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April 18, 2023
eSports Epic Rise to Success
eSports are older than you think. Their recent success owes much to decades of history, with its roots in the early 70s and video games. The first official video game competition took place at Stanford University on 19 October 1972. Players competed in the 'Intergalactic Spacewar Olympics', playing Spacewar for an annual subscription to Rolling Stone magazine. Competitions grew with clans vying for recognition in first-person shooter games (FPS), multiplayer online battle arena games (MOBA), and fighting games.
Fantasy and virtual sports betting was the next obvious development. Fantasy sports offer year-round entertainment and work in a similar way to old-school fantasy leagues. People became ‘managers’ by filling in and posting their fantasy team then waiting excitedly for the post to arrive to find out if their team had won the match. With the time wait now gone, online fans can enjoy multiple fantasy and eSports games from all over the world with ease. Players can bet on result outcomes, goalscorers, league tables, and more.
While other entertainment sectors struggled during the pandemic, eSports continued to rise. With real-life sports cancelled, fans turned to eSports and stuck around after regular sporting events returned to the scene.
iGB recently released its third annual eSports report. Over the past twelve months, global eSports revenue has reached $1.38 billion, up a whopping 21.8% from last year. The global esports audience reached approximately 532 million people, up 8.7% year on year. Comparatively young, eSports is here for the long game. So is the potential for profit.
eSports were, and still are in many places, unregulated. This is beginning to change, however, as the world wakes up to the potential of eSports. Last year saw many regulation changes.
The USA is currently in the throes of several states undertaking changes in regulations. New Jersey filed a bill in October 2022 to reclassify eSports under internet gaming (gambling) instead of retail casino, with eSports able to operate separately from land-based casinos. In Nevada, the Esports Technical Advisory Committee (ETAC) and the Nevada Gaming Control Board (NGCB) voted to amend regulations to include eSports as an option for wagers on events. Many more states allow betting in some form, including Tennessee, Michigan, New Mexico, and West Virginia.
North of the border in Canada, except Ontario, eSports are fast growing. Canada has an estimated 22.8 million gamers, a substantial potential haul of bettors for businesses to tap into. In 2021, the Canadian government passed a bill that legalised single-event sports betting, opening up possibilities.
Home to over 600 million people, Latin America (Latam) is an attractive option for future development. Brazil is one of the main markets that has continued to grow in the eSports sector, making it more attractive now than ever before. Since sports betting regulations changed in 2018, eSports is a viable option. The Brazilian government, the Brazilian Institute of Responsible Gaming (IBJR) and the National Association of Games and Lotteries (ANJL) continue to work through changes.
Other countries are also expanding in the world of eSports, like Argentina, Columbia, Mexico and Peru. Mexico recently introduced a new tax to help generate finances. Businesses are beginning to take heed and advance into the region. SAGSE Latam, in Buenos Aires, Argentina, on 19 – 20 April, and SiGMA Americas in São Paulo, 14 – 17 June, are only two of the upcoming events that will further cement eSports in the region.
Europe remains a firm favourite for eSports providers, with millions of fans across the diverse continent, such as the UK, France, Germany, and Italy, to name
but a few.
Malta is the epicentre of the European iGaming world. Estimates put Europe's gambling market at around $111 billion in 2019 alone, with online gambling generating $27.6 billion in revenue, and land-based gambling bringing in $83.7 billion. The European Gaming and Betting Association predicts that online gambling, including eSports, will account for 33.6% of Europe's gaming revenue by 2025. The European video games market was worth €23.3 billion in 2021, employing 98,000 in 2020.
International events, such as ICE London 2023, held on 7 – 9 February, and SiGMA Europe 2023, held in Malta from 13 – 17 November, are global events with tens of thousands of attendees.
China is one of the few locations to have taken a direct hit in terms of changes in regulations in 2021. Under-18s were limited to three hours of online gaming per week, causing a significant impact. A survey by Niko Partners in 2022 of 1,250 young gamers found 77% had reduced their playtime each week. Young players have reduced by 32.3% to 82.6 million
since 2020.
