ISLE OF MAN DEPARTMENT FOR ENTERPRISE
The continued growth of eSports
Tony Ure, Head of e-Gaming, Isle of Man Department for Enterprise, looks at the meteoric rise of the eSports sector.
T
he eSports sector has been growing at a meteoric pace for the past few years and the trend shows no sign of slowing down. At the start of 2018, the value of the eSports market was approximately $900 million, a figure that should continue to rise
throughout the year. Also, with every passing tournament, the prizes get richer and the views increase. According to the Newzoo 2018 Global eSports Market Report, the global audience will reach 380 million this year, made up of 165 million enthusiasts and 215 million occasional viewers. The total number of viewers is expected to be closer to 500 million by 2020. So, there is no doubt that eSports will be one of the most
talked about sectors in 2018 and beyond. In this article, we discuss a few key themes in this exciting sector.
Interest from sponsors
Various factors have contributed to the exponential growth of eSports, but the interest from sponsors has been one of the most notable. A significant part of the sector’s revenue is derived from these sources. In fact, according to the Newzoo report, sponsorship is the highest grossing eSports revenue stream worldwide, contributing $359.4 million to the industry in 2018 compared to $234.6 million in 2017. Sponsorship deals are helping to push international competitions from a niche segment to full-fledged sporting events. For example, ESL, one of the world’s largest eSports company, has announced Vodafone as one of the sponsors for its multi-game event. According to ESL, this partnership enables it to deliver better events, better experiences for fans, and better facilities for the players. Furthermore, Intel has sponsored Intel Extreme Masters along with ESL since 2006. This is the longest-running eSports tournament in existence.
There is no doubt that eSports will be one of the most talked about sectors in 2018 and beyond
“ ” Virtual reality
Virtual reality platforms are being integrated into eSports to enhance the spectator experience. These platforms are based on a network of virtual cameras that records the full 360-degree range of footage and translates it all into an immersive viewing experience. This allows spectators to engage with the gameplay closely, enjoying new angles and viewpoints that weren’t possible before.
76 MAY 2018
It will be interesting to observe how the synergy between VR and eSports will affect viewership. There is an uncertainty around how significantly VR will change the way enthusiasts watch their favourite matches, but there is no doubt that the companies developing and experimenting with immersive technologies stand to gain from the eSports boom.
Skin-betting
Skin betting, also known as item betting, is betting on the outcomes of eSports matches risking in-game items known as ‘skins’ instead of cash. There have been on-going industry discussions on the issues related to skin-betting and various question marks have been raised over the robustness of the KYC checks. It has also been a way to facilitate eSports wagering outside the law. Clearly, operators of such sites who continue this activity in a regulated environment will look for a jurisdiction with a very strong reputation in player protection. The Isle of Man’s regulatory framework strikes a perfect balance between keeping crime out and supporting and nurturing innovation. In February 2017, the Island’s licensing structure was updated to cover the regulation of virtual goods. This requires applicants to set out a business plan in which they detail all in-game goods that they plan to use for betting. Following this update, the Isle of Man Gambling Supervision Commission granted a license to specialist eSports betting and fantasy league operator eSportsPools (ESP) in August 2017. According to ESP, this is the first step towards building a regulated market place that is safe for consumers, businesses, and investors.
Conclusion
The sector is expected to continue its growth trajectory, attracting the interest of new sponsors and audiences. This is creating a booming opportunity for all players involved. We are confident that it is in a strong position and is well-placed to soar to new heights. Newzoo predicts revenues of $1.4bn by 2020, however, I personally think that this is overcautious, and expect revenues to hit $3bn by
2020. This will be driven by increased streaming in Europe and the Americas, and by terrestrial TV catching on to this late-night programming attraction. The Isle of Man identified eSports as one of the key growth
areas and has been licensing high quality sites for more than three years, including industry leader UNIKRN. A new eSports operator
Rivalry.GG has just been licensed on the Isle of Man and there are further licensees in the pipeline. Hence, we remain very excited about the continued growth prospects of the eSports sector!
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