The Finance World Magazine| Edition: October 2023

I believe esports will rival the biggest traditional sports leagues in
terms of future opportunities, and between advertising, ticket sales,
licensing, sponsorships, and merchandising, there are tremendous
growth areas for this nascent industry.
The rise of esports has brought
about a significant shift in the
business landscape. Once confined
to the margins as a niche interest,
competitive gaming has surged onto
the global stage, attracting substantial
investments and building a massive and
devoted following. This transformation
isn’t just about gaming; it represents a
fundamental change in how businesses
view entertainment, marketing, and
investment opportunities.
Statistical analysis reveals the remarkable
growth of the esports market,
with revenue projected to surge to a
staggering US$3.96 billion by 2023. This
exponential rise is expected to continue,
with an impressive annual growth rate
(CAGR) of 8.21% from 2023 to 2027,
resulting in a market volume of US$5.43
billion by the latter year. Notably, the
largest share of this thriving market
is attributed to Esports Betting, set
to reach US$2.34 billion in revenue by
2023. Unsurprisingly, the United States
emerges as a prominent player in this
arena, generating the lion’s share of
revenue with a projected market volume
of US$1,076.00 million in 2023. These
numbers, however, only tell part of
the story; it’s equally striking that the
esports user base is expected to expand
to 720.8 million users by 2027, with
user penetration climbing from 7.5%
in 2023 to a predicted 9.1% by 2027.
This data underscores the undeniable
potential of the esports industry, with
an average revenue per user (ARPU)
forecasted to reach US$6.82, promising
an exciting future for both enthusiasts
and investors alike.
Noticing the potential of a competitive
gaming business the investors have
begun to make substantial investments
in the niche. True Gamers recently
announced a $13.5 million investment
in gaming centres. Additionally, Saudi
Arabia has earmarked a significant $38
billion for the development of its video
game industry, positioning the nation
as a potential hub for this booming
sector. These investments highlight
the growing magnetism of esports
as a profitable business venture with
promising prospects.
To start making money through esports,
it is essential for you to choose
the right business entity to invest in
within the esports industry depending
on various factors, including your financial
goals, risk tolerance, expertise,
and interests. Each type of entity offers
different investment opportunities and
comes with its own set of advantages
and challenges. Here’s a brief overview
of considerations for each entity:
Esports Teams and Players:
Advantages:
Investing in successful esports teams
or individual players can yield returns
through sponsorships, merchandise
sales, and a share of tournament winnings.
If the team or player becomes
highly successful, the investment can
be lucrative.
Challenges:
The success of teams and players can
be volatile, as performance can vary
from season to season. Additionally,
managing teams or players requires
expertise in the esports industry.
Esports Organizations and Leagues:
Advantages:
Esports organizations and leagues
can generate revenue through event
hosting, media rights, sponsorships,
and merchandise. If well-managed, they
can provide a stable income source.
Challenges:
Running esports organizations and
leagues requires significant investment
and expertise. Competition can be fierce,
and there are risks associated with the
success of specific games or leagues.
Esports Content Creators and
Streamers:
Advantages:
Investing in content creators and
streamers can provide exposure to
a broad audience and opportunities
for revenue through ads, subscriptions,
sponsorships, and donations.
Content creators can build strong fan
communities.
Challenges:
Success in content creation often
requires consistent effort, creativity,
and personality. The industry is
competitive, and gaining a significant
following can take time.
Ultimately, the best entity to invest
in depends on your specific goals and
resources.
The future of the competitive gaming
business, or esports, holds significant
promise, its embrace of diversity,
inclusion, and responsible practices
will further solidify its place in the
broader entertainment landscape. As
the industry matures, its future appears
vibrant, with opportunities for players,
investors, and businesses to thrive in
this dynamic and evolving ecosystem.
October 2023 www.thefinanceworld.com 75