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Esports has been a over the past few decades and has grown at a healthy rate. The popularity of esports started internationally in South Korea and China in the . By the , its popularity reached the United States. With the , a streaming service built around video games, the popularity of esports went international by the early 2010s. Investors were enticed by the esports industry and expected a fruitful market in the upcoming years. In 2022, many investors not seeing a , not due to a lack of popularity, but rather a difference in markets.
The popularity of esports is as high as ever. The 2022 championships took place in front of a sell-out crowd at the Chase Center, an NBA arena. The event was a spectacle and the winning team, DRX, was given for winning the championships, similar to other pro-sports leagues. In 2021, the LoL championships reached a max viewership of . The industry has also grown as personalities like have helped Twitch become the streaming platform it is today. Ninja helped spread popularity for esports by streaming himself playing video games and with Red Bull and Uber Eats. Twitch averaged concurrent viewers in 2021. Although esports popularity is strong with the support of these events and platforms, the industry is having trouble making money in ways that traditional sports leagues do.
One factor that the esports industry lacks is regional fanbases. Unlike other leagues, esports teams do not have home games, and most events are . Without differing sites, esports teams lose the ability to make money from having sites to host games and fan bases from a particular region. The NFL and other sports leagues use regional fan bases and divisions to heighten the importance of games and create rivalries between neighboring teams. Activision, the creator of popular games such as Call of Duty and Overwatch, to form regional teams, but Covid-19 struck down all plans as the idea started gaining traction.
Another issue esports is working through is . The industry became popular on free streaming platforms like Twitch and Youtube, and on these platforms. Other professional sports leagues can license their product to media companies and with media rights deals. The USA’s five largest sports leagues include the NFL, NBA, MLB, NHL, and MLS, which make a combined from their media rights deals. Esports has not been able to do the same as to watching their events for free. If esports were to license their products away from free streaming services, the viewership and interest levels would likely be to be profitable.
Although the esports industry is not hitting the jackpot that investors expected it to, there are still positive outlooks within the industry. For one, esports has capitalized on targeting a younger audience with in the 18-34 age range. The market is also expecting growth from $1.178 billion to $5.743 billion . The gaming industry is very profitable and expects to reach a revenue of in 2022, indicating potential for this form of sports gaming. The esports industry is not a lost cause but is aiming to increase profitability in the same ways as traditional sports leagues. This shift in strategy may make esports too similar to sports leagues, perhaps shifting their fanbase; however, this change may be necessary to satisfy investors, streaming services, and the esports providers themselves.
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