How 2021 is the year of growth and engagement for the esports sector

Updated: Mar 13, 2021 5:03 PM

As per the Venture Intelligence report, since April 2020, venture capital funds have invested $438 million in Indian gaming start-ups

In 2020, esports was responsible for 4% of all online gaming users and constituted 9.13% of aggregated revenue out of the overall online gaming market in FY20.In 2020, esports was responsible for 4% of all online gaming users and constituted 9.13% of aggregated revenue out of the overall online gaming market in FY20.

By Ishaan Arya

The gaming and esports sector in India is witnessing growth and has been proliferating at a good pace. With the easy availability and accessibility of technology and the internet, the online gaming industry is booming. The concept is quite recognized and famous now, especially in the millennial and gen Z generation.

It is transforming and evolving at a rapid pace. Even the user psyche has also undergone a shift from casual games to professional video gaming along with esports and online gaming. The testimony for this statement lies in the increased preference and immense recognition of games like PUBG Mobile, FreeFire and Valorant. However, a notable trend is that esports is welcoming budding gamers as well. It is now a cohesive model wherein one can find both professional and amateur gamers working collaboratively in sync.

Rise of esports investment in India

The sector is also being supported and has exhibited a rise in investment in India. Various angel investors and venture capitalists have been investing their capital in esports and online gaming start-ups to boost the esports community.

As per the Venture Intelligence report, since April 2020, venture capital funds have invested $438 million in Indian gaming start-ups. Inc 42 Plus reported a similar trend where the total venture capital funding in Indian gaming startups was estimated to be $448 million between 2014 and 2020.

According to Inc42 plus analysis report, high-speed 4G internet’s widespread reach and the rising number of online gamers have further driven the growth of the esports sector in India. The aggregate value of esports start-ups in India reached $68 million in the Financial Year 2020 and the industry is expected to grow by a CAGR of 36% in the next 3 years.

In 2020, esports was responsible for 4% of all online gaming users and constituted 9.13% of aggregated revenue out of the overall online gaming market in FY20. India has around 300-400 million gamers alone thereby making it one of the preferable markets to invest by the capitalists.

The increase in prize money in the tournaments by the esports firms has led to greater participation by the players. This makes it one of the booming sectors and hence investors are preferring to invest their capital in such firms understanding that this will be a profitable deal since the growth graph for the industry is rising and no downfall is anticipated for the coming months.
The funds raised however are usually spent on marketing and technological advancements of the gaming platforms. The aim is to extend a seamless and high-end user experience and hence the capital is spent on marketing and tech development of the gaming ventures.
Growth of esports in India

Esports has a promising future in India. The credit for this majorly goes to the rise in young population, increased use of smartphones, easy availability and accessibility of technology and internet, rising investment by capitalists, and appropriate distribution network. Publishers like Garena, Riot, Krafton etc are actively involved in investing and growing Esports in India.
Career in esports

India also has one of the largest fan and audience bases of esports at the global level. It is indeed becoming a hub for both established players and aspiring gamers to come try their hands and extract value from the rising sector.

The growing market that it is in India will lead to the creation of more job opportunities and the industry will hire all the more talent. The roles majorly looking forward to hire will be game designer, game developer, and tester.

While the sector is evolving and organizes inter-regional and inter-city esports tournaments and has seen a rise in brand sponsorships, the prize value is also increasing. This furthermore encourages the youth to opt for a full-time career in esports and online gaming. The job and hiring prospects are widespread and huge. This will eventually lead to all the more creation and development of aspiring gamers.

According to Niti Aayog’s report, ‘Guiding Principles for the Uniform National-Level Regulation of Online Fantasy Sports Platforms in India”, the fantasy sports industry in the United States (US) was the largest in working until the Indian industry overtook it ‘recently.

Future and growth of esports in India

Industry experts say that India has 300milllion plus gamers. Considering the present scenario, the sector is expanding and growing.
Various key trends to be witnessed in the sector driving its growth in the coming times are-

Live streaming and increased viewership

Gaming and esports will imbibe live streaming and this will further fuel the rise in viewership. Streaming of the gaming content in real-time coupled with regional streaming will help gather more traction and in building a strong, extensive and diverse audience base.

Populated by the young generation, the gaming sector offers fun and frolic experiences and extends leisure time to the users. Thereby it will have increased preference and viewership by them. India is home to the finest youth and connected populations despite existing at various demographical zones. Hence, it is one of the thriving markets for esports and online gaming owing to its entertainment and tech-savvy features.

Increase in prize pools and career prospects

The rewards and cash prizes in the tournaments are increasing and will continue to soar. While inter-regional and inter-city esports tournaments along with brand sponsorships are rising, the prize value is encouraging the youth to pursue a full-time career in esports and online gaming. The career prospects are widespread and huge. This will also lead to more creation and development of aspiring gamers.

Esports in education

The pandemic pushed digital adoption and growth of businesses. It also led to the rise of the esports industry in India. Considering the increasing popularity, that day isn’t far when esports will be inculcated in the curriculum and will be taught as a full-fledged course to the students. The education industry will soon provide esports degrees and certificate courses along with roping in the best coaches, players, and gamers and forming an extensive network of gamers, esports clubs and communities.

Financial growth and non-endemic brand collaborations

The industry will witness sponsorship and advertising from the non-endemic brands as well. Despite not being directly connected to esports, they will be inclined towards such collaborations as these associations will help in their entrance into the esports category. They will also help them garner traction and visibility. This will enable them to diversify their brand portfolio and enhance their brand image.

With the brands running paid ads on recognized esports platforms, promoting products and services via in-game plug-in promotions, brand integrations, sponsorship, they are aiming to gather visibility, audience engagement in a live environment, communication with youth, and recognition in the esports sector.

Being a new entrant, the sector will have opportunities in terms of creativity along with the liberty to the brands. They will be able to express their messaging in a storytelling format but with a unique twist via the esports and gaming sector.
Additionally, the esports industry has garnered a lot of attention from various angel investors and venture capitalists. It will continue to receive financial assistance from investors and sponsors and monetization of esports will soon be at its prime.

Increased mobile usage

As per the BARC & Nielsen report, the number of mobile gaming users per week increased to 68% during the lockdown period from 60% in pre-Covid times. Additionally, the time spent on mobile games per user per week increased to 218 minutes during the lockdown from 151 minutes before the lockdown.

This figure is expected to grow with the deeper penetration of smartphones across geographies combined with the availability of high-speed internet. With the increase in mobile usage, esports and online gaming will also witness a rise. It will contribute as the major growth driver of the industry in India.

Starting from the roots, the Indian gaming industry especially esports is a million-dollar ecosystem now. While it does experience its share of road bumps, the sector is filled with enthusiasm, creativity, and opportunities. Increased investment by capitalists, brand collaborations, and increased mobile phone usage fuel the growth of esports in India. 2021 is the year of growth and engagement for the esports sector and its future indeed seems promising.

The author is co-founder of The Esports Club. Views expressed are personal.

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