As the gaming market continues to surge, esports stands at a crossroads

Esports is now a global phenomenon, but to increase growth levels, there is a pressing need to improve the viewer experience outside of the stadium.
 
The gaming market continues to surge, but esports stands at a crossroads. With over 3 billion gamers and ever-increasing ways to consume gaming content beyond the game, it is no surprise that the global video game market generated $196bn in revenue in 2023, outpacing the combined revenue of streaming and movie box office. Inspired by this meteoric rise, over the past 20 years we have witnessed the birth of esports, essentially competitive gaming, which developed from an underground hobby into a global phenomenon driven by key players such as ESL, attracting thousands to arenas around the world, streaming to millions watching online.
 
After explosive growth during the pandemic, esports performance has remained strong, helping global esports to reach a valuation of $1.3bn in 2022. But the industry is entering somewhat of a transitional phase, its growth is starting to plateau. For the market to remain healthy and thriving it needs to retain and engage new audiences, which will require innovation to continuously improve the quality of the product. 

Market leaders are now launching new initiatives such as the Esports World Cup and now the inaugural Olympic Esports Games to take place in 2025, aiming to increase global reach and engagement inspire growth and ultimately encourage more brands into the space to generate revenue.

But these events alone will not secure esports’ future.

Immersive competition

Younger generations are hungry for immersive experiences, and sports and entertainment are beginning to answer the call. The Las Vegas Sphere is a perfect example of this, so too is the football viewing experience created in LA for Manchester United fans, broadcasting the game on an 87 foot LED screen replicating the experience of sitting in a pitch side seat.

For esports, this is a valuable lesson for the broadcast experience, where the vast majority of viewership comes from, and which is the key driver of commercial monetisation. Currently the broadcast experience is a far cry from the exhilaration of the arena experience – which I can personally vouch for as a harmoniously orchestrated delight on the senses. Esports organisers and teams need to think carefully about how they can elevate their broadcasts and content across channels to appeal to a wider audience and position the sport at the forefront of tech and innovation (elevating its existing advantage over traditional sports).

Interactive personalities

Increasingly, brands are shifting their focus and money towards ‘gaming influencers’, sometimes existing or ex-esports players who provide engaging and humorous content, insights and perspectives that forge a close connection with loyal audiences. These are ‘interactive’ relationships, with the personalities actively engaging viewers, and allowing them to shape the content and outcome of the streams. They have also contributed to the success of major esports titles such as League of Legends and CSGO, stoking interest in the game, tournaments and teams.
 
Esports organisers and teams need to leverage these personalities to drive audience engagement at their events and on their streams and digital channels, attracting brand sponsors in the process. Game content and pro-gamer tips are not enough.  

A pivotal moment

Esports is in a prime position to capitalise on a more immersive future for sports and entertainment. But to reinvigorate growth levels, increase audiences and drive commercialisation, there is a pressing need to innovate the viewing experience of the live broadcasts and to incorporate popular personalities to provide viewers with an engaging, interactive experience. ‘Electronic’ sports needs to prioritise building a technological advantage over traditional sports to deliver more immersive viewing experiences and content, and leveraging gaming personalities that can help to drive valuable engagement with a wider audience.  

Authored by Mike Woolston, Senior Strategist, Design Bridge and Partners, partners of The Marketing Society 
Published on 24 September 2024