Esports or electronic sports are revolutionizing the gaming industry. Gaming is no longer a pastime, it is serious business with professional gamers vying for the top prize at international tournaments.
The best gamers make millions of dollars, and the global gaming industry is estimated to reach USD 132 billion by 2030 from USD 56 billion in 2021, with an annual growth rate of 10.32%.
The funding of the million-dollar prize money for esports required a simple process that did not require the involvement of the banking system and opening a bank account. Small subscriptions or crowdsourcing became the primary funding source for these electronic tournaments.
This is where crypto or cryptocurrency came in and brought blockchain into gaming. So what are cryptocurrency and blockchain, and how are they related? The definition of these two terms will make things easier for us:
Just like the US dollar, cryptocurrency is a store of value and a medium of exchange. Unlike the US dollar or any other currency, however, it has some unique characteristics:
- Zero intrinsic value, and it cannot be traded for another commodity like gold.
- Has no physical existence and can be found only in a network.
- Uses a decentralized mode of operation without any Central Bank.
Blockchain is the platform that makes cryptocurrency viable. Transactions are carried out through this decentralized ledger, and a centralized clearing authority is not required. This helps to make payments to international players who don't have a bank account.
The rise and growth of eSports
The Esport industry is growing thanks to increasing viewership and the higher interest of various brands due to this viewership rapidly. There was a temporary slowdown in the industry due to COVID-19, but in 2022 the industry seems to be returning to normal.
According to a report by Newzoo, live streaming is another reason for an expanding audience for esports. The stats that are being shared in this article relate only to professional competitive gaming and exclude non-organized competitive gaming or amateur competitions.
COVID-19 has been a huge trigger for esports even though many in-person events were canceled and regional contests held in place of international events. There has been an increase in viewership by 12.3% annually from 2018 to 2019.
The combined viewership of occasional viewers and eSports patrons stood at 435.9 million in 2000, and the figure is expected to grow to 474 million in 2021.
Here are some amazing statistics for the eSports market in India:
- The number of eSports users is 17 million as of 2020.
- The aggregate revenue of Indian sports startups was $68 million in FY20.
The market for eSports is rapidly expanding as it gains popularity globally. This has been possible with cryptocurrency since it decentralized the access by players and made payments easier. The eSports market was earlier concentrated in Western Europe and North America.
Recently, it has expanded to Latin America, Asia-Pacific, Africa, and the Middle East. Mobile phone streaming has also made eSports popular in Brazil and India. The eSports market will reach 577.2 million by 2024, given the annual growth rate of 7.7%.
With the growing interest of global brands in eSports, the scope for this industry looks promising. Even though the annual growth rate in revenues has come down from around 30% in 2018 to 23.3% at present, that is not a small opportunity considering the revenues from eSports were $947 million in 2020.
Things were looking better in 2021, and revenues are expected to touch $1084 million with an annual growth rate of 14.5%. A third of the total revenues would be coming from China. The market should be valued at around $1618 million in 2024, given an expected annual growth rate of 11.1%.
The revenue breakup details are as follows:
- Sponsorship: $641 million growing 11.6% annually
- Media rights $192.6 million with a 13.4% growth rate
- Publisher Fees: $126.6 million growing at 22.6%
- Merchandise and tickets: $66.65 million with a growth rate of 13.8%
- Digital: $32.3 million, an increase of 50.4%
- Streaming: $25.1 million, up by 25.7%
The primary live-streaming platforms in the West are YouTube Live and Twitch. The leading platforms in China are Zhang and Douyin. The live streaming audience has grown by 11.7%, from 593.2 million in 2019 to 662.7 million in 2020, due to social distancing and audiences staying at home due to the pandemic.
The live-streaming industry is expected to rise to 830.3 million in 2024 at a CAGR (compound annual growth rate) of 9.2% from 2019 to 2024.
While China has matured as a market, regions like Latin America, Southeast Asia, Central Southern Asia, the Middle East, and Africa will be the growth drivers for the eSports market.
Regarding the language of broadcast, English is followed closely by Spanish and Portuguese. Approximately 2.5 billion hours are watched in Portuguese and Spanish combined. Spanish viewers recorded a growth of 369%, while for Portuguese, it was 189%.
Awareness of eSports is on the rise, with figures reaching 1.8 billion in 2019. The numbers were expected to grow to 2 billion in 2020.
The platforms offering eSports are rising, though Twitch continues to be the most popular platform. In terms of hours streamed, Twitch is a clear leader having 89.7% of the market share compared to Facebook at just 6.9%. (9)All this has been a result of COVID-19.
Channels broadcasting the sports live went up to 105,000 in 2021. Activity on these platforms has increased, signifying a rise of gaming fans in eSports.
