The Business of Esports
How esports competitions are an opportunity for the AV industry.
Newly built arenas, colleges, advertisers and tech companies are paying attention to those who play and watch esports. Currently a $1B+ industry with projections to triple in the next two years, esports is here to stay, and here’s why you should pay attention.
The 2019 League of Legends championship had more viewers than the Super Bowl and the 2017 tournament generated $5.5 million in ticket sales. Esports has continued its rapid global growth with revenues exceeding $1 billion and reaching audiences of more than 443 million across the globe, according to research by Green Man Gaming. The numbers, according to the same Green Man Gaming research and a Forbes article on esports revenue, indicate that esports is becoming the most financially lucrative market thanks to the increased exposure and interest in major tournaments. If esports continues to grow at its current rate, total revenues could total $2.3 billion within three years, meaning it would financially dwarf traditional big-hitters like Formula One and the UEFA Champions League.
The increase in interest in esports is best shown in the new construction created for gaming that spiked in 2018.
|Venue||Square Feet||Cost||Year Built|
|Esports Stadium (Arlington)||100,000||$10 million||2018|
|Blizzard Arena (Los Angeles)||50,000||NA||2017|
|HyperX Esports Arena (Las Vegas)||30,553||$8.7 million||2018|
|Planet Oasis Esports Arena (Columbus)||30,000||$10 million||2018|
|Esports Arena (Oakland)||16,000||NA||2018|
|Esports Arena (Santa Ana, Calif.)||15,000||NA||2015|
|LCS Arena (Los Angeles)||14,000||NA||2013|
|The Fortress (Winter Park, Fla.) (University)||11,200||$6 million||2019|
|WMU Esports Arena (Kalamazoo, Mich.)||NA||$500,000||2018|
|Fusion Arena (Philadelphia)||60,000||$50 million||Complete in 2021|
These arenas have been built as part of other buildings, such as the Planet Oasis arena in Columbus. Others are standalone including the esports stadium in Arlington or are part of a college campus like The Fortress. These arenas often receive sponsorship from tech companies. Furthermore, arenas on college campuses have opened a new avenue for recruitment and further sponsorship.
The University of Akron built 5,200 sq ft. of gaming spaces in 2018. The University of California, Irvine built a 3,500 sq. ft. space in 2016. Currently, 175 colleges have official varsity teams in the National Association of Collegiate Esports League. 314 colleges have teams that officially compete in the Tespa chapter. Colleges are creating avenues not only for gamers to enter the stage but for themselves as well.
Michael Fay, Director of Akron Esports said: “By creating these physical spaces, where they [students] can get to meet each other and share their experiences around their favorite game, we think it’s going to contribute to a significant campus culture of mastery, a pursuit of excellence in any discipline.”
Though the University of Akron facilities cost was estimated around $750,000, some of those costs were smartly off-set by sponsorship deals, including one with Audio-Technica. The company supplied headsets for player stations as well as equipment for commentators and contributes about $5,000 in scholarships for varsity players and audio-engineers. Furthermore, the school had volunteer engineering and computer science students help to build the arena and will offer education and real world experience for students majoring in the fields of communication, graphic design as well as health and wellness. Though these arenas are being created for esports tournaments, they are allowing schools to create scholarships, educational courses and real world experience through their use.
According to a Learning Hub article, the esports market will have surpassed the $1 billion mark in 2019. Nearly half of that revenue comes from sponsors like Mountain Dew, Red Bull, T-Mobile, Audi and other big name brands. Next comes, media rights and advertising, then merchandising, ticket sales and game publisher fees round out the total esports revenue. This is all to say, there’s opportunities here. Colleges, AV technology companies and media companies can take advantage of the boom in esports to create arenas, teams, and cater tech to these players and those who watch them.