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Growth of e-Sports a Key Driver for the Gaming Industry

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The e-sports market expected to reach $1 billion

According to SuperData Research, the total global e-sports market was valued at $748 million at the end of 2015. Its YoY (year-over-year) revenue growth is driven by an increase in advertising as well as more brands entering the segment.

The global e-sports market is expected to reach $1 billion in 2017.

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Betting and fantasy sites are attracting investments

Platforms such as e-sports betting and fantasy sites have attracted investments of more than $150 million. Revenues earned in 2015 are expected to be $56 million. According to SuperData, “Fans remain more comfortable wagering virtual gaming content over cash, causing real-money sites to gain traction slower than anticipated.”

Approximately one-third of the e-sports fans in the United States (SPY) participate in online amateur tournaments. As the number of players increases, the number of sites has also increased, leading to saturation in the e-sports market. The next big thing in this market is expected to be the mobile e-sports space, where audiences have increased by 19% YoY in the US.

Market potential

Because there is immense potential in this segment, Activision (ATVI) and Electronic Arts (EA) should look to increase market penetration. Asia and Europe (EFA) remains a huge market for these companies. Investors and analysts will be looking closely at this sector as it inches toward a billion-dollar valuation.

The next two articles will provide insights into the e-sports segment and how this space is attracting major players such as Amazon (AMZN) and Google (GOOG).

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