eSports Business: Permanence vs. Portability

At first glance, eSports, by definition, is borderless. While football and basketball franchises have to physically move people and operations overseas during international events, eSports professionals can play their games from wherever they lay their gamepads. Or can they? The growing sophistication of eSports’ business is forcing teams to adopt an ever larger – and more permanent – footprint in the world.

Investment Opportunities

Like football, once again, competition is only one aspect of modern eSports. Coaching, staffing, accounting and myriad other concerns form the backbone of day-to-day operations. eSports’ global audience has already passed half a billion people, with Newzoo predicting viewership figures of 700m by the end of 2021. The complexities that this kind of popularity creates speak for themselves.

Of course, there are opportunities too. British eSports team Excel recently attracted £17m in private investment in July 2021 while career development company Nerd Street Gamers raised £8.23m for itself in February. Media giants Sony and YouTube also recently signed broadcasting deals with Faceit and ESL to get the sport over to audiences that might be more familiar with traditional sports.

The influence of sports-adjacent businesses like betting is being felt in the eSports world too. US-based outlets offers markets on League of Legends, CS: GO, Dota 2 and Valorant events rather than the more traditional Premier League matches – though it’s possible to wager on FIFA tournaments elsewhere in this evolving niche. Combined, all the above create a very modern yet very ordinary sports ecosystem.

The Portability of eSports

So, what’s next? As mentioned, the eSports business is increasingly rigid. It has grown way beyond a simple LAN party to encompass physical permanence. This has the unfortunate side effect of making overseas markets more difficult to crack, as teams are far less flexible. However, news website Bloomberg recently implied that the portability of eSports business between Europe and the US had yet to be tested at all.

German outfit G2 eSports will provide the litmus test for eSports’ overseas saleability by partnering with broadcasters and filmmakers in the United States. The aim is ostensibly to earn eSports teams international recognition by selling the industry as entertainment. While this is similar to how gamers currently grow their userbase on streaming platform Twitch, the likes of Hollywood have much more mainstream appeal.

eSports’ current scenario is a bit of a paradox. Based on and around the internet, it should be global in every sense of the word yet it faces the same trouble breaking into new markets as any other business. The key is perhaps in improving access to gaming machines, as the cost of electronics provides a significant barrier to entry even in developed parts of the world. This isn’t like playing football with a tennis ball, after all.

Overall, eSports future isn’t at risk and it remains popular with investors but the shape of the industry over the next few years isn’t set in stone. It'll be interesting to see if eSports adopts a more regional structure or evolves into a truly global phenomenon.