Esports, in its most rudimentary form, has existed since the ‘70s, but only in the last decade has it become part of a fully-formed industry. This industry, like most industries, is now affected by large-scale developments around the world.
Photo Credit: IEM | Stephanie Lindgren
One of the big developments of esports events in 2022 was the return of fans to live esports events, after precautions put in place as the result of the COVID-19 pandemic. Other global developments like the Russian invasion of Ukraine also had a major impact on the futures of some of the biggest teams in their respective spaces – Natus Vincere of CS:GO esports being one of many.
When FTX, one of the biggest crypto firms in the world, went bankrupt last month, this affected TSM, who are one of the largest esports organizations in the world, and had entered into a 10-year deal with FTX in 2021 worth $210 million.
Developments of this kind will almost certainly affect esports in 2023, which goes to show how the industry no longer works in isolation. The esports industry is now overlapping with many other major industries. It’s not just big businesses in certain industries that are trying to enter into partnerships or associate themselves with esports. Wealthy countries like Saudi Arabia are planning to turn themselves into esports hubs by 2030. Esports in 2023 will likely see greater developments of this kind.
Esports and the Global Economy
A statista report claims that esports will have a global revenue of $1.87 billion by 2025, and another report from the same source claims that it is to be valued at $5.74 billion by 2030. If all of this comes to fruition, it can be ascertained that the esports industry in 2023 will certainly see growth in value and revenue.
A report from Morgan Stanley states that 2023 will see more households own video game consoles, and an increase in video game consumption would see an increase in esports activity. The report also states that despite rising recession worries around the world, the video game market isn’t one that’s likely going to be affected by such an activity. On the other hand, the esports industry needs its sponsors and funding to continue producing quality events and pay the participants their due.
This might be something to keep an eye on, with many popular esports players switching from a career in esports to Twitch streaming. Twitch has broadcasted most of the big esports events in the last couple of years and will continue to do so, but esports professionals are also using the same platform to move on from esports and get into streaming. This remains one of the threats to esports in the short term.
Chances are that someone else will take the place of those who switch to streaming, and the wheels will keep spinning. Another statista report from 2019 suggested that esports viewership on Twitch is set to surpass 2.3 million in 2023. Whatever obstacles come in the way, the esports industry is almost certainly going to grow in stature.
Growth Sectors Within Esports
The next year could also be a big year for emerging sectors within the esport industry. Mobile esports is one sector that is certainly picking up in Southeast Asia. For now, esports is mostly identifiable with traditional games like League of Legends, Counter-Strike:Global Offensive, and Dota 2, but that might soon change with mobile esports increasingly becoming one of the mainstream sectors.
Games like Free Fire, Arena of Valor, PUBG Mobile, and Mobile Legends: Bang Bang have recently gotten peak viewership of over one million viewers across many events. With so many fans in the eastern part of the world, it’s time that these events get the same sort of funding and marketing that esports that are popular in the west get. There’s quite clearly a lot of interest in these esports events.
The other sector that could use some attention is women’s esports. According to Forbes, about 41% of the gaming population in the US is made up by women. The number is 40-45% in Asia, which accounts for 48% of global gaming revenue. There’s a larger conservation to be had about the video game and esports industry being led by men. The same Forbes article states that 84% of executive positions in the 14 biggest global gaming companies are held by men. Even outside of the executive positions, only 24% of the positions are held by women.
There’s a real chance for esports to integrate women into the industry in a way that most major sports, apart from tennis, have failed to. According to Natalia Denk, who is a German scientist and gamer, there are various reasons why women have not been fully integrated into the esports scene: missing role models, fear of sexism, gender-specific socialization, and non-perception of women as a target group of the gaming industry.
She also suggested that role models, association work, club work, gender competence in journalism, and breaking down stereotypes as an educational task should help overcome the underrepresentation of women in esports.
The Valorant Game Changers event could be a model for other esports to follow, and Riot Games has since decided to create a standalone LoL women’s tournament. It has taken a while for women’s esports to really get going, but 2023 should develop this sector.
The other big sector isn’t really a sector but a country. The esports industry has captured the Americas, China, and Europe. India, the second most populous country in the world, is a massive market that could do with a bit of exploring. Mobile gaming has seen a bit of a rise in the last few years within India thanks to cheap 4G access, but there’s also scope for more traditional esports to grow with a rising middle class, an extremely young population, and professional esports competitions taking place within the country.
Blockchains, Web3 and the Metaverse
The now-defunct partnership between FTX and TSM goes to show that blockchain technology was making inroads into the esports world. Despite FTX’s bankruptcy, there is still wide belief that cryptocurrencies are going to be the future.
As far as esports is concerned, blockchain technology will help provide new models of generating revenue with the help of tokens and loyalty programs. Sports betting and collectible trading are some of the markets that are opening, which will, in turn, help esports professionals utilize revenue-sharing agreements. This will help be a way for them to crowdfund their performances.
The use of cryptocurrencies in esports will also be a part of a larger immersion of esports within the metaverse. The metaverse is a virtual reality where esports activity can occur, cryptocurrencies can be transacted, and social engagement can happen.
This is an area that esports hasn’t fully explored, and 2023 might be a great time for the current establishment to dig in. This technology would allow esports to take place in virtual spaces where there might be greater attendance.
This seems like a natural fit for the esports world, since esports matches also take place in a digital world. There might even be a future where audiences are within the digital space that governs these games, but that’s unlikely to happen in 2023.
Could the Esports Industry Transcend Its Own Boundaries?
The esports industry in 2023 should certainly see greater growth in value and revenue, expand certain sectors, and find itself merging with modern technology, but it’s unlikely to blow up outside its own bubble. Most major sports don’t regularly transcend their own boundaries, either.
The media also needs to cover this industry the way it covers some of the other industries, and it looks like that is starting to take place. There are courses online on websites like Coursera that are helping individuals launch a career in the esports industry.
Even something like soccer, which is the most popular sport in the world, only becomes a worldwide phenomenon every four years because of the World Cup. Regarding phenomena in the entertainment world, esports is not likely to become the force that TikTok became in 2020, Facebook in the late 2000s, or Netflix in the mid-2010s.
That doesn’t mean that matters in the esports world won’t seep their way into larger pop-culture phenomena. It might take a few more years for something like that to occur, but even if it doesn’t, chances are that this industry will exponentially grow in 2023 and beyond.