- ESports's expected annual growth rate between 2020 and 2025 is 6%.
- The predicted revenue in the US alone in 2023 is $516 million.
- Prize money paid out so far is $1.182 million.
- The largest prize pool is $40 million.
- The biggest individual tournament prize pool is $15.2.
- Dota 2 (eGame) paid out $280 million to players.
- The most watched eSports in the team category is DWG Kia.
- The 2021 World Championship recorded 174.82 million hours of viewing.
The use of crypto in gaming and eSports
Crypto has become a part of Esports with sponsorship, trading platforms, and coins. Global tournaments have been paying winners in bitcoin.
It's a win-win situation for Crypto since their target audience, like eSports, is young, tech-savvy, and stays online for hours. The goal of Crypto is to convert fans into users of crypto.
Bitcoins as prizes
Funding e-tournaments is easier with a crypto gaming platform since permission is not required and is decentralized. Transferring money internationally is easy, and the fee is nominal.
Players don't have to wait weeks to receive payment since paying with crypto takes a few minutes. With crypto in the gaming industry, volatility in some currencies can be avoided, and players in some countries like Latin America prefer bitcoin to their local currency. This flexibility is welcome to both players and tournament organizers.
Greater access to eSports for players and fans
ESports fans find it easier to buy gaming equipment or bet on players. This would not be possible if players tried to go through the normal financial system like banks. Payments can be made globally swiftly at a low fee.
Blockchain in Gaming and Esports
Blockchain in esports has had the following impact:
Stakeholders in eSports like players, sponsors, or game developers need a comprehensive place to interact. Blockchain provides this and also gives access to amateurs.
Blockchain ensures greater transparency as you can check everything on the network. Game developers get paid on time with smart contracts.
Access for beginners
With a secure database and low operating cost, blockchain lets amateurs participate in professional tournaments.
With blockchain in the gaming industry, all stakeholders are ensured timely payment since it has no connection with the Government or banking system.
In-app purchasing secure
Customers make in-app purchases securely through DApps that are secured by blockchain.
Greater freedom for players
Players are not forced to lose a game or depend on organizers and have greater control with blockchain.
Makes donations easier
With blockchain, viewers of eSports can donate their preferred gamer.
Viewers are rewarded with cryptocurrencies. These can be exchanged for other cryptocurrencies or fiat currencies.
Creating unique in-game assets
You can create rare in-game assets that will be valued differently from other in-game assets.
Developers can get funding easily for their new projects and help them market their games.
GameFi and DeFi - how they intersect
The world of crypto keeps changing, and new concepts are being introduced like GameFi and DeFi. Let us define these concepts and find out how they are interrelated.
This is the acronym for decentralized finance. DeFi relates to financial services on decentralized platforms using smart contracts. This platform provides easier access to financial services since banks and other intermediaries are excluded.
GameFi combines gaming and finance. Decentralized gaming ensures that virtual coins used in video games benefit not only developers but also gamers as well. The year 2021 saw around 70 new games (17) introduced in the crypto market and had crypto wallets connected to them.
GameFi has used technology from both NFT (non-fungible tokens) and DeFi for building a series of blockchain games. The crypto blockchain game uses decentralized applications and offers financial incentives to the players. The tokens awarded to winners of GameFi are cryptocurrencies and can be legally traded in the secondary market.
Play-to-earn games like Axie Infinity are possible due to blockchain in esports and allow players from low-income nations to participate and win. However, since purchase cost goes up with demand, gaming guilds or scholarships come into the picture to help financially weak players compete.
How are crypto and eSports driving each other’s growth?
The world of Esports or electronic sports was badly hit due to the pandemic, and lots of international tournaments were canceled. However, with a crypto gaming platform, it was possible for players internationally to collect their prize money easily since no banks were involved.
Crypto benefited from this partnership since they have the same target audience as eSports, and they convinced the players to start using Crypto. This is how both these industries helped each other grow.
What does the future look like?
Revenues from eSports are expected to go up to $1618 million in 2024, and the market is growing annually at over 11%. Since the growth of eSports has been largely driven by cryptocurrency in the gaming industry, it is expected that revenues from crypto should also grow at a healthy pace.
Blockchain in gaming has paved the way for higher revenues for eSports and created a level-playing field for players from all economic backgrounds and gaming experiences. Since crypto is an integral component in the success of eSports that has ensured timely payouts to gamers, it also has excellent growth prospects.
There is a huge value in eSports careers, and hence Hero Vired brings you the Certificate Program in Gaming and eSports, in collaboration with NODWIN Gaming, one of the largest eSports and gaming organizations in India.
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You will learn all aspects of the stream you choose and work on exciting projects that will help you learn hands-on.
Take the next step and build your career in gaming and eSports!