COVID-19 and esports: Necessity catapults gaming into the mainstream

With sporting events across the globe cancelled in the wake of the COVID-19 pandemic, esports and gaming have seen a rapid rise in popularity as people look for alternative entertainment.  

The increased popularity is filling a social void as much as bringing entertainment into many homes. Online gaming is allowing people to still connect with each other - even in lockdown - through major titles such as League of Legends, Call of Duty and FIFA, or through broadcast events. A recent PwC survey of 2,000 people revealed that just under half of participants are now playing or watching gaming content each week. This increases further for younger age groups, with more than two-thirds of under 35s playing or watching gaming content. 

With more than half of under 35s open to watching gaming or esports, in the absence of traditional sport, it’s no surprise that more mainstream organisations are turning to virtual competitions to appease fans, media and sponsors, and supplement lost revenue. The Grand National, Formula 1, Moto GP, the Spanish La Liga football league and NASCAR have all run online events, with many broadcast to millions on TV or streaming services. The Premier League, working with Gfinity, have launched an inaugural ePremier League Invitational Tournament to fill the void in schedules.

The rise of esports is a trend that we’ve tracked for several years in our Global Entertainment & Media Outlook. From a niche global market worth US$194m in 2014, esports revenues leapt to US$980m in 2019 and were projected to rise to almost US$1.8bn by 2023. But this was before COVID-19. Now, this projected figure looks understated.

With esports catapulted into the spotlight, it will be interesting to see what comes next.

What will come next?

How do esports businesses build on this growth?

A post lockdown esports market is likely to attract increased levels of investment and commercial partners. Some will be new to the industry and desperate to get involved. Esport companies should look to demonstrate to investors a maturing market over the next few months, supported by competent and strategic management teams to drive this. Not only will this blow away some misconceptions, but it will also help unlock a new set of investors, brands and sponsors that have not been available until now. 

A clear, solid business plan is one way that organisations can build upon this unexpected opportunity. Esports organisations that know - and can show - what their strategy is and where their business is going will succeed. Franchising still appears to be the desired path for many investors. An ability to show business acumen, financial control and long-term objectives are likely to impress investors, particularly when underpinned by a strong management team. 

Showing an empathetic response to a difficult situation

While the esports industry should rightly enjoy its time in the spotlight, it’s also important to be aware of the situation that’s created this opportunity. Retailers and publishers, for example, will likely see huge 2020 results, as will streaming services like Twitch. These companies need to think about how they manage that financial performance and consider how their successes have come against the struggles of many others. 

There’s an opportunity for organisations to show their genuine empathy for this unprecedented scenario, and we are seeing this in action.

The industry has reacted to show some corporate responsibility. Some streamers have created a fund to help fight COVID-19. Twitch is running government pop-up ads to support the NHS. Others are using their power and influence to push the industry on its sustainability goals. Humility may prove to be very important.

What does the post-COVID-19 landscape hold for esports? 

While it’s too early to say, this could be a defining moment for esports. It’s unclear the extent to how much interest will stick when live events can take place again and lockdowns are lifted. But those organisations that work strategically over the coming weeks and months will create a solid foundation from which they will be well-positioned to reap the rewards.

Contact us

Andrew Fahey

Andrew Fahey

Esports Specialist, Director, PwC United Kingdom, PwC United Kingdom

Tel: +44 (0)7738 845455

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