eSports, for all its popularity in internet circles, is still something of a niche concern as far as mainstream business and its popularity goes. It’s an enormous industry, forecasted to break $2.2bn by 2022, and attracting names like Coca-Cola, Formula 1, Audi, and even ‘traditional’ sports teams like FC Barcelona – but does any value remain for start-ups in eSports or has its potential already been gobbled up?
eSports Investment
Getting in at the top is just as difficult in eSports as it is in any industry. However, novel ideas in marketing, technology, and media rights have proven a honey pot for smaller businesses in competitive video gaming. For instance, Russian venture Play2Live managed to attract investment of more than $2m in 2018 during its initial coin offering, which promised a decentralised streaming platform, using blockchain.
Source: Pexels
Big Data, the buzzword of the late 2010s, has what many might consider an unexpected use in eSports – coaching. Inevitably, gamers have to master their chosen title to compete at a professional level. Bayes Holding (previously, DOJO Madness) is aiming to break the eSports scene by providing analytics and visualisations to players and their mentors, including software that can ‘see’ opponents’ tells and patterns.
Grassroots Teams
Players are often central to many eSports startups’ business model. French brand Galibelum provides an intermediary between players and sponsors, earning money from its customers on a membership basis. While Galibelum works mainly with professionals and major brands, there’s definitely an opportunity in using such a model to help more grassroots teams escape their respective bedrooms. Sponsorships don’t always come from corporations, after all.
Of course, as a sport, several companies have found success in offering betting markets to consumers. Winners.bet, a Malta-based platform, supports eSports betting on Call of Duty, Dota 2, StarCraft 2, Overwatch, and several other competitive video games. While these kinds of bets mostly focus on individual match-ups, the extensive eSports tournament scene allows for year-round betting, unlike many conventional sports.
Source: Pexels
Market Challenges
For start-ups, though, there is always a risk associated with new technologies and industries. After an initial interest boom in eSports in 2017 and 2018, TechCrunch noticed a slump in financial investment around the turn of the decade. However, as a sector based almost entirely around emerging technologies, not to mention a brand new form of entertainment, eSports is bound to experience frequent market challenges favouring the more nimble start-ups.
Agility and a business’ overall responsiveness may indeed be critical to success in eSports. New management and marketing companies inevitably take a bet on their team’s fortunes when they partner, and will need to cope with both good and poor performances, dropped players, and financial struggles. There’s also the concern of being priced well out of the market by competitors in high-profile tournaments. The ability to find that lucrative niche is therefore essential.
Overall, eSports remains a fertile plain for start-ups, with future opportunities likely to come from within the AI and blockchain sectors.
