What’s happening in esports: Drivers, trends, and opportunities

COVID-19: While some long-awaited titles such as Last of Us 2 and Ghost Of Tsushima have seen their releases delayed due to the virus temporarily disrupting production, the pandemic has, by and large, been a massive tailwind for the industry. U.S. consumers spent a record $10.9 billion on games during the first quarter of 2020, and Twitch experienc... See more

The gaming ecosystem is extremely tight-knit, and companies need to have a strong understanding of and connection to publishers, distributors, and organizers in order to maximize opportunities in the space.

Nearly 40% of gamers make 6+ friends a year in online gaming, and the introduction of cross-platform and cloud-based gaming has enabled users to connect more freely without hardware restrictions. Game publishers are moving away from single player-based storylines and towards multiplayer worlds that allow gamers to connect more than they compete.

Size and scope: The gaming market is estimated to be around $159.3 billion with 2.7 billion global gamers in 2020, with expectations of a $200 billion market by 2023 (8.3% CAGR). In esports, the 495 million fan base is expected to grow to 644 million by 2023 (9.17% CAGR), and revenues are expected to grow to around $3 billion by 2021 after surpassi... See more

Existing matchmaking solutions and social tools embedded in most platforms today are inadequate, and much of Fortnite and Minecraft’s success can be attributed to their ability to become social metaverses that could act as a concert venue or graduation ceremony, bringing people together in unique ways that would otherwise not be possible.

Companies that attach themselves to a specific game early in their development process run the risk of being shut out by publishers or becoming niche products unable to break into other games. Some of today’s most successful gaming companies such as Twitch or Discord can attribute much of their success to being game-agnostic.

In a sentence: Gaming refers to video games that are played on PC, console, or mobile, while esports refers to the professional leagues and tournaments organized around popular video game titles, as well as the broader video game streaming ecosystem.