Esports is the fastest growing theme in the gaming industry and is expected to generate $1.8 billion by 2025 according to GlobalData’s market forecast.
With growth in both viewership and revenue, esports has become a major disruptor and competitor to traditional sports and the wider entertainment industry. This has been reinforced by advances in 5G and AI, which are constantly evolving to help drive participation and accessibility for users around the world.
A pilot at the Birmingham 2022 Games
This summer, esports was introduced to the Commonwealth Games for the first time in history. Co-funded by the Commonwealth Games Federation (CGF) and the Global Esports Federation (GEF), the non-medal winning event invited over 100 athletes to compete in three select video games. Although the pilot was labeled a success by the CGF, the esport will not feature in the 2026 Commonwealth Games, which will be held in Victoria, Australia.
Rumors suggest that this decision may be due in part to the increasing use of prescription drugs, particularly Adderall, which has become a widespread problem in many competitive gaming competitions. Adderall, originally prescribed to treat attention deficit hyperactivity disorder (ADHD), is used by gamers to increase alertness, reduce reaction times and help focus attention. While non-prescribed use of Adderall is banned in professional sports, performance-enhancing drugs are still unregulated in the esports and gaming industry.
Interest in esports is booming
The esports industry has grown from a relatively niche activity watched by a small number of spectators to large organized events with growing opportunities for marketing, sponsorship and big rewards. Countries in the Asia-Pacific region, such as China, Japan and South Korea, dominate the market, having been the first to legitimize it as a sport and to be proactive in developing the infrastructure to foster talent and a fanbase. However, mobile esports will also provide new opportunities for companies in less developed esports markets to strengthen their position, bolstered by increased connectivity globally in the years to come.
Gameplay monetization will also create new revenue streams. In-game monetization models in the form of non-fungible tokens (NFTs) will explode, making it easier for professional gamers and esports athletes to earn revenue from their global audiences. An alignment of crypto companies with esports teams and leagues could even allow esports athletes to earn more than many athletes in the traditional sports industry.
Esports – just a generational fad?
The athlete demographics of esports, like gaming, are concentrated around the younger generation. This specific demographic concentration means that many don’t take the gaming industry seriously, which means a backlash against its non-traditional nature is gaining momentum. Additionally, the sedentary lifestyle of esports goes against the traditional spirit of the Olympics in promoting physical activity.
However, the Olympics have made progress in attracting the younger generation by including a wider variety of sports, including surfing, skateboarding and breakdancing. Seventeen US colleges now offer athletic scholarships for competitive players, a trend that is expected to expand to other colleges and countries in the future. This will create a new generation of professional gaming athletes over the next few years. The changes to the Paris 2024 Olympics may be too soon, but who knows what LA 2028 may bring.