Gaming and esports are a thriving and rapidly expanding industry, fueled by the passion of 3 billion global fans. Gaming & esports presents tremendous chances for industry and national governments alike, thanks to its substantial revenue potential, high-quality jobs it creates, and reputational benefits.
A FAST-GROWING INDUSTRY SECTOR IS GAMING AND ESPORTS
Gaming and esports are two separate but intertwined ecosystems that have come together to form a sector with numerous prospects for both industry and governments.
Video games have become a global cultural force, encompassing a variety of electronic amusements in which players interact with an interface or input device to provide visual feedback. They compete for people’s leisure time with other forms of entertainment such as movies, books, and the arts. Grand Theft Auto V, for example, has set seven Guinness World Records since its debut in 2013, including a world record for US$1 billion in sales in three days.
Games and the companies that make them compete in a variety of genres (Exhibit 1) and platforms (mobile, PC, and console – see next section). Even within a genre, there are significant variances across titles. Consumers have a wide range of options, from aesthetics and gaming mechanics to overall theme and topic matter. Some genres are sub-genres of others (for example, MOBAs evolved from Strategy games), and some titles are genre hybrids (for example, GTA is an action/adventure sandbox with some role-playing game features). While there is no official classification, the industry does a fair job at self-categorizing genres.
Esports is a subset of gaming that refers to video game competitions in which players compete against one another (both individually and in teams) for cash and global notoriety. Many esports competitors have achieved professional athlete status and remuneration levels. The 2019 world777 Fortnite World Cup Final (a popular video game) took place at Arthur Ashe Stadium, which also hosts the US Open. The event attracted 2.3 million watchers, and the winner took home $3 million in prize money. In comparison, 2.7 million people watched the US Open Men’s Singles final last year. Netflix has stated that Fortnite poses a greater threat than HBO1. Meanwhile, the number of prospective amateurs looking to make money from their personal pastime or passion continues to rise.
The gaming and esports industry has risen faster than anyone could have predicted, and it is now a $175 billion-a-year industry with a 10% compound annual growth rate.
According to Newzoo, yearly worldwide gaming income will reach over $200 billion by 2023, up nearly 8% from $138 billion in 20182. That is more than the top five wealthiest sports leagues’ combined yearly worldwide box office earnings, music streaming and album sales. This chasm has become wider during the course of the epidemic, as traditional media and sports properties have struggled to recover, while gaming has grown.
A massive and expanding consumer base willing to spend money on their interest is fueling this explosive expansion. Globally, the number of gamers was expanding at a 6% CAGR before the epidemic and global lockdowns accelerated the increase. 3 billion individuals will be deemed “gamers” by the year 2021. These bookworms have devoured new releases in search of novel enjoyment. Gabe Newell, the founder and CEO of Valve, a video game developer, publisher, and digital distribution company, claims that when an update for DOTA 2 (another popular esports game) is released, worldwide internet traffic increases by 2-3 percent 3.
