The incredible rise of e-sports.

In the same way that recruiters look for traditional athletes on account of the lessons learned being part of a competitive team, recruiters are now looking for similar traits in esports players:

In a 2017 survey by Robert Half Technology, 24% of more than 2,500 chief information officers said they were attracted to entry-level job candidates who cited playing or developing videogames as a hobby.

A $1.25 billion investment in Fortnite game maker Epic Games Inc. highlights that large traditional investment firms such as KKR and Kleiner Perkins believe the e-sports category has substantial room to grow. The investment, which values Epic at $15 billion, makes Tencent’s $330 million investment for a 48% stake look attractive.

It’s interesting to read that the revenue model relies on many small transactions that players make throughout the game:

“Epic released the [Battle Royale mode] free, but makes money by selling virtual costumes and dance moves for the game’s characters. The company has raked in more than $1 billion in revenue from these so-called microtransactions over the past year, according to estimates from SuperData.”

From many of the articles I read online, Newzoo has established itself as a lead source of information on the growing esports industry. They describe themselves as the an ideal intelligence partner for any company interested in “games, mobile and esports.” A recent report published online gives a detailed breakdown of how Newzoo estimates the global Esports Economy will grow in 2018 (emphasis added):

“In the coming year, the global Esports Economy will grow to $905.6 million, a year-on-year growth of 38%. The majority of this, 77%, will be generated directly (sponsorships and advertising) and indirectly (media rights and content licenses) through investments made by … brands that will spend $694 million, an impressive 48% increase since last year. … Media rights will see the biggest jump year on year, up 72% since 2017. Consumer spending on tickets and merchandise will total $96 million, while another $116 million will be invested by game publishers into the esports industry through partnership deals with white-label organizers.”

Before this article appeared in the New Yorker, I confess to having never heard of Twitch (a streaming platform for e-sports). The following, momentum and dollars behind the platform speak to the rise of e-sports:

“Each month, a hundred million visitors watch their favorite personalities play video games on Twitch, spending an average of nearly two hours a day there. This audience is large enough to make the site one of the twenty most trafficked in the U.S., yet it’s perhaps more apt to measure Twitch against a different medium. With viewership numbers that rival those of MSNBC or CNN, Twitch is less like a conventional Web site than like a kaleidoscopic television network: thousands of channels at once, broadcasting live at every hour of the day.”

Per the article, top-performing players can earn $2 million a year. Some players require a $20,000 fee to simply demo a new game for a three-hour stream.

Amazon noticed and acquired the platform for $970 million in 2014.

Facebook is entering the gaming space in an effort to compete with Twitch. Per an article in Variety, the social media giant recently started promoting its own streaming platform for gamers and is compensating popular Twitch personalities to make the switch:

“One of the most popular game broadcasters on Facebook so far is Darkness429, the internet handle of Tim Havlock. In late January, he switched from Twitch, where he had been live-streaming for about four years, to Facebook earlier this year and now has 180,000 followers on his page. When he left Twitch, he had 168,000 followers. Facebook is compensating Havlock, who lives in Port St. Lucie, Fla., but he declined to provide specifics on the arrangement.”

With Twitch now boasting 15 million active daily users and 2 million unique monthly broadcasters the social media giant has significant ground to make up.

Skillz, the leading platform in mobile e-sports, is experiencing terrific growth that suggests phones will play a significant role in the growth of this nascent and growing industry:

“Now that phone hardware is good enough to run more complex games, even hard-core players are shifting their attention to phones. Six-year-old Skillz, the mobile esports leader, says it hosts more than 1 million tournaments a day and has doubled its monthly revenue, to $16 million, in the last nine months, putting it on pace to blow past $200 million in the next year.”

The article cites interesting facts about the demographics of this user base and shares some additional economics. The top player on the Skillz platform, for example, took home $421,000 in 2017. Click the link below for more.

An article in the Wall Street Journal’s “Future of Everything” magazine detailing how professional videogamers prepare for tournament play cited unique viewership surpassing that of the NFL:

“Last year, esports tournaments and live streams drew 258 million unique viewers. Put another way, more people watched other people play videogames in 2017 than all NFL regular-season games combined.”

Follow the link for descriptions of the facilities and resources now available to professional videogamers.

Per the WSJ, Microsoft is making great strides in the gaming space.

“The company reported a record 18% year-over-year jump in gaming revenue to $2.3 billion for its fiscal third quarter ended March 31, and its Xbox Live service now claims 59 million monthly active users and has grown 13% in the last year.”

Revenue opportunities have evolved quickly and moved beyond consoles and games to digital services, subscriptions and in-game sales. The article cited Morgan Stanley analyst Keith Weiss’ estimate that hardware sales (consoles, etc.) will contribute 16% of Microsoft’s top line by 2021, down from 28% today.