COVID-19 Accelerates Expansion of Esports as the Industry Navigates New Obstacles, Survey Finds

Industry insiders believe the spotlight afforded by COVID-19-related shutdowns and restrictions will generate increased investment and deal activity for esports in the near term. Yet, as the third annual Esports Survey Report shows, even esports isn’t immune to the pandