Why Venture Capital Is Flowing Back Into Esports

The esports industry has been experiencing tremendous growth over the past few years, and it's not just the gamers who are benefiting. Venture capitalists have taken notice and are starting to pour money into the industry once again. In this article, we will explore why venture capital is flowing back into esports and what it means for the future of competitive gaming.

The Rise of Esports

Esports, short for electronic sports, refers to competitive video gaming. What was once considered a niche hobby has transformed into a global phenomenon with millions of fans tuning in to watch professional gamers compete in tournaments. The popularity of esports has skyrocketed, attracting both mainstream attention and big-name sponsors.

According to Newzoo, a market intelligence firm specializing in gaming, the esports industry generated over $1 billion in revenue in 2020. This figure is expected to grow by 15% in 2021, reaching nearly $1.15 billion. With such impressive financial numbers, it's no wonder venture capitalists are eager to invest.

The Esports Revolution: Why Venture Capital is Flowing Back Into Esports

by Pietro Moretti(Kindle Edition)

4 out of 5

Language	:	English
File size	:	9141 KB
Text-to-Speech	:	Enabled
Screen Reader	:	Supported
Enhanced typesetting	:	Enabled
Print length	:	89 pages
Lending	:	Enabled
Hardcover	:	254 pages
Item Weight	:	1.01 pounds
Dimensions	:	6.1 x 0.8 x 8.7 inches

FREE

The Potential for Monetization

One of the main drivers of venture capital investment in esports is the potential for monetization. Esports offers various revenue streams, including advertising, sponsorships, media rights, ticket sales, merchandise, and more. Companies have realized that the esports audience is highly engaged and willing to spend money on their favorite games and teams.

Sponsorship deals are particularly lucrative in esports. Brands like Red Bull, Coca-Cola, and Intel have all signed major agreements with esports teams and events. These partnerships provide exposure to a demographic that is traditionally hard to reach through traditional advertising channels.

Furthermore, media rights for broadcasting esports events have become highly sought after. Platforms like Twitch and YouTube Gaming have secured exclusive streaming deals, while traditional media outlets like ESPN and BBC have also started to cover esports extensively.

The Rise of Mobile Esports

Another factor contributing to the resurgence of venture capital in esports is the rise of mobile gaming. With the increased availability of smartphones and mobile data, mobile esports have gained significant traction. Games like PUBG Mobile, Clash Royale, and Arena of Valor have millions of players and dedicated esports scenes.

Mobile esports have the advantage of being accessible to a wider audience. Traditional esports titles often require powerful gaming PCs or consoles, which can be a barrier to entry for some. Mobile gaming, on the other hand, allows anyone with a smartphone to participate.

This accessibility has attracted venture capital investment, as investors recognize the potential for mobile esports to become even more mainstream than traditional PC or console gaming.

The Role of Technology

Technology has played a significant role in the growth of esports and the renewed interest from venture capitalists. Advancements in streaming technology, virtual reality, and augmented reality have enhanced the viewing experience for esports fans.

Virtual reality (VR) and augmented reality (AR) technologies are being explored to create immersive esports experiences. Imagine putting on a VR headset and being transported into a virtual stadium, complete with cheering crowds and interactive elements. These technologies have the potential to take esports to the next level and attract even more viewers and investors.

The Pandemic Effect

The COVID-19 pandemic has undoubtedly had a significant impact on the esports industry. With traditional sports events being canceled or postponed, many sports fans turned to esports as an alternative. This surge in viewership and engagement has further demonstrated the resilience of the esports industry and its potential for growth.

Venture capitalists recognize the value of investing in an industry that thrived during challenging times. The pandemic served as a wake-up call for many investors, prompting them to take a closer look at esports and consider it a viable investment option.

The resurgence of venture capital investment in esports is a testament to the industry's growth and potential for monetization. As the popularity of competitive gaming continues to rise, more opportunities for investment are emerging. Whether it's through sponsorships, media rights, or technological advancements, venture capitalists are betting on the bright future of esports.

The Esports Revolution: Why Venture Capital is Flowing Back Into Esports

by Pietro Moretti(Kindle Edition)

4 out of 5

Language	:	English
File size	:	9141 KB
Text-to-Speech	:	Enabled
Screen Reader	:	Supported
Enhanced typesetting	:	Enabled
Print length	:	89 pages
Lending	:	Enabled
Hardcover	:	254 pages
Item Weight	:	1.01 pounds
Dimensions	:	6.1 x 0.8 x 8.7 inches

FREE

The recent times have seen an influx of venture capital into esports. We explore the reasons behind why venture capitalists are backing esports with huge amounts of money (e.g. Bitkraft's US$180+m funds). What is so attractive about esports that attracts so much capital flow into it recently? This book aims to uncover that, as well as the basis behind investments into the esports and gaming sector.