In 2020, esport games like CS:GO enjoyed a surge in popularity, in terms of both participants and spectators. It was triggered by broader global events, with conventional sports leagues and tournaments postponed or canceled, and at the same time, millions were stuck at home looking for online activities to keep them occupied and entertained.
One of the biggest questions at the time was whether this truly represented eSport’s escalation into the mainstream. Or was it just a short-term spike, with eSport set to return to its niche popularity? Two years on, and we have the answer. This year, global esport is expected to generate $1.4 billion in revenue, with viewer numbers exceeding 530 million. Both these figures are predicted to continue to grow year on year.
Diverse sources of revenue
Think of sports revenue and your mind might naturally go to ticket sales for the major tournaments and perhaps online subscriptions to catch the action from live streams. But that is only a small component of the $1.4 billion revenue generated by eSport in 2022.
In fact, the majority of revenue comes from advertising and sponsorship deals – something that some eSport organizations are more skilled at leveraging than others. There are also peripheral revenue streams that are proving increasingly lucrative. A prime example is sports betting. With more US states legalizing sports betting every year, increasing numbers of eSports fans are learning how to bet online. They are backing their favorite eSport teams in the same way as NFL and NBA fans have been sports betting in the US for years.
Meet the esport money machines
We mentioned earlier that some esport enterprises are proving to be better at monetizing their activities than others. If we just look at tournament prize money, Team Liquid leads the pack by some margin. The Netherlands-based esport powerhouse has representation in 19 different eSports and has accumulated more than $39 million through participation in almost 2,300 eSport tournaments.
But if any evidence is still needed that eSport has truly joined the ranks of other sports, it is that a team’s value is dictated by more than its results. This year, US-based Team SoloMid, better known as TSM, became the first esport team to be valued at more than $500 million.
Today the world, tomorrow the metaverse
Looking ahead to 2023 and beyond, eSport teams are carefully evaluating emerging technologies like blockchain and the metaverse. TSM and Fnatic signed partnerships with FTX and crypto.com respectively in 2022 – evidence in a single sentence that success or failure can sometimes rest on a knife edge. Others are looking at exploiting the emerging play-to-earn market, which rewards players with digital coins.
It is no great stretch to see a future in which games could be linked through a metaverse, transferring power from publishers to teams.
These are uncertain times, both in terms of emerging technology and the broader global economy. But eSport remains in rude health and its future looks rosy.