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Investment in E-Sports from the private sector continues to skyrocket and is already decreasing that of some established sports
In a report on the financial condition of E-Sports (or electronic sports) market, published by the research firm of the videogame industry Newzoo, it was revealed that the total profits of this market will finally exceed $ 1 billion annual dollars during 2019. The resounding growth of 27% compared to last year reflects the ability of these competitions to captivate audiences, as well as the great utility they have represented for the investors involved.
Since 2017, the year in which this firm began to report on the size of the E-Sports industry, it has almost doubled in size. Then it generated profits of $ 655 million dollars, while the prediction for 2019, just two years later, foresees that $ 1,096 million will be generated. The same study predicts that by 2022 earnings will continue to rise to $ 1,790 million dollars.
To understand it through a comparison, through the MLB baseball generated $ 10,300 million in profits in 2018, still several times higher than the figure reached by E-Sports. However, we must bear in mind that baseball is an ancient sport, with its first iterations dating from the eighteenth century.
Other sports leagues, such as MLS, NASCAR and the EFL Championship (the second division of English soccer) are already surpassed in terms of total profits by the growing E-Sports industry.
It is not only income, as audiences also grow at a very fast pace. According to the same Newzoo report, during 2019 the E-Sports audience would reach 427 million people. To compare, according to Forbes, the NBA reached an audience of just over 1,000 million people in 2018.
Where does the investment come from?
Of the $ 1,097 million that E-Sports would generate during 2019, $ 897 million came from the investment by brands. The majority came from sponsorships, but the source of income that grew the most was the distribution rights. As audiences grow, more companies are looking for ways to make a profit by bringing transmissions to the public.
The transmission of events is an area in which E-Sports differs from traditional sports. Access to sports broadcasts of any of the major professional leagues in the world, be it baseball, football or motorsport, costs money, either in the form of a subscription to cable television or a digital streaming service. In the case of E-Sports, their main competitions and leagues can be seen for free around the world through platforms such as Twitch or YouTube, through which the organizers transmit the events.
So, it is to be expected that media and distribution investment will grow more than other items, as the organizers of the E-Sports leagues and the channels and platforms that transmit them find a way to monetize the huge audience they have cultivated.
However, the growing audience also creates an opportunity for brands, which seek to capitalize on the E-Sports scenarios to expose themselves and captivate the gamers' community.
Leagues such as the Overwatch League (OWL), for example, have signed important sponsorship agreements with some of the largest brands in the world. Just last month, the company Activision Blizzard, owner of Overwatch, signed an agreement with Coca-Cola, which became the official drink of the game and its league of E-Sports, in which the company receives exclusive distribution in all events of Overwatch, as well as the exclusive sponsorship of all 20 OWL teams.
This agreement follows others with brands of equal size, such as Toyota and T-Mobile, who have also become major sponsors of this league, one of the fastest growing in the world of E-Sports.
The Newzoo report, the most comprehensive in the industry, does not include in its analysis other indicators such as player salaries, prizes, capital investment in organizations related to E-Sports or money that moves through betting houses.
LatinAmerican Post | Pedro Bernal
Translated from "E-sports:un negocio en auge que generará más de $1000 millones en 2019"