In India, reforms are underway to update legislation. Cricket betting alone is worth about €139.30 billion in the country. One area showing big promise is fantasy sports betting, with a jaw-dropping 160 million active fantasy sports players. Indians are also high rollers at live casinos, with regional favourites being Teen Patti and Andar Bahar.
The Philippines continues to see betting as a viable option, despite assurances of sanctions by China, and South Korea, which is rolling out better 5G provision, improving mobile gaming. In total, there are currently 48 countries that offer eSports in Asia.
eSports in Africa are estimated to be worth more than $25 billion. The vast majority of enthusiasts are in the 18-24 age category, with over 30% engaged in online betting. Big events, such as the BiG Africa Summit, 30 – 31 March, in Johannesburg, South Africa, attracted esports fans from across the vast continent.
South Africa is one of the front runners, with an overall gaming industry worth over R4 billion. This tech-savvy nation is a big user of social media, mobile gaming and streaming, and eSports fans engage with streaming sites more than normal television.
Nigeria is another leader in African eSports. Nigeria has had a recent growth spurt in all verticals of iGaming. Being a country of athletes, sportsbook has always been widespread, and eSports was a natural progression. Many Nigerians enjoy fantasy leagues, and Nigeria is becoming a popular location for new iGaming platforms.
Esports are spreading quickly across many African nations, and are especially strong in places like Tanzania, Kenya, Zambia, Zimbabwe, and Ghana.
Australians love all things sport and iGaming related and are known for their skill on the field, in everything from football to rugby and cricket. There are estimated to be more than 900,000 eSports enthusiasts currently living Down Under. Aussies accounted for 0.4% of the $32 million total revenue for events in 2016, with over 10.6 million active players spending $1.2 billion in 2017.
In New Zealand, things may be quieter, but around 67% of New Zealanders claim to be gamers, enjoying gaming, iGaming and eSports in some capacity. New Zealand was one of the first countries to legalise online betting with the 2003 Gambling Act. Due to this, Kiwis have many options when it comes to gambling, including eSports. In a largely rural country, online eSports are the perfect option for fun and entertainment. New Zealanders spent nearly $2 billion on gambling in 2018 alone.
Many companies are now targeting Gen Z, young adults who grew up online using social media, and who now enjoy iGaming as a main form of entertainment. The move away from traditional gambling broadens the horizons for prospective businesses looking to capitalise on the new-found popularity of eSports.
Blockchain gaming continues to rise, with 2.78 million users in January 2022 alone. Blockchain games use a blockchain network to process and verify transactions. While blockchains offer some potential for eSports, their uses are currently limited for various reasons and are currently not reliable enough to sustain longevity in profit.
Non-fungible tokens (NFTs) are unique digital identifiers that are uncopyable. They are distinct digital tokens with real-life uses, recorded in a blockchain. They work alongside cryptocurrencies (which are fungible and interchangeable) and may have some future in eSports, though their popularity is still minimal.
Mobile gaming and the expansion of 5G have opened up the possibilities for tech-savvy players who want something innovative to match their busy lifestyles. 5G technology promises faster downloads, less lagging, bigger scale and promising investments for the industry. Over 90 countries already support 5G services with peak speeds in Taiwan, Malaysia, and South Korea. The 2022 Asia Games Market Report, by Niko Partners, predicted more cloud gaming advances.
Virtual reality (VR) and augmented reality (AR) are two areas of expected growth. Globally, there are around 171 million VR users. New VR headsets are vastly opening up the possibilities of eSports and the direction in which they may be heading. Though not yet common household items due to high costs, their prevalence is growing at a steady rate. Imagine fantasy league players experiencing the thrill of watching virtual matches in exquisite VR, and experiencing everything that live sport has to offer from the comfort of their homes.
Whatever may be coming up, one thing is certain for the future of eSports. Things continue to grow and expand across the world. There has never been a better time to get into esports.
If you want to know more about how we can help you start your own eSports business with WeAreFantasy, iGaming business in general, or expand your current brand with our platforms solutions, contact us via email at: [email protected]
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