The rise of Esports and its billion dollar valuation

Esports have seen a meteoric rise in popularity over the last few years: what has caused this incredible rush and how much is the industry worth?

2018 is widely considered to be the year that Esports (Electronic Sports) hit the main stream. Since 2018, many large companies in the sector are fast approaching the magical billion-dollar valuation mark. With myriad new investors and companies getting into the game, Newzoo project forecasts that the industry will reach $1.6 billion by 2021.

Investment in Esports

In October’ 2018, Cloud9 raised $50 million in Series B funding to become the most valuable esports team in the world. 9 other teams were also valued at $100 million. Highly influential investors like Mark Cuban have also got involved, taking up large stakes in the industry.

2018 was the year that many non-gaming companies struck numerous sponsorship deals with the industry. These newcomers are showing no signs of slowing down, with Newzoo forecasting a massive 60% of Esports income coming from sponsorship.

A shift in Esports dynamic

While esports leagues and tournaments were first created to market a particular game, the dynamics have shifted massively. At the beginning of 2018, Activision Blizzard held their first ever Overwatch League grand finale. It was the first ever esports league that followed the same business model of traditional sports. Following their lead, many other publishers are also now focusing on creating and offering stand-alone leagues and tournaments. These not only generate increased interest and buzz around games but also as a separate revenue stream.

Challenging big leagues like the NFL & the NBA

Back in 2018, the League of Legends Worlds Championships were watched by 100 million viewers around the world. In comparison, the 2018 Super Bowl was watched by 103 million people. Based on these statistics, it is safe to assume that it may not be long until esports leagues might take over traditional leagues such as the NBA and the NFL and shape the future of gaming and sports.