Gaming & Esports Industry Note

Alp Erdogan, MBA | Senior Analyst | Alp@UbikaResearch.com | (647) 835-8810
Christopher Bednarz, MBA | Associate | Chris.B@UbikaResearch.com | (416) 558-5548
Klea Papadhima | Associate | Klea@UbikaResearch.com | (647) 606-5290

An Overview of the Gaming & Esports Market

The gaming industry is projected to generate consolidated revenues of US$148B in 2019. The sector differs from other industries, as the majority of players are start-ups or private companies. The largest global publicly traded gaming company is Tencent Holdings (HKG: 0700), with a market capitalization of US$370B. The gaming industry is composed of publishers and developers that own the intellectual property (IP) and content, which has enabled Esports, an industry subsector to emerge.

The gaming industry captures the majority of the Asian market and is less popular in the United States and Canada. The North American region is experiencing high participation in Esports, immersing itself into this nascent industry. According Bloomberg Intelligence, the relatively underdeveloped gaming market in Canada is valued at US$140B.

Figure 1: 2018 Global Games Market (USD Billions)

Source: Newzoo Global Esports Market Report

Esports is a nascent growth vertical within the gaming space. It is defined as multiplayer video gaming, played by professional gamers at a competitive level for spectators. Esports is available to all, including amateur competitive gaming participants, professional teams or leagues, and casual viewers. Often compared to traditional sports, Esports follows similar guidelines and etiquette as that of the NHL or NFL leagues, which control the competitions as well as distribution rights for the matches.

Technological infrastructure is a key growth driver. According to the 2019 Global Esports Market Report by Newzoo, Esports revenues are expected to hit a new high of $1B with a YoY growth of +26.7%. In a 2018 report, it was projected that the mobile gaming space will capture over 47% of the market, with smartphones accounting for about 37% of global gaming revenues. The evolution of technology will support growth in the sector with the global deployment of 5G infrastructure that will allow for a more immersive gaming experience.

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