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Esports market value forecast to hit US$6.8bn by 2027

A report from Grand View Research said strong sponsorship and the advent of 5G internet were among the key factors expected to drive strong growth in the sector over most of the next decade

Amazon.com, Inc. - Esports market value forecast to hit US$6.8bn by 2027

The global market for esports is expected to reach US$6.82bn (£5.45bn) by 2027, according to research, as video game popularity and rising awareness of the sport increase demand and audience interest.

A report from Grand View Research showed that the data correlates to a compound annual growth rate (CAGR) of just over 24%, with demand for “interactive, and high-quality gaming content” expected to extend the growth of the entire industry from small and large game developers to influencers who stream gameplay on platforms such as Amazon Inc’s (NASDAQ:AMZN) Twitch.

The research house said prominent brands were ensuring “long-term sponsorship” with top brands such as promoter ESL, which in turn led it to presume “strong growth of sponsorship segment over the forecast period”.

Esports is also attracting the attention of “celebrities and athletes”, which the report said could help the sector “attract a large audience”.

Some esports group are already securing celebrity backing for their efforts, with Guild Esports, part owned by investment group Blue Star Capital PLC (LON:BLU), having recently signed an association deal with football star David Beckham.

READ: Blue Star Capital portfolio firm Guild Esports signs David Beckham as new investor

Grand View added that mobile esports were expected to make significant inroads, particularly as mobile usage rose in developing countries, which will lead to higher viewership numbers.

Meanwhile, franchise and league game formats are predicted to broaden the horizon of the industry over the coming years, while streaming capabilities will be improved by the adoption of 5G mobile networks.

Faster mobile internet is also expected to “open growth avenues” for esports broadcasters such as Gfinity PLC (LON:GFIN), which hosts and streams esports events from its arena in London and has partnerships across multiple regions.

WATCH: Gfinity PLC's John Clarke talks new five-year deal with Abu Dhabi Motorsport Management

Grand View said China will play “a crucial role” in the development of an esports ecosystem in the Asia Pacific region, which is expected to lead global market growth over the next seven years.

 In terms of the industry’s key players, the report highlighted Chinese firm Tencent, which it said was “gaining the upper hand” in the esports sector through investments in several companies such as Riot Games Inc, the maker of League of Legends, Finnish group Supercell, creator of mobile game Clash of Clans, and Fortnite developer Epic Games.

Meanwhile, the report said Call of Duty owner Activision Blizzard Inc (NASDAQ:ATVI) was “at the forefront” in creating esports leagues and attracting professional players, broadcast partners and advertisers, while other significant players in the market include Electronic Arts Inc (NASDAQ:EA) and Nintendo of America Inc.

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