Twitter’s eSports Segment Takes a Step in the Right Direction

A rapidly growing online phenomenon

Twitter (TWTR) recently partnered with video game publisher Riot Games Oceania to live-stream a major eSports tournament called League of Legends: League of Origin. The deal allowed Twitter to live-stream the competition to its ~328 million members globally.

In announcing the partnership with Riot Games Oceania, Twitter noted that eSports could represent a rapidly growing online phenomenon. The company added that many eSports fans already use its platform as a primary source of content.

Riot Games Oceania echoed that sentiment, adding that live-streaming the competition on Twitter would give the audience a shortcut to watch the game and engage at the same time.

Twitter’s eSports Segment Takes a Step in the Right Direction

$1 billion up for grabs

In addition to impressing eSports fans on its platform, there is real money on the table for Twitter in the eSports industry. Research firm IHS Markit predicts that the eSports advertising industry could witness explosive growth in the next few years—possibly topping $1 billion by 2021 from ~$280 million in 2016.

Garnering even a quarter of the projected $1 billion eSports ad revenues could have a transformative impact on Twitter’s financials.

Potential growth catalyst

Going into eSports could also produce a positive ripple effect for Twitter, including attracting more subscribers to the platform and encouraging marketers to spend more on Twitter ads.

The partnership with Riot Games Oceania also supports Twitter’s ability to leverage innovation and strategic deals. This capability could allow Twitter to fend off growing competition from Facebook (FB), Snap (SNAP), Yelp (YELP), and Alphabet’s (GOOGL) Google for online advertising funds.