Goldman Sachs believes eSports like Fortnite will be as popular as the NFL, as video gaming moves into the mainstream with a projected 300 million viewers by 2022.
Goldman has published a report in which it claims eSports are set to surpass Major League Baseball and National Hockey League viewership. Data from NewZoo suggests around 167 million people globally will watch eSports every month in 2018.
“The immense popularity of survival-based games like Fortnite, growing prize pools for eSports tournaments, the rise of live-streaming, and improving infrastructure for pro leagues have all paved the way for eSports to reach 300 million viewers by 2022, on par with NFL leadership today,” says the report.
Analysts believe eSports are moving into mainstream viewing. This could support audience growth of 14 percent in the next five years.
In January Disney announced a partnership with Twitch to bring content from key Disney-managed digital creators – Jacksepticeye, LuzuGames, Markiplier, and Strawburry17 – to the social video service.
Rise of eSports related to its increased infrastructure
eSports have been in existence for as long as the video game industry. However, it’s only been in recent years that they have appeared in mainstream culture. This has been attributed to a previous lack of infrastructure.
“That began to change in 2017,” says Goldman Sachs analyst Christopher D. Merwin. In 2017, Riot Games created the North American and EU League of Legends leagues. Then, in January 2018, Blizzard launched the Overwatch League. “These leagues cultivated the infrastructure to allow eSports to finally close the monetization gap relative to other established sports leagues.”
The opening of more eSports theatres and arenas will fuel the growth in this latest type of LBE. eSports will become a competitive event at the Asian Games, to be held in Jakarta this August. Kaisun has launched a Belt and Road eSports Festival which will target theme parks as ideal esports venues.
Huge increase in venture capital investment
Merwin says that venture investments in eSports are gaining momentum. He claims that there has been $3.3 billion venture capital investment in related startups since 2013. This year alone, he says he has witnessed $1.4 billion in investment – a colossal 90 percent increase in funding from 2017.
Tencent credited for increase in funding
Activision Blizzard Inc.’s Overwatch league’s playoffs attracted over five million viewers. The company signed a deal worth $90 million for streaming with Twitch.
The Overwatch League Grand Finals will take place in July in New York, at Brooklyn’s Barclays Center. Fans sold out the 20,000 seater stadium within a fortnight. It is set to be the largest eSports event to date.
Tencent Holdings is one of several companies investing heavily in online video platforms. The Goldman report holds Tencent largely responsible for the increase in funding for eSports. The company invested in the Chinese online video platforms Doyu (to the extent of $630 million) and Huya ($461 million)
Tencent is looking to develop a domestic $14.6 billion eSports business. The five-year plan includes a network of electronic gaming centres/theme parks that will be built across China.
Fortnite World Cup – Ready Player One
The video game making headlines at the moment is Fortnite. The free-to-play online battle royale style survival game features cartoonish graphics and over the top character emotes with an easy to understand format, making it fun to watch as well as play.
Epic Games have announced the first Fortnite World Cup will take place in 2019 and offered $100 million in prize pool for the first year, representing nearly the entire eSports prize pool last year. Fortnite earns more annually than any major console or PC games. The game had a peak of 3.4 million concurrent users as of February this year, according to an Epic Games spokesperson.
The Fortnite World Cup will run qualifiers on a merit basis where anyone can enter and potentially win by rising through the knock-out stages. The best Fortnite players and teams already have huge followings. Recently a 13 year old was signed to Team Secret. However, Epic have confirmed that they are going for a Ready Player One vibe with no pre-sale of places in the tournament to official teams. It seems that eSports may have an advantage in appeal over conventional sports, with the opportunity for anyone to become a champion.