When you invest, your capital is at risk.


Game Changer

Gaming has grown into a huge category of the entertainment industry. So it’s no surprise that the popularity of esports is challenging traditional sports.

As soon as computing technology brought us video games, the idea of competitive gaming quickly followed. In 1972, Stanford University hosted the ‘Intergalactic Spacewar Olympics’, and by 1983 the U.S. already had a professional team.  

In the 90s, home consoles proliferated and spurred the movement, but it was the leaps in the processing power and affordability of PCs that really boosted gaming tournaments. Internet connectivity and Local Area Networks cemented the focus on player-versus-player dynamics (as opposed to high score comparisons), fuelling the competitive nature of the events. 

The term ‘esports’ goes back to the founding ceremony of the Korean e-Sports Association in 2000. South Korea built many internet cafes as part of a drive to establish IT infrastructure, and the nation’s enthusiasm for StarCraft by Blizzard was key in solidifying the trend. 

Cut to 2022 and the global esports market was valued at around US$1.38b, with sponsorship and advertising estimated to account for US$837.3m of that total. At the latest Asian Games, the honours for esports medallists were the same as for other athletes – and demand was so high that a lottery was set up to sell tickets. In 2020-2021, American colleges awarded over US$16m to students for esports scholarships. 

Esports fans can generally view events through YouTube ($GOOG) and Twitch ($AMZN). This emphasis on online streaming rather than traditional TV broadcasting is positive for the global reach of esports, but it also means they don’t benefit from the same earnings from media rights as traditional sports – which amassed a global total of US$55.1b in 2022. 

There are also signs that, despite that ease of access, viewership is now stagnating. Some are concerned that these growing pains will alter the shape of the industry. Esport teams haven’t attracted the same attention from billionaires either, with the value of other sport franchises being inflated as trophy assets.

However, there’s still significant capital behind gaming. Riot Act’s League of Legends and Epic Games’ Fortnite – subsidiaries of Tencent ($TCEHY) – remain wildly popular. The takeover of Activision Blizzard by Microsoft ($MSFT) has been the biggest deal to date in the sector. Meanwhile Saudi Arabia has announced an Esports World Cup with the largest prize pool so far for 2024. The next stages might get tougher, but it’s definitely not game over for this industry yet.


Want more?

You know what to do

Insights, trends and company deep dives delivered straight to your inbox.

Stake logo
Over 7,000 5-star reviews
App Store logoGoogle Play logo

Subscribe to our free newsletters

By subscribing, you agree to our Privacy Policy.

Stake is the trading name of Hellostake Limited, a company registered in England and Wales (Company no. 11676409). Hellostake Limited is authorised and regulated by the UK Financial Conduct Authority under the Firm Reference Number 830771. Registered address: 85 Great Portland Street, London, W1W 7LT, United Kingdom.

When you invest, your capital is at risk.

The value of your investments can go down as well as up and you may receive back less than your original investment. Any advice is of a general nature only. As investments carry risk, before making any investment decision, please consider if it’s right for you and seek appropriate independent taxation and legal advice. The information on our website or our mobile application is not intended to be an inducement, offer or solicitation to anyone in any jurisdiction in which Stake is not regulated or able to market its services.

At Stake, we’re focused on giving you a better investing experience but we don’t take into account your personal objectives, circumstances or financial needs. Please view ourTerms & Conditions,Privacy PolicyandDisclaimers before deciding to use or invest on Stake. By using the Stake website or service in any way, you agree to our Privacy Policy and Terms & Conditions. All financial products involve risk and you should ensure you understand the risks involved as certain financial products may not be suitable to everyone. Past performance of any product described on this website is not a reliable indication of future performance

Copyright © 2024 Stake. All rights reserved.