Education, Pro AV and Gaming: Reassessing the Esports Landscape after COVID-19; Futuresource Reports
Esports has come a long way from its reputation as being a niche hobby for teenagers.
In recent years, esports has rocketed into a multi-billion-dollar opportunity, spanning multiple industries and garnering audiences on a global scale.
Sponsors and publishers are ramping up their contributions, and Futuresource expects to see a positive outlook for the industry over the next five years.
Esports has come a long way from its reputation as being a niche hobby for teenagers. In recent years, esports has rocketed into a multi-billion-dollar opportunity, spanning multiple industries and garnering audiences on a global scale. From 2019 to 2020, revenues grew by 5%, and the following year, they jumped by another 17%. Sponsors and publishers are ramping up their contributions, and Futuresource expects to see a positive outlook for the industry over the next five years.
What’s driving the growth of the esports industry?
Audiences are flocking to esports competitions, which is certainly helping boost revenues. As well as this, esports organisers are also streamlining outgoings and accepting more advertisement deals. With online-only events taking off during the pandemic, organisers are feeling the benefit of having reduced costs.
There’s been some talk that the esports opportunity has been overhyped, but the industry has achieved consistent growth since the pandemic. The number of fans is expected to continue to rise through 2027, fuelled largely by growth in emerging markets. It’s an industry breaking into the mainstream, which means CMOs are becoming wise to the opportunities available. Even industries like education, which have traditionally resisted mass digitisation, are embracing the possibilities of esports.
Education
Esports is already a popular hobby among students, but now it's increasingly breaking into the curriculum of schools and universities. Over 60% of middle and high schools in North America will see esports appear on student timetables. As more colleges open esports scholarships and training programs, this number will only increase. In the long term, hardware vendors will experience increasing demand to supply elite equipment and upgrades.
Esports is also bleeding into academia, with dedicated esports research facilities cropping up at the Harrisburg University of Science and Technology, the University of Limerick, and the University of Augsburg. Some notable journals, like The International Journal of Esports, the Annals of Esports Research and the International Journal of Esports, have also emerged.
Academics are increasingly concerned with how the boundaries of esports performance can be pushed. Unsurprisingly, AI appears to be the answer. AI enables universities to efficiently derive insights from various data sets. Considering the revenue potential of world class gamers, equipment associated with research is expected to remain a leading investment area. With esports as a new area of academic interest, universities are consequently shifting their purchasing priorities.
Professional video
For professional video, the esports landscape looks very different in the post-COVID world. Before the pandemic, fans would fill out arenas for esports tournaments and events. But of course, the pandemic changed everything, and the industry moved entirely online. The effects of this still linger, and the impact across professional video has been pronounced.
Production houses began laying off staff, and many of the arenas that used to house esports events began a conversion into multi-purpose facilities. The technology landscape also shifted, with webcams and pro PTZs becoming the go-to video technology. The emphasis is now on remote production: Riot recently opened a remote esports production facility in Ireland with Gravity Media and went on to produce a Latin American VALORANT event from this facility.
COVID-19 obviously drove a wedge through the market for in-person esports events. As a result, there’s a lot less demand for full-size pro video kits. That being said, prime esports events will return to their previous glory – like, for example, 2022’s League of Legends World Championships, which was held across four cities and saw the return of an 18,000-strong live audience.
Demand for pro video equipment hasn’t disappeared, but it has pivoted. Large esports production companies are keen to raise the production value of both in-person and online-only esports events. To achieve different effects, organisers are exploring the use of various camera types and positions during live production. For instance, cinematic cameras can create a shallow depth of field, while pro PTZs may be placed in positions inaccessible to camera operators. Plus, the use of cameras with LED volumes is expected to drive demand for virtual production studios, especially for online-only events.
Gaming
The PC has long been the device of choice for esports tournaments, and despite all the turbulence of the pandemic, this remains largely unchanged. In 2022, PCs were the primary gaming platform in 57% of global esports events. But there is emerging competition, as in China especially, gamers are increasingly reaching for mobile gaming devices. Mobile gaming penetration rates in esports climbed from 23% in 2019 to 27% in 2022 and will continue to grow its share in the esports market. Console gaming remains a more niche platform, despite the launch of next-gen consoles in 2022.
For esports competitors, the PC won’t be going anywhere. Input lag and precision control – concerns that are rife among gamers – are generally less relevant on PCs than on other devices. Plus, online hosting and streaming are much easier to accommodate.
The low barrier of entry to mobile gaming and advances in smartphone technology have introduced more gamers to titles like Call of Duty: Mobile, PUBG Mobile and Clash Royale – which will help mobile gaming continue to grow. The use of consoles in esports competitions is also expected to grow. More console-exclusive games are hitting the market, and console makers are working to improve online connectivity and broadcasting capabilities. This will enable consoles to improve their standing in the esports industry.
Pro audio
In the esports industry, professional audio equipment revolves around in-person events. When the COVID-19 pandemic reared its head, the industry faced a lot of challenges, resulting in a 77% decline in the market in 2020. In response, the market pivoted towards virtual production and online events. The slightly improve the situation for pro audio equipment in esports, as it drove demand for equipment such as mixing desks, headsets, and microphones, resulting in revenues of $21 million for 2022.
Undoubtedly, the sector was tipped on its head, and the trend towards online-only events won’t be going away anytime soon. Dedicated remote production facilities are going to continue to pop up, which provides global reach to what would have previously been localised events. Online events have also generated new fans, which has in turn helped nurture demand for events – both in-person and remote. Audiences expect good quality tournaments, which will maintain a need for pro audio equipment in esports.
As the market recovers and confidence in hosting live events returns, pro audio will see continued opportunity. However, the cost issues haven’t disappeared, which means events generally require smaller and/or less expensive PA systems, driving down the typical spend on pro audio for venues and studios.
The future of esports looks bright
The pandemic era brought its fair share of challenges, but the prospect for esports looks strong. Although growth is slowed, the number of esports tournaments is expected to climb, and opportunities will continue to present themselves in the years to come.
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