The global esports market size is expected to reach $12 billion by 2030.
Increasing mobile usage in emerging countries, rising awareness regarding esports, and increasing popularity of video games are expected to fuel that growth.
Streaming platforms, such as Twitch, have attracted viewers by streaming esports and gaming. The esports tournaments have fascinated athletes and celebrities and have drawn a broad audience’s attention.
Additionally, esports and gaming make it easy to draw the attention of enthusiastic and young viewers who are hard to reach through traditional media channels.
To learn more about the evolving global esports landscape, Techcouver sat down with Mark Elfenbein of X1 Esports. As Chief Executive Officer, Mark oversees the company’s operations, building on more than 20 years of experience leading rapidly growing companies in new emerging industries.
Tell us a little bit about X1?
ME: X1 (CSE: XONE) is a diversified portfolio company with assets spanning verticals such as gaming, media, Esports, and entertainment. The Company is focused on building upon its existing portfolio of assets via a combination of accretive mergers and acquisitions and organic growth.
What new and exciting projects is X1 working on?
ME: X1 went public in July of 2022 and then immediately went on an acquisition spree. First acquiring a video game influencer talent agency called Tyrus which has a roster of 70 well known gaming personalities and works with fortune 500 brands to reach Gen Z audiences and then a fan community for the esport of Rocket League called Shift, which is intending to become the TSN of Rocket League, a game that currently has over 80 million individual global players per month.
Why is the model that X1 is adopting i.e. acquiring many smaller, fast growing and agile players in Esports, the way you think you’ll find success in this industry?
ME: This is a very similar strategy of what we did at my last gaming media company called FUN Technologies which traded on the TSX under FUN and was acquired by Liberty Media for nearly $500 million in the late 2000’s. We rolled up 7-8 esport, fantasy sport and mobile gaming assets which, as a whole, generated more value than the individual sums. The video game industry continues to reinvent itself – this is a very fragmented industry with many under the radar assets which we view as diamonds in the rough.
Where do you see the Esports and gaming industry going in the next 3-5 years?
ME: The market is continuing to grow. From 2019 to 2021, the industry grew from a global revenue point of $130 billion to $180 billion, and we anticipate by 2025 the industry will be worth closer to $250 billion. Esports as a category is also growing extremely quickly, and I expect Esports-specific revenues, which today sit a little below $2 billion, to overtake one or two of the major sports such as the NHL or NBA in global revenue by 2030.
What are the most important trends in the space to watch out for?
ME: The impact of influencers on the space is having a significant impact. During Covid, fans flocked to the streaming video game channels of content creators to gain more insights on their favorite games which lead to massive global audience growth through platforms like Twitch and TikTok. Additionally, VR is moving up quickly where you are getting almost a real-life playing environment on platforms like Oculus Quest. I suspect we will see Apple and others move into this space in a short time.
Is the success of FaZe Clan’s IPO a one-off or is it indicative of a wider belief in the future potential of Esports?
ME: FaZe Clan stock is doing well as it is showing investing demand from the public for an Esports / creator economy specific entity. FaZe Clan is also benefiting due to the brand strength as they have enough brand equity to benefit from a valuation similar to many other strong consumer and lifestyle brands. Similarly, we believe that X1 is also developing its brand equity in the market.
Will Esports ever meet the level of popularity as mainstream sports fandom?
ME: Estimates show Esports will be worth more than $10 billion per year by 2030 this would place it larger than the NHL and NBA in today’s valuation. The recent Rocket League 5-day championship series in Dallas, TX sold out each day at 14,000 fans per day, and the League of Legends championships has a viewing audience larger than the Super Bowl, so, I would say yes.
Why is Esports maintaining strong growth and what is driving it?
ME: This is where Gen Z’s interests are folding into. Gen Z, instead of wanting to become pro athletes and other ambitious professions, now want to become video game content creators and video game Esport team players, which has never happened before. As a result, the number of young people spending their time playing Esports has never been higher and is quickly evolving as the number one form of entertainment and livelihood for many.