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In the year 2017, gaming video received more audience than the combined HBO, Netflix, ESPN, and Hulu audiences. The gaming industry has become the biggest earning sector in 2020 gaining revenue of 180  billion dollars more than the movies on sports.  Therefore in the future, we can expect E-sports to become bigger than the most prestigious sports in the world including the Olympics.  How does the E-sports industry work? What are the factors that we should focus on to keep the E-Sports industry in a better way?

How does the gaming industry operate?

People get confused with video gaming and E-sports,  but there is a difference between them,  where video game includes everyone who plays games using electronic devices,  on the other hand, E-sport is a special category of gaming where the players are involved and they compete against each other.  Here you need to focus on using your skills to win the game. 

Behind this industry, there are several stakeholders who invest their resources to get a good return in terms of entertainment, visibility, and moreover money. 

In total there are 11 major stakeholders in the industry.  The first stakeholder is the publisher and the second is the developer,  who brings the game to life.   They can be either in the same organization or share a principal-agent relationship where developers work for Publishers. There are companies like Epic games that develop and publish the iconic fortnight where is Pubg was developed by Pubg Corporation with multiple Publishers across the world. 

The third stakeholder is the  League.  They share a symbiotic relationship with Publishers.  The leagues get the asset from Publishers to do business and in return, they will give popularity for the game.  So that the publishers will receive fans, revenue, and visibility for the game they have published. 

mobile games

In terms of conventional Sports, Wimbledon uses tennis as an asset and attracts players like Federer and Nadal and they increase the popularity of tennis.   La Liga does this for football, NBA does this for basketball and IPL does this for cricket.  In E-sports we have the world E-sports league which is the Global tournament series organized by International E-sports  Federation and the League of Legends World Championship is a popular E-sport in 2021 with a peak viewership of 3.5 million. 

The fourth stakeholder is the players,  who play to gain the price money,  gain visibility and profile, and generate the sponsored interest.  There are two types of players in E-sports,  the small players play to get an identity, while the established players give identity to the game.  Gamers like Richard Tyler or Ninja are popular gamers,  Where when he plays a game,  that specific game will get popular.

Streaming platforms and broadcasters are the most influential stakeholders who help the league and the players to get directly in contact with the fans of E-sports.  Streaming platforms, we have got YouTube gaming and various others and in broadcasters, we’ve got ESPN. 

There is no entry barrier in the E-sports industry, therefore streaming platforms have become more powerful which even gives the normal video games a sensation of  E-sports.  The fans are the primary stakeholders who play and watch the games. 

The esports reached a level where fans not only watch esports content but also get engaged with the ads that gave an insane return investment to the sponsors. So when more fans came, there was more visibility, with more sponsors and more money. And this is how it operates. 

How does the industry work to get its fans? 

gaming industry

To have more fans, you need to consider two things. 

One is the accessibility to Esport. This is where the disruption happens in spite of being the most important attribute of gaming it is by default being limited by the existing business models. 

The second is the visibility to Esport. This is by the streamers who play these games and entertain and encourage the viewers. 

There are gaming giants like PlayStation and Xbox with popular games like Call of duty and Fifa, they made by selling CDs and recently through clouding. After buying them, you get subscriptions in-app purchases. 

To play these games customers will spend a large amount just to get the console and then spend another amount to get access to the game.   The number of people interacting decreased to a large extent because of the entry barrier. When there was more entry barrier there were fewer players with fewer viewers, less engagement, and less money. And so new Business models and new processing models came onto rising in the Esports industry. 

Esports

Call of duty was an iconic competitive game of the early generation that dominated the space for 10 long years in 2019 it earned 1.1 billion dollars.  Pubg entered in the year 2017 to 2018 earning 1.5 billion dollars and eliminating the entry barrier.  Call of Duty needed PC and Playstation to play but pubg accessible in mobile phones and it made money through in-app purchases and Advertising.  And this is why the call of duty launched mobile version and in just  one and half years it reached 500 million downloads 1 billion dollars by increasing its potential fans

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