It has been nearly three decades since Electronic Arts, better recognized as EA Sports, released Madden NFL. While most are aware of the popularity of e-sports, not everyone appreciates the magnitude with which this sector has expanded. Not only has it developed into a billion-dollar-plus industry, but it also has both collegiate and professional levels. And increasingly, the way e-sports teams are functioning looks a lot like other professional sports leagues.
While several e-sports teams and leagues continue to advance in the marketplace, bigger names are beginning to surface in the field. E-sports players are increasingly being recruited and drafted like other athletes with elite skills. Understanding this, it might be time to wonder what’s around the corner for e-sports games. Are e-sports teams simply another fad sporting entertainment experience? Or are we on the verge of a “Ready Player One” type of shift?
Welcome to the World of E-Sports Games
E-sports, by definition, represents a global venue of video gaming where leagues and teams compete against one another. With streaming and interconnectivity, e-sports have boomed over the last few decades. In fact, it continues to realize double-digit growth, bringing in over $1 billion annually in revenues. Likewise, e-sports games have attracted more than 400 million spectators of which half are enthusiasts. Twitch is an example of a dedicated streaming service for these enthusiasts to view their favorite esports teams.
One of the most impressive developments in e-sports games has been the recent rise in popularity of e-sports teams. Several big e-sports companies now compete for viewership by promoting their own game leagues. E-sports companies purchase esports teams because of their lucrative potential. And major sponsors and media hosts are also aligning with various e-sports games’ competitions. Based on the interest alone, it appears e-sports is about to explode.
Major E-Sports Games Hosts and Players
So, who are the biggest and boldest companies in esports games today? EA Sports continues to be a major player not only with Madden NFL but also Apex Legends. Activision Blizzard has recently catapulted to the top with its Overwatch League in addition to its Call of Duty League. And others include Take-Two’s NBA 2K League, Riot Games’ League of Legends, and Epic Games’ Fortnite. Each of these e-sports games and leagues is attracting tremendous interest across the board. And naturally, fielding e-sports teams for these leagues is an essential task.
Interestingly, recruiting players for these e-sports teams has evolved into a typical draft-like process similar to regular sports. The best and brightest are identified based on competitive ranking modes that many e-sports have. Likewise, both collegiate and professional organizations now publicize talented e-sports players. The National Association of Collegiate Esports (NACE) has 50 participating colleges with scholarship awards to give. And with endorsements and prize earnings, the top e-sports games players can earn as much as seven figures.
A Growing Market (and Revenues) for E-Sports Teams
Overall, the e-sports games’ market is expected to be over $3 billion by the year 2022. The question is how e-sports teams and leagues generate actually revenues. With the increased popularity of leagues of e-sports teams, tournament ticket sales offer one revenues stream. League of Legends tournament attracted over $5.5 billion in sales recently. With nearly 600 major e-sports games’ events each year, this reflects a significant portion of potential earnings.
Other revenue streams for e-sports games naturally include unit sales to consumers as well as related merchandise and advertising. But increasingly, brand sponsors and media partners are contributing sizable amounts to the pie. Annual revenues for brand sponsors exceed $700 million annually. AT&T, Dell, and Intel are some examples of such sponsors. ESPN and Disney have agreed to broadcast esports games such as the Overwatch League. Thus, the revenues for e-sports teams and games are quite diversified.
The Future of E-Sports Teams – Franchises and Fan Bases
The industry of e-sports games is growing rapidly, and not surprisingly, those in the sporting business have taken notice. In the Overwatch League, the New England Patriots and L.A. Rams already have e-sports teams among others. Recently, the Minnesota Vikings announced they were interested in fielding a Call of Duty League e-sports team. And the Houston Rockets recently paid $13 million to enter Riot Games’ NBA 2K. It is evident that significant interest among these professional sports teams exists.
It is hard to envision the magnitude e-sports might have in the future. However, based on recent revenues, future projections, and increasing interests, it could be tremendous. By all accounts, the e-sports games market is already a booming industry. But it may well be that e-sports teams will represent major urban markets just like other sports. And with its ease of communications outreach, e-sports could evolve into a truly global league network. If that happens, then e-sports games may surpass other sports leagues as we know them today.
