Billion-Dollar market E-Sports and Gaming

Billion-Dollar market E-Sports and Gaming

16 April 2021Reading time: 2 minutes

The former niche market of e-sports and mobile gaming has become a billion-dollar industry. More and more innovations, more and more technical possibilities, increasing spectator numbers and growing interest from sponsors are driving the industry - and should continue to offer growth opportunities in the future. This could also open up interesting opportunities for investors.

The past few years have been characterized by steady growth for the e-sports and mobile gaming industry. Like so many other sectors, e-sports was not spared from the Corona pandemic. The worldwide introduction of lock-downs and restrictions have led to a change in supply - but consumer behavior has also changed. The absence of traditional sporting events has, in some cases, brought e-sports into closer focus. Despite the shift, the industry is expected to continue to see respectable growth in subsequent years. According to NewZoo, a market research organization in the e-sports field, global revenues are expected to increase to around 1.1 billion USD in 2021, representing a year-on-year growth of around 14.5%. What was once a niche market has become a billion-dollar industry.

What is e-sports exactly?

Electronic sports, or e-sports for short, are about individuals or entire teams competing against one another, just like in classic sports. The difference, however, is that the competitions take place virtually. Equipped with controllers, screens and nimble hands, professional players compete to emerge victorious from organized competitions and win prize money, some of which can rival that of traditional sports.

In principle, any computer game can be played and contested, be it strategy games or classic sports games. The various e-sports players and teams can therefore take part in the competitions not only in one game, but in any game. Consequently, a wide variety of national and international teams and leagues have formed in the meantime, which compete with each other just like in competitive sports.

Sponsoring

The largest share of the huge market volume that has opened up in the area of e-sports and mobile gaming comes from sponsorship and media rights. Many companies have discovered e-sports and mobile gaming as an opportunity for sponsorships. Because in the virtual world, a target group can be covered that is otherwise very difficult to reach: millennials. This is because in the digital space, they often shield themselves with ad blockers, and with traditional advertising - such as TV commercials - they are also unreachable. E-sports and mobile gaming therefore open doors for companies: access to a popular target group.

Rising spectator numbers

E-sports is also particularly popular with viewers, however, with the global number of live-stream viewers growing rapidly. This trend has been accelerated by the global Corona pandemic. This increase will return to normal until a few years from now, but according to NewZoo, the increase is likely to remain in double digits in developed countries over the next few years.

The growth potential of the e-sports and mobile gaming sector could also open up interesting opportunities for investors. For this reason, Vontobel has launched certificates on the Vontobel E-Sports and Gaming Index. The actively managed index includes shares of companies that are active in the gaming and e-sports sector. This includes cloud gaming, chip manufacturers, game developers as well as equipment, gaming technology and video streaming. Vontobel investment specialists analyze a wide range of gaming stocks and include the most promising ones in the index. The index is calculated as a performance index, i.e. dividends are reinvested on a net basis.

 

  
19/05/2021 01:32:14

 

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