With an increasing demand for data-driven analysis and audience engagement improvements, blockchain technology could be a contributing factor to the overall improvement of the esports market. The global esports industry has grown into a multi-million dollar industry at a tremendous rate in recent years.
According to a report published by Newzoo, global esports raised $906 million in revenue for the year 2018. In 2016, this figure stood at $493 million, jumping to $655 million in 2017, a year-on-year growth of +38.2%. So, what is esports? Also, what happens when esports market and the blockchain industry collide?
Esports is booming
Esports refers to competitive gaming organized for professional players. Just like traditional sports, there are qualifications, finals, championships, and so on. Esports works just like traditional sports, as the sport becomes popular, more people play or tune in to watch live or online, and the games grow.
The esports landscape incorporates a few different entities – publishers, events & their organizers, teams, and fanbases. Esports generates revenues from sponsorships, advertising, selling media rights, publishing, and tickets and merchandise sales.
Firstly, sponsorships are driven by tech and gaming peripheral companies such as Intel and SteelSeries, making it the largest contributor. Secondly, advertising revenues from computer components and energy drinks such as Re companies. Thirdly, Twitch and YouTube Gaming pay to own the rights to broadcast live games. Fourthly, game publishers such as Valve pay to host tournaments. Lastly, tickets and merchandise sales also generate significant revenues.
At the moment, esports needs more to grow by 2021. Many brands invest a total of $694 million (77% of the total market) into esports in one way or another. This amount is expected to grow in 2019, elevating the market to $1 billion in revenue.
How blockchain can usher in a new era in the esports market
Blockchain for esports would deliver a fully transparent environment. Also, the ease and transparency of financial operations would increase drastically. In the long run, the majority of the content that would be available on the blockchain-based esports platform would be open-sourced. Also, players would be ranked and earnings would be calculated based on their popularity.
The esports blockchain platform would act primarily as an underwriter for distributing the allocated funds. Leveraging the power of blockchain technology, smart contracts would guarantee the platform users automated tracking of their performance on the esports arena.
The player’s activities would play a part in their overall rank on the world stage. Once a player has become an influencer on the platform, he can begin to benefit financially from his influence. This would resolve the complex issues of cooperation among sector players. Revenues in the esports market would then cease from being centralized among a few individuals, and become decentralized for the entire industry.