of esports for Parimatch, about how the company has embraced this market.

“We sponsor several esports clubs, including Virtus.Pro, the most successful and popular esports team in the field, and we also partner with esports content creators and high-quality video game providers such as DOTA2,” says Shulga.

“We recently teamed up with ESforce Holding to host the DOTA2 Parimatch League Season One. The tournament, which had a prize pool of $75,000, provided the opportunity for young players to make a name for themselves – and we’re currently in preparation for the second season. It is complicated and expensive to organise your own tournament for traditional sports, but with esports, it’s much more accessible.”

From a gaming brand perspective, GIGABYTE is one such company that has been heavily involved in the esports market for many years, sponsoring some top esports teams, such as G2. The brand also participates in most of the significant gaming events across the world, such as PAX, PAX East, China Joy, Gamescom, Paris Games Week, Barcelona Games World, BGS and more, and is actively helping to grow the esports community by getting involved at all levels.

“Gigabyte has dedicated itself to manufacturing high-quality and innovative PC components for over 30 years and our products are used in a wide-range of branded PCs. We began by focusing on PC power users, who mod their own desktops and play games. We have a very strong technical background when it comes to designing motherboard and graphics cards with the performance to satisfy these power users, and this is something we’re proud of,” explains Steven Chen, VP of GIGABYTE Mobile Business Center.

“Apart from PC components for gamers and power users, we have also been in the laptop business for 10 years, also targeting gamers and creators who demand high performance hardware.”

So what’s the most exciting thing in esports right now? Chen says it’s that gaming is no longer just a hobby, but a major industry with a passionate community.

“In 2019, top esports star Johan Sundstein from Norway, won around $6.89 million competing in a major DOTA2 tournament,” he tells PCR. “The high prize value encourages players to treat competitive gaming as a profession, and it has revolutionised the whole gaming industry, spawning bigger and better gaming events with more viewers and engagement.

“People watch streams of gaming tournaments in the same way as they watch conventional professional sports. This in turn makes the community care about the hardware the top stars use to compete and win.”

Parimatch’s Shulga agrees that esports is one the fastest growing sports in the world right now, pointing out its huge popularity with young, millennial audiences. “Whilst the world of traditional sport already has an obvious structure and defined boundaries, there’s more of an opportunity to participate in the esports market and make a real impact. It’s a hugely rewarding sector to operate in.

“With sporting events cancelled across the world right now, sports fans are turning to esports, which will see the industry boom even further,” he says.

Getting involved in the game

While that all sounds great, how and why should tech brands and retailers to get involved in esports?

“The rise of esports is a huge opportunity for tech brands and retailers on both a brand and supplier level,” insists Shulga. “Firstly, esports audiences are vast, and esports fans are typically loyal and extremely engaged. Esports provides a huge platform for brand exposure and is a direct channel to the youth demographic. Beyond marketing opportunities, there is an entire digital ecosystem which tech businesses could capitalise on. Firstly, in the distribution and streaming of tournaments and esports content to worldwide audiences via digital platforms.

“Then there is the huge network connectivity requirement and the custom hardware needed for the players. Increasingly, there is also demand for innovative and interactive formats, as well as VR and AR experientials.

Shulga adds: “Finally, there’s an opportunity for creating tools that better connect players, and provide users with enhanced data analytics on their performance and others’.”

Chen notes that the huge growth in interest in esports is also driving a lot of demand for esports game titles, and the hardware needed for gaming at a top level.

“Streamers, broadcasters and other influencers are also a great way to reach this passionate audience,” he says. “Technology also helps to drive innovation in esports. For example, the latest high- end CPU and GPU hardware allows games to look even more specular, and incorporate realism and effects that add to the experience. And new, more complex games drive demand for new hardware.

“This is just like 20 years ago, when the PC industry was driven by Intel and Microsoft. When Microsoft released a new operating system, which needed more advanced hardware to run at its best, this was the motivation for upgrading our PCs. Now, the driver for gamers to upgrade their PCs and laptops is the release of advanced new game titles, driven by developments in GPU technology.”

What’s next?

It seems the bubble certainly has not burst yet on the esports market, but what can we expect to see happen in the arena in the coming years? Shulga believes that as esports is no longer niche, in the current climate, it will be more popular than ever.

“Looking to the future, there will be a steady 25% increase in growth every year, with investment, viewership and revenues on the up,” he tells PCR.

Chen muses that there is even a chance that esports might make its way to the Olympics, which would certainly solidify the seriousness of the sport.

“Many countries now officially recognise esports as a sport and as a serious business sector. Many academic institutions even provide courses for esports, and there is even talk about whether competitive gaming could become an Olympic sport,” says Chen.

“With prize funds supported by governments and major sponsors, esports is set to become even more prosperous. GIGABYTE believes esports will be just like basketball, football and other mass market sports.

He concludes: “Esports brings joy to people, whether they are participating or watching, and as an entertainment business, we expect to see significant investment. This will drive this community and sector to keep growing and innovating. And, as it has done from the beginning, technology will be at the forefront of pushing esports into the future.”

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