We are living in the times where Esports was never more outspread, and it’s only getting bigger. The Esports economy was the primary subject at the Game Developers Conference. They discussed the opportunities and the overall worth of the industry at the San Francisco gathering.
Today, almost all of the Esports economy is focused primarily on the United States and Asian territories. According to several sources, Esports is set to hit $1 billion in revenue this year for the first time. The majority of this money comes from sponsorship, advertising, and media rights.
The number of followers is steadily rising too and is estimated to reach 453.8 million in 2019. This is a growth of about 15% every year.
There are many new markets Esports can gain traction on. In Latin America, the industry is quite underfunded and can reach a lot bigger potential. Twitch Partnerships manager Pablo Montero pointed out: “Latin America generated about 5% of global game revenues, but only 1% of the investment. We have a wide open field.”
The big companies are joining the uphill path of Esports. EA, Activision-Blizzard, Amazon (parent company of Twitch) are all sweeping in the booming market. Some take the role of game licensing, some broadcast the events, some organize them – all of them taking a part of the cake.
However, some people are worried that the current Esports economy is not sustainable.
Corsair‘s sponsorship manager Frank Fields said that the hype around Esports during recent years, coupled with an investment rush by capitalists and sports organizations created a valuation bubble. This basically means that the current multi-million dollar investments may soon make the costs, like player salaries, bigger than the revenue generated.
He said: “Everyone is focused on making the scene bigger, not smarter. My biggest theory is that [investors] are trying to be the next Los Angeles Lakers… But, them putting money into the scene is affecting it in a negative way.”
To make the Esports economy sustainable, the star’s salaries need to be more directly related to the revenue, rather than to speculative investments. He added that “Sponsors cannot continue to sustain the scene by themselves.” Additionally, he speculated that we need innovation in order to make more independent revenue streams.