Leveling Up: The Future of Esports in Post-Boom Era
The so-called eSports ‘winter’ in the U.S. should be the catalyst for better monetization strategies.
There’s a myth going around that digital natives have short attention spans. Anyone who believes this has obviously never watched an eSport gamer be consumed by tactics and strategies in the immersive world of virtual competition.?
It’s not only the competitors themselves who are fully dialed in, but the fans who watch live in dedicated arenas and the millions who tune in for free on YouTube, Twitch, and Facebook. The huge attraction of eSports is the unprecedented level of engagement it offers fans among themselves and with the players and teams competing in tournaments and leagues worldwide.
The global eSports industry was worth over $1 billion in 2021 , up 50% on 2020. It is forecast to reach $2.06 billion this year before booming to $9.29 billion by 2032. The industry is leveling up. China has the largest number of players and the Middle East is one of the fastest growing markets as governments in Saudi Arabia and UAE invest heavily in eSports infrastructure to diversify their economies.
To brands, I say don’t stay on the sidelines. Here’s a closer look at this industry and the potential for monetization of eSports as it weathers a downturn in the U.S. but continues to sweep the rest of the globe.
Boom in the East, Challenges in the West
In the West, Patrick Mahomes, Stephen Curry, and Caitlin Clark may be household names, but in Korea, the cradle of eSports, the likes of Lee Sang Hyeok — a.k.a. “Faker” — has earned celebrity status and become a multimillionaire for his exploits in the multiplayer battle arena game League of Legends. Esports took off in Korea after the nation put itself ahead of the world by installing a national broadband network back in the 1990s. Its role as a pioneer in this space laid the foundation for growth elsewhere. Just between September and November 2024, he competed with the T1 team at the League of Legends World Championship earning first place. #Worlds2024
As a sign of how seriously these leagues and tournaments are being taken, the International Olympic Committee organized the first-ever Olympic Esports Week in Singapore last year. Next year, Saudi Arabia will host the inaugural Olympic Esports Games. Esports is even represented at the Asian Games, the continental version of the Olympics.?
At the 19th edition of the Games held in Hangzhou last year, organizers had to sell arena tickets on a lottery basis. It may be unthinkable back in the west, but they are overtaking traditional sports for popularity. (For the record, China finished top of the medal table after winning five golds in games such as Arena of Valor and Street Fighter V.)
Yet the United States still dominates global revenue, turning over $871 million in 2023, followed by China with $445.18 million. That’s despite revenue falling below expectations, owners selling teams, and investors pulling back in what has been called the eSports “winter.” The issue is not popularity (tournaments broke viewership records in 2023) but expanding too fast, too soon with an influx of VC money.
The lesson stateside has been to stop treating eSports like traditional sports and look to Asia for a better business case for monetization.
A Global Phenomenon, Not a Trend
The future of eSports monetization lies in a combination of diversified revenue streams, closer partnerships with game publishers, and new ways to leverage fan engagement beyond traditional sponsorship and media rights — though they still have a major role to play. Understanding regional dynamics will also be crucial.?
Asia is expected to claim 50% of global eSports viewership by next year, reaching an astonishing one billion viewers. This massive audience has created diverse monetization opportunities such as:
Meanwhile, Saudi Arabia and the UAE are investing heavily in eSports to move their economies away from oil dependency with strategies such as:
Collaboration: Unlocking Esports’ Potential
While Gulf countries are committed to becoming eSports hubs, PwC notes that the industry as a whole needs to develop a more coherent, compelling global offering . While traditional sports like the NFL and Premier League generate individual viewer revenue of $51 and $32 respectively, eSports is far more fragmented across game titles and leagues. Partly as a result, the average eSports viewer contributes just over $2.?
But this disparity only drives home the untapped potential of the massive eSports market. As PwC suggests, game publishers need to shift their perspective to unlock this value. Instead of seeing eSports purely as a marketing vehicle for community building, they need to break their resistance to outsourcing to third parties. Collaboration between publishers and eSports organizations would then allow for innovative revenue-sharing deals that promote eSports as a profit center.
In the meantime, the downsizing and consolidation efforts in the U.S. are separating the long-term players from those transitioning out of the industry. As John Robinson, COO of the LA-based lifestyle and gaming brand 100 Thieves told Forbes: “Let’s focus on playing the game, and we’ll look at the scoreboard again in, like, two to three years.” Call this approach a matter of having a longer attention span. “We’re moving into a totally different era,” he said, “and we’re reshoring our foundations so that we are prepared for that next era.”