How can Esports bring new values into the global economics or business industries in the future?

The global computer game market is forecast to be worth $159 billion in 2020, around fourfold box office revenues ($43 billion in 2019) and almost 3 times music industry revenues ($57 billion in 2019).

Gaming revenues are almost entirely driven by consumer spending, but the business model has evolved significantly in recent years. Consumers today buy fewer games than in previous decades, but spend longer with those games, shifting the business model from single-unit to recurring revenue generated from a base of active users.

As a result, the industry is laser-focused on increasing engagement per user. Apart from making video games as compelling as possible, the strategy for doing so has been the adoption of in-game monetization opportunities. This extra downloadable content (DLC) can include expansion packs, new features, tools and characters, and “loot boxes”, which are effectively a lottery of virtual items.

This business model has been available in tandem with improvements to gaming hardware, bandwidth, and mobile internet, which have made high-quality games more accessible across devices and platforms. Indeed, on the brink of half (48%) of the industry’s revenue now comes from mobile gaming.

A separate part of gaming is esports, which refers to organized, multiplayer computer game competitions. This sector is forecast to grow to only over $1 billion in 2020. Business models in esports closely follow professional sports – though competitions are much more fragmented – with the bulk of revenue coming from advertising and broadcasting. Although relatively small as compared with the general gaming market, esports has relevance here because it appears connected to the continued growth of gaming.

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