The eSports industry experienced monumental growth in 2019 and is well underway to becoming a financially lucrative market.
By the end of last year, eSports had over 433 million global viewers, more than American Football and rugby combined, and is expected to reach over 645 million viewers in 2020. For perspective, the 2019 League of Legends World Championship alone amassed a peak viewership of 3.98 million, far surpassing earlier eSports viewership records.
2019 also marked the year that eSports became a billion dollar industry. In line with its massive following, eSports drew in record revenues last year, experiencing a 26.7% year-on-year growth. Sponsorships topped the charts and proved to be the most profitable revenue stream for eSports companies at $456.7 million, a 34.3% increase over the previous year. Media rights and advertising followed closely, with $440.5 million in combined revenues. The global eSports market is expected to grow to $1.79 billion by 2022.
Tournament prizes also saw a noteworthy increase in 2019 over the previous year, estimated to have reached a record $211 million, 29% higher than the previous year.
The eSports industry has now garnered a slew of partnerships and sponsorships, spanning a variety of industries. On the Canadian front, our firm advised a leading North American eSports company, Aquilini GameCo Inc., on the acquisition of Luminosity Gaming Inc. and Luminosity Gaming (USA), LLC, the subsequent amalgamation with J55 Capital Corp. and the arrangement with Enthusiast Gaming Holdings Inc. The merged entity, Enthusiast Gaming Holdings Inc., also acquired a non-controlling interest in the Vancouver Titans professional Overwatch eSports team and a non-controlling interest in a Seattle-based team in the newly franchised Call of Duty® esports league from Activision Blizzard. The transaction was the first of its kind in the eSports industry. In the media world, Microsoft’s Mixer signed an exclusive deal with the world’s most well-known streamer, Tyler “Ninja” Blevins, in an attempt to increase Mixer’s viewership and market share in the industry. And just last month, Louis Vuitton announced a collaboration with Riot Games. The retailer produced a 40-item collection inspired by Riot Games’ League of Legends, making this the first-ever collaboration between a luxury fashion house and a global eSports company.
2019 was undoubtedly a prosperous year for the eSports industry and the continued growth expected in the space makes eSports an attractive and exciting investment opportunity.
The author would like to thank Alexandra David, Articling Student, for her contribution to this legal update.
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