2018 is done, gone, and on the record as the biggest year we’ve seen in esports yet — with viewerships, players, investments, sponsorships, and other revenues showing remarkable growth.
So what can we expect from 2019? We’ll leave the numbers’ game to analytics masters like Newzoo and SuperData and instead focus on trends we’ve noticed. Take a look at our predictions for how the esports landscape will change and grow this year!
Investments and Endorsements
Those of you who have been paying attention surely noticed a bump in capital investments into esports organizations and startups over the past few months. While venture capital investment has mostly been focused on North America, the action has now splashed over to Europe and South-east Asia. Here are just a few of the most notable recent deals:
- Team Vitality received €20M from tech entrepreneur Tej Kohli,
- Cloud9 raised a Series B round worth €44M after having closed a €17.5M Series A round a year earlier,
- aXiomatic, parent company to Team Liquid, also raised a Series B round totalling €22M following a previous investment round of €14.5M,
- Chinese esports organization QG raised €13M in its Series A round,
- While not strictly venture capital, still a hefty deal: South Korea esports network OGN is partnering with PUBG Corp and investing over €87M into the North American market and its National PUBG League,
- Epic Games, the company who owns Fortnite and the Unreal game development engine, secured a whopping €1.1B of fresh funds in its latest investment round.
It’s not just VCs who have been looking to dive into the sea of esports, either. This year saw celebrities like Michael Jordan and Drake taking the leap, with Jordan participating in aXiomatic’s Series B while Drake is reported to have invested in 100 Thieves’ recent Series A with an undisclosed sum.
While VCs have had their eye on esports for a few years, for the most part, they don’t focus exclusively on this industry. This doesn’t mean there are no dedicated esports VCs — Trust Esport, a €20M fund based in France, was announced in October, for example. Stephen Hays of Deep Space Ventures also keeps a list of active VCs in esports, currently counting 50 VCs.
All in all, we could say that there is a definite trend of investors gravitating towards the esports area. According to Crunchbase, both the number of deals as well as total capital investment have been increasing over the last few years. While 2017 may have been notorious for the blockchain and ICO boom, that segment has seen a halt as crypto investors reel from the crash. However, as noted above, we have seen VC deals with record sums in 2018. Attracted by analysts’ growth forecasts as well as a little bit of FOMO, we can expect investment funds flocking to esports in 2019 as well.
Hottest Esports Games in 2019
In terms of what’s being played, there have been some signals in the final months of 2018 that point to a changing esports landscape and increased competition from game publishers. After its debut as a newly free-to-play game and a battle royale game mode addition, it was reported that the Counter-Strike: Global Offensive user count peaked at over 20 million unique users in December 2018 — more than doubling the previous month’s user count. Blizzard, a company with perhaps the most irons in the esports fire, announced that it would be dialing back development support for Heroes of the Storm and abruptly canceled esports events planned for the game in 2019, leaving players and esports organizations who had invested in participating professionally out to dry.
Battle Royale —Mode Passé or Here to Stay?
Many newcomers are trying to create the next big esports game, with successful titles like Fortnite and Overwatch attracting a lot of attention from stakeholders and the media. Fortnite, undoubtedly one of the most popular games of 2018, was also the driver of the rise in popularity of so called battle royale games, of which many new ones sprouted up, but none of them made a truly big break into esports. Despite its popularity and dedicating $100 million to competitive play and other esports-related activities, Fortnite has mostly attracted casual players, with the battle royale mode proving difficult to structure a competitive ecosystem around. In general, the battle royale mode’s popularity is waning as game companies focus on game monetization rather than fun and engaging gameplay (a symptom sadly not limited to new IP or the battle royale mode).
So far, the upstarts haven’t been able to dethrone the kings of esports that have been on the scene for the past 5 years or even longer, honing and balancing their product while delighting and exciting millions of fans worldwide season after season. By kings, I mean CS:GO, Dota 2, and League of Legends — games that are likely here to stay for quite a few more years, as long as their creators keep up the quality their fans have gotten used to. League of Legends especially is poised to stay around for a long time now that the NA and EU arenas are moving to franchising their teams, paving the way for more investments in organizations and enabling better compensation and a more positive work environment for esports pros.
In 2019, we will most likely see a decline in battle royal games, creating opportunities for new game modes, mediums, and mechanics to conquer the mainstream market. Over the past few years, mobile gaming has been on the rise, especially in the Eastern hemisphere. The spread of mobile games is naturally limited by the penetration of mobile hardware powerful enough to deliver an immersive, multiplayer experience. We might see the trend of mobile gaming arise in the West as mobile companies double down on the gaming crowd by offering so-called gaming phones, with brands like Razer and Asus entering the market as well.
It’s hard to predict which games will make the best use of the advanced mobile devices hitting the market this year, but there are certainly some candidates. Valve’s latest release, the virtual collectible card game Artifact is coming to mobile in 2019, and could prove to be a contender for the mobile esports throne. On the other hand, popular titles like Fortnite and PUBG could make use of the mobile format to bring us innovative new competitive formats. The third option is, of course, that a new game will rise up to conquer the mobile esports space.
If I were a betting girl, however, I would get behind team mobile games, similar to Nintendo Switch shooter Splatoon 2. To be honest, Nintendo’s current offering of multiplayer games makes for some compelling candidates, especially with the recent release of Super Smash Bros. Ultimate. However, as sad as this makes me as a lifelong Nintendo fan, I’m not sure that the Switch’s penetration can compare to that of smartphones, so I expect those titles to achieve only modest, geographically limited success in esports.
In short, there is no game releasing in the near future (that we know of) that will replace the established mainstream esports titles. We at GewdGame don’t expect any major changes in the leading titles on PC, but mobile titles have the potential to attract a lot of attention, especially since smartphones are more affordable than gaming PCs.
Will Esports Be Equal to Sports?
I wrote about whether or not esports is comparable to sports in a previous blog post a few months ago. Will 2019 bring the changes and initiatives needed to bring esports on par with traditional sports?
Surely, every subsequent year of esports activity means so and so much more knowledge, experience, and data collected, allowing stakeholders in the industry to make better decisions and helping it grow. From that perspective, then, each year brings improvements — but that doesn’t mean we have an excuse to be passive and just wait for things to happen by themselves.
This year, all eyes will be on the 2019 Southeast Asian Games held in the Philippines, where competitive games will be a medal discipline for the first time. It comes as no surprise that this development is happening in the SEA region, where esports audience growth rates are currently the highest.
Another trend we expect to be on the rise this year is the construction of dedicated esports venues. With global esports audiences expected to surpass $450 million (with a YoY growth rate of 15,4%), the demand for venues suitable for hosting esports competitions and other events also grows.
With esports following on the tails of traditional sports in so many fields, new problems as well as solutions will sprout up, paving the way for new regulation and legislation. It should also be noted, however, that the growth rate in developed esports markets seems to be much faster than in those who have had a slower start.