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When reading about the economics of esports, sitting in a keynote speech at an esports business conference, or seeing a main stream media segment on the esports industry, it’s inevitable to come across numbers, studies, and observations that are supposed to prove the rapid growth of the economic footprint the esports ecosystem generates. The Esports Observer has tracked $1.57B USD in disclosed investments and 117 overall investments year-to-date in the esports industry, showing the added financial resources which support companies to further advance the industry.
While this information can provide great value to underline the potential of the industry, a new set of questions arise when trying to understand the economic aspect of the esports phenomenon on a deeper level to take action as a market participant. Often a first touchpoint for non-endemics with the esports industry are the investments into it. The esports ecosystem as a whole is a global industry, nevertheless it’s a well-placed bet to assume not every geolocation is an equally profitable market to invest into esports.
A survey conducted by Foley & Lardner LLP and The Esports Observer asked 200+ decision-makers about their opinion on which geographical regions they think offer the most promising investment opportunities.
Source: Second Annual Esports Survey – Foley & Lardner LLP, The Esports Observer
According to this research, the U.S., China, and India are expected to grant the best esports investment opportunities over the next five years. The list of those top three countries correlates with the top three highest populated countries in the world (in different order: 1. China, 2. India, 3. U.S.), a coherency that could suggest that esports is, in its current state, a number’s game in which an investor’s timely return on investment (ROI) is dependent on a large potential market.
Furthermore, this survey found that 47% of participants anticipate increased investment activity from private equity and venture capital firms over the next year, an indicator of a sector that’s maturing and becoming attractive to more investors looking for big paydays. At the same time, 47% also expect traditional professional sports teams and leagues, athletes, and celebrities to increase investments, down from 57% in 2018. Rather than a sign of bearishness, this shows traditional sports has made a big play in esports and will likely continue to do so. In fact, among respondents who believe that traditional sports will increase investment in esports, 88% think they will do so to a significant or moderate extent.
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The full survey report can be downloaded for free. The Second Annual Esports Survey by Foley & Lardner LLP and The Esports Observer summarizes the outlook of more than 200 executives (primarily esports and traditional professional sports teams and leagues, media companies, agencies, and industry consultants) on the future development of the esports industry.
Don’t forget to come and meet Foley & Lardner and The Esports Observer at the 2019 Lagardère Sports Esports Rising in Marina del Rey, California, and discuss ideas, strategies, and opportunities. The two-day conference starts in two days on Nov. 14.
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