The eSports industry proved to be one of the most resilient sectors amid the global Covid-19 pandemic. Here’s what 2021 has in store for its future.
When you think about the eSports industry in general, what’s the first thing that comes to mind? Many see images of roaring stadiums full of spectators cheering on their favorite sports teams. That is, that’s what we used to think about before Covid-19 changed the world.
The new reality of social distancing wreaked havoc worldwide and devastated economies and industries galore. eSports also took a beating, but to a much lesser extent than traditional sports. The summer of 2020 brought new regulations and gradual improvements.
Things are slowly starting to look up as the post-Covid uncertainty has given rise to a new star: eSports. Despite traditional sports’ struggle to go back to how (impressive) things were, virtual sports recorded twice as many hours watched during the lockdown than in 2019. But that’s just the beginning – here’s what you need to know.
The biggest changes in eSports due to Covid-19
The coronavirus impacted this growing sector in several ways:
- Changes in financing
- Traditional sports changing the format to virtual
- Fully transitioning to online events
- Heavy financial modifications throughout the eSports industry
Changes in financing
A steep growth trajectory accompanied eSports as the sector entered 2020. Numerous eSports companies resorted to venture capital to push for internal growth due to lucrative predictions for the year.
However, the global pandemic nearly gutted countless economies, causing smaller companies to struggle to obtain risk capital. In response to such financing difficulties, many companies had no choice but to look to alternative financing methods like going public and crowdfunding.
Traditional sports changing the format to virtual
eSports’ flexibility allowed it to move to an online infrastructure mostly. As a result, most relevant tournaments and leagues managed to survive and take place as planned. Traditional sports events had no such flexibility because of their nature that involves physical competition. As a result, traditional sports needed to find alternative ways to retain revenues and engage audiences.
Sports entities quickly noticed the rising demand for eSports and started exploring opportunities. Perhaps the best example of integration between traditional and eSports took place in the motorsports industry. Racing simulation series started appearing across Le Mans, W Series, IndyCar, NASCAR, and Formula 1. Such events drew large audiences throughout online live streaming platforms.
Fully transitioning to online events
The eSports industry is, by definition, a natively online ecosystem. However, sponsors, media, league and tournament organisers, and esports organisations all had to adapt to sudden restrictions due to Covid-19 policies.
Despite its native online character, most (if not all) eSports events take place offline. However, the pandemic forced the professional competitive industry to move entirely online. This transition was an enormous challenge for all teams and companies involved, including monetisation adjustments (such as sponsorship activations).
Heavy financial modifications
Most countries worldwide introduced strict Covid-19 related policies to prevent the spread of the pandemic. This move caused the breaking off of numerous revenue streams connected to esports venues and events.
But these revenue streams represented a lifeline for numerous companies in the industry. As a result, several organisations had no other choice but to counteract the revenue loss from Covid-19 policies by cutting operational costs. Some companies even released all their staff in the process.
eSports industry in 2021: What all the signs point to
Besides becoming intertwined with the Olympics, 2021 will likely see eSports generate more revenue than traditional sports such as rugby. Interestingly, predictions assure the community that the term “eSport” is all but ready to disappear. The reason is that traditional sports culture will accept gaming events as their natural and organic part.
Despite the global pandemic, this industry will grow immensely. Numerous entertainment and media giants like AT&T, Comcast, and Disney are interested in purchasing content rights for eSports. Provided no other drastic occurrences take place in 2021, this industry will earn $1.7 billion globally.
Interestingly, the growing popularity of eSports wagering is one of the consequences of such an exciting development. Some predictions place the wagered value of money and items combined on major eSports titles by 2020 at a staggering $12.9 billion worldwide!
eSports wagering doesn’t care about Covid-19
The growing popularity of the eSports industry despite Covid-19 consequences is also evident from the state of online wagering. Bookies already know that eSports are here to stay and are taking advantage of the thriving sector.
For example, this type of virtual sport is already a national hobby in numerous Asian countries. You are sure to find highly developed betting markets in this region, as half of the global market wagering revenue comes from Asia.
In Europe, the United Kingdom is another blossoming region for eSports online betting. UK Gambling Commission data reveals that the eSports vertical’s year-for-year Gross Gambling Yield change exceeds 2922%. All indicators suggest this trend will continue, likely ushering in a golden era in eSports betting.
Furthermore, Canadian-based operators require official licensing to offer betting services to fellow Canadians. But sites based outside of Canada are not subject to these laws. In other words, Canadian punters are free to access and bet on internationally regulated and licensed eSports sites.
Last but not least, numerous US states are already recording massive surges in online wagering. States like West Virginia, Pennsylvania, Oregon, New Mexico, Montana, Rhode Island, Michigan, Illinois, Iowa, New York, Delaware, Arkansas, Tennessee, New Jersey, and Nevada have legalised this gambling form.
However, establishing sufficient precaution measures and specific legislation governing such activities is yet to follow. The number of online punters will grow as soon as the process becomes more streamlined and better regulated.
Impact of Covid-19: 2021 to become the year of eSports gambling
No matter how you look at it, there’s no doubt more people will want to join the eSports hype. Gaming and betting providers across Asia, Europe, and the US will offer countless wagers on different gaming events. In turn, these gaming events will benefit by gaining more prominence and further expanding their fanbase.
In other words, the post-Covid-19 world we live in today will eventually stop needing the lockdown. On the other hand, the sector has endured and grown despite the global pandemic. Therefore, preventing the eSports industry from developing even further is nearly impossible.
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