Part II of our two part up close look at Esports on the back of the recent Esports World Cup (EWC) held in Riyadh, Saudi Arabia. Here’s Part I from last week, in case you missed it.
Esports is big business, rivaling the traditional sporting realm in both its audience size and financial stakes. For context, according to Statista in 2022 boasted an audience of 530 million viewers. According to some estimates, that is bigger than a lot of sports, including Baseball, Golf and American Football. Importantly, Esports audiences tend to be much, much younger.
While there are significant challenges around the financial models of Esports, there is no denying the cultural influence of Gaming. Perhaps it’s pro tier still has potential to be unlocked.
The EWC was a monumental event: 22 tournaments across highly celebrated games, boasting an impressive prize pool of $60 million.
According to Escharts, the EWC amassed 12.5 million viewing hours across streaming platforms. And that is across 500 million viewers according to officially released numbers, underscoring the immense pull of esports.
The tournament reached its peak on opening day, attracting 1.2 million viewers, and held a steady average viewership of 560k throughout the event. This engagement signals healthy interest in esports, and perhaps solidifies its presence alongside other professional sports.
The crossover between Sports and Gaming has been spoken about ad nauseum, but not so much about the tech crossover.
Interactive layers driving fan engagement, multi-modal gathering of fan data, diversified revenue streams – all of these aspects, and others, are crucial to the growth of Esports. And by the way, all the same challenges that any new sport faces while figuring out how to monetise their fan base.
Maybe this is the shift in perception is they key. Instead of looking at Esports as a ‘has been’, the significant Saudi investment has given it a second wind. That points to the potential that could yet be unlocked by a sport that still has a big say on the global sporting stage.
At the core of this exponential rise stands the rise of Sports Tech. As capital flows steadily into this sector, Sports Tech is fundamentally altering how esports is played, experienced, and administrated.
Funding Over the Last Five Years
Analyzing the data from 2019 through 2024, the eSports sector within SportsTech has demonstrated consistent inflows of funding, with 2019 being the pinnacle, attracting a remarkable $710 million to know more about each year funding scale check on SportsTechDB.
Investment by Sector
The esports industry has magnetized substantial financial backing, spanning the three primary pillars of the SportsTechX Framework: Fan engagement, Activity Performance, and Management & Organization. A majority of the capital (72%) has been funneled into fan engagement and content management, followed by management & organization (16%), with performance enhancement initiatives receiving the remaining 12%. This allocation highlights the industry’s paramount focus on creating superior content platforms and cultivating deeper user engagement, as the esports fanbase continues to expand exponentially.
Fans and Content
Douyu TV and Huya reign supreme in the fan engagement sector, securing significant funding in the past two years. Douyu TV—, a live streaming media platform that provides live content such as games, sports, variety shows is dominant force, has amassed $1,128 million, contributing notably to the overall SportsTech esports funding, while Huya — a chinese Esports streaming platform trails with an impressive $863 million.
Activity and Performance
In the realm of activity and performance, Shadow—a cloud-based gaming platform designed to optimize performance—has raised $104 million. Gloot, an esports platform enabling players to hone their skills and earn money while gaming, has followed closely with 103 $m. Other noteworthy players in this category include Aim Lab, an aim-training platform, and OP.GG, an esports statistics provider.
Management and Organization
Genvid Technologies and PlayVS emerge as key players in the management and organization category. Genvid, with its suite of software tools for interactive esports streaming, primarily in media production, has raised $166 million. PlayVS, known for its collegiate esports league, has garnered $96 million to date.
Global Growth
Esports’ global proliferation has led to robust investments in key markets around the world. China claims the top spot for esports-related SportsTech funding, amassing over $2.6 billion, with the USA close behind at $2.5 billion. Major U.S. hubs like San Francisco and New York continue to drive this growth. Other markets of note include India, the UK, and France, all underscoring esports’ worldwide appeal and immense growth potential.
China’s dominance can largely be attributed to platforms like Douyu and Huya, which cater to the nation’s massive gaming audience. Meanwhile, the USA remains a competitive market, bolstered by strong infrastructure and technological innovation, with companies such as Discord playing a pivotal role in fostering community engagement.
The Future of Esports and Sports Tech
As esports continues its meteoric ascent, SportsTech’s role will only grow more crucial in sculpting the future of the industry. Innovations like virtual reality (VR) and augmented reality (AR) are already being woven into the fabric of esports, offering players and spectators alike increasingly immersive experiences. Additionally, breakthroughs in artificial intelligence (AI) and data analytics are expected to further refine how players prepare and compete.
The integration of SportsTech into esports has revolutionized the industry, driving innovation in performance optimization, fan engagement, and content distribution. With billions of dollars flowing into pivotal sectors and regions, esports now stands shoulder to shoulder with traditional sports in terms of influence and future potential. As technology progresses, SportsTech will remain a key catalyst for growth, ensuring that esports continues to captivate and expand its global fanbase.
