When I was a little kid, if you wanted to play a video game with your friends, you had to go to their house and share the PlayStation or Nintendo 64. And nobody wanted to be the one watching if there weren’t enough controllers.
Things have changed since then, and this change is part of one of the largest technological revolutions that nobody’s talking about.
When people think of new gaming trends, it’s typically virtual or augmented reality, where the world around you is transformed into the video game. But there’s an entirely different facet of gaming that’s beginning to break out: esports.
A New Kind of Sport
With the constant increase in internet speed, especially on mobile devices, esports have charged onto the scene, attracting hundreds of millions of viewers for single gaming events.
Esports are not like traditional sports. Rather, they consist mainly of online video game competitions. And the data shows that these broadcasted gaming tournaments draw a lot of viewers:
In 2017 alone, 25 million or more people tuned in to watch four different contests, the most popular being the annual Intel Extreme Masters, a series of gaming tournaments held all over the world, which pulled a record 46 million viewers.
That’s almost half as many as the 103 million people in the U.S. who watched this year’s Super Bowl.
And when you consider that just 2 million of those watched the Super Bowl online, it’s even more impressive; a large majority of esports are watched over the internet rather than cable.
However, cable is seeing some growth in the area as well:
Who thought that someday, hundreds of thousands of people would be watching a video game being played by other people over a major television network?
2017 was a huge year for that very thing, as those top five events in the chart above drew almost 1.5 million viewers on big networks like ESPN and TBS.
All of what I’ve described so far with esports has had to do with large, organized events of professional gamers. But now, a platform called Twitch has brought this ability to anyone playing a game in the comfort of their own home.
With Twitch, you can record your own gaming session and broadcast it live for the public to watch. And the viewers continue to pile in.
For example, as I write this, over 242,000 people are watching live “Fortnite” streams, and over 231,000 are watching people play “League of Legends,” which has been one of the most popular games for years. (It’s referenced in the first chart as LoL.)
But not all esports are your typical video game broadcasts. Another huge one is the DRL (Drone Racing League), which was founded in 2015.
Unlike most video game events, the DRL is broadcast on ESPN, and it has drawn a huge crowd since its inaugural season just two years ago. Its first season was a bit of an experiment, as nothing like drone racing, or esports in general for that matter, had ever been signed to an entire season on a major television network.
But the gamble paid off for ESPN, as 75 million people tuned in to watch the DRL in 40 different countries in its first season. Season 3 is set up to start this September, and will be broadcast in 87 countries around the world.
Major League Gaming
There are also large organizations that host esports tournaments all over the world. One of the most prominent is MLG (Major League Gaming), which has been around since 2002.
MLG was one of the pioneers in its trade, as it became the first televised gaming league in the world in 2006. It hosts tournaments in some of the most popular games around, such as “Call of Duty,” “World of Warcraft,” “Halo” and “Overwatch.” These tournaments are viewed by hundreds of millions of people every year.
In fact, this past January, over 10 million viewers watched the Overwatch League, and that was just the first round.
The league extends all the way through mid-July, so this was a very promising start. Not to mention that 2018 is the inaugural season for the Overwatch League.
Ten million viewers for the first week of the first season of a new esports league: Not too bad.
Invest in Esports
There are ways to invest in this rapidly growing industry. One of the best ways to invest right now would be through Activision Blizzard Inc. (Nasdaq: ATVI).
It bought MLG back in 2015, and since then it’s seen exponential growth.
Activision Blizzard also puts out some of the most popular games in the world today. In addition to the aforementioned “Call of Duty,” “World of Warcraft” and “Overwatch,” it publishes well-known titles such as “Destiny,” “StarCraft,” “Diablo” and “Candy Crush,” and it has a commanding 21% market share of the global entertainment software industry.
Internal Analyst, Banyan Hill Publishing
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