Esports is the fastest-growing theme in the gaming sector. These organised multiplayer video game competitions have enjoyed spectacular growth over the last decade, with thousands of fans filling stadiums to watch live events and millions following them on streaming platforms. Although esports currently caters to a niche audience – almost 10% of the global online population of around 4.5 billion – its reach is expanding rapidly. Brands from a wide range of industries are investing in esports to reach a young demographic that is typically resistant to traditional advertising channels. Esports revenue is set to surpass $1bn in 2020 with brand sponsorship being the biggest revenue stream. 

The vast majority of esports events involve PCs, and this dominance will continue in 2020. However, competitive gaming using mobile devices will become increasingly popular, particularly as chip developments continue to make smartphones faster and more powerful. To tap into this market, developers are producing so-called ‘lite’ versions of game apps, which can be played on most devices, regardless of technical specifications. Examples include PlayerUnknown’s Battlegrounds (PUBG) Lite and Garena Free Fire. 

However, not all companies are equal when it comes to their capabilities and investments in the key themes that matter most to their industry. Understanding how companies are positioned and ranked in the most important themes can be a key leading indicator of their future earnings potential and relative competitive position.  

According to GlobalData’s thematic research report, Esports, leading adopters include: Activision Blizzard, Amazon, Microsoft, Tencent and Valve. 

Insights from top ranked companies  

Activision Blizzard 

Activision Blizzard’s esports game plan is heavily focused on its popular IP, including StarCraft, Warcraft, Hearthstone, Overwatch, and Call of Duty, and the leagues based around them. With two successful seasons of the Overwatch League completed, it is focusing on the Call of Duty League. Such is the popularity of these games that Google was willing to pay $160m for exclusive multi-year streaming rights to Activision Blizzard’s esports events. The company is working on two new titles, Overwatch 2 and Diablo 4, which should strengthen its esports portfolio. Both will be available by 2022. Its mix of popular games, strategic partnerships, and ability to adapt to changing market conditions makes Activision Blizzard well-positioned to not only benefit from esports but also influence its development.  

Tencent 

Tencent has been a major beneficiary of the esports boom, thanks to its stakes in several leading game publishers (including Riot Games and Epic Games) and investments in venues, events, and streaming platforms. In 2019, it became the founding member of the Global Esports Federation, which aims to regulate players, organisations, and commercial partners in the esports ecosystem. A proponent of mobile games, Tencent is striving to elevate the status of mobile esports on the global stage. Riot Games’ mobile version of League of Legends could give Tencent the traction it seeks in the North American and European markets.  

Valve 

Valve is the publisher of Dota 2 and CS: GO, two hugely popular esports titles. The company is also starting to follow its peers, such as Activision Blizzard and Riot Games, into franchise leagues. In February 2020, it announced a regional league model for the Dota 2 championship, The International. The league has been designed for teams to play in local time, which should bring in more domestic viewers. This move is intended to boost Valve’s revenues through targeted ads and in-game purchases. While Valve’s IP gives it a strong foothold in esports, its streaming platform, Steam.tv (launched in 2018), has yet to make an impact in the market.  

To further understand the key themes and technologies disrupting the technology industry, access GlobalData’s latest thematic research report on Esports.  

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