Competitive video gaming, otherwise known as eSports, has taken the world by storm. This phenomenon is the next big global movement that will eventually surpass traditional sports in viewership and revenue generated. With help from ever-improving mobile device technology as well as access to high speed internet, streaming these global competitions such as Blizzcon’s 2016 World of Warcraft Arena World Championship have never been easier and more ready for mass adoption worldwide.
Is the world ready for eSports to make video games into a spectator sport? Yes it is!
The excitement surrounding eSports is already here. According to Superdata, the worldwide audience for eSports will hit 214 million viewers in 2016 and over 300M in 2019. Last year, The New York Times reported almost 31 million people viewed the NBA finals on the American ABC network, which was the highest viewership for this event in the last 18 years. In contrast, around 36 million viewers tuned in for last year’s eSports League of Legend finals in Berlin, Germany, according to Riot Games. This is a huge feat for the whole competitive gaming community. Clearly, eSports is making waves in the spectator sport world.
Many companies have taken notice of this movement and are trying to capitalize on it. One of the biggest video game companies in the world, Activision Blizzard, announced in October of 2015 its own eSports division that will be headed by the former CEO of ESPN and the NFL Network, Steve Bornstein. Another major company, Electronic Arts, revealed its own competitive gaming division quickly after in December of 2015 which will be lead by Peter Moore. According to ESPNMediaZone, ESPN, the self-proclaimed worldwide leader in sports even took notice, launching a new eSports vertical that will deliver comprehensive coverage surrounding the world of competitive gaming.
One of the biggest contributors to the growing popularity of this sport was the acquisition of Twitch by Amazon for $970 million in 2014. Twitch, which is the world’s leading video platform and gamer community, has seen tremendous growth in viewership and user engagement since this acquisition. In 2015 alone Twitch recorded 421.6 monthly minutes watched per viewer compared to YouTube’s 291.0 minutes a month.
So what does that mean for viewership in traditional sports? According to a report from Newzoo, a marketing research firm that specializes in gaming and eSports, 22 percent of male Americans between 21 and 35 watch eSports. That's about the same percentage that watches baseball and slightly more than the number who watch hockey. I believe with these trends of declining viewership in traditional sports on ESPN, ABC, FOX and NBC due to cord cutting will continue as younger “millennials” become a bigger part of the population and continue to consume more media compared to their Generation X counterparts.
Although, eSports still have a long way to go in securing a foothold in the average person’s everyday life, it is making tremendous strides domestically and internationally in becoming the next big thing. More and more countries are advancing in their technology to provide faster and more efficient broadband to citizens. If this trend continues, global growth can help eSports viewership expand exponentially, one day surpassing that of traditional sports. Not only are eSports the next big movement in sports, but its rise in popularity coincides with another technology that is sweeping the globe – virtual reality.
My next article will discuss how virtual reality, like eSports, is shaping the future of the video game industry.
By: Nicholas Licouris
Investment Advisor Representative
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss.
Gerber Kawasaki, 2716 Ocean Park Blvd. #2022 Santa Monica, CA 90405. Contact us at (310) 441-9393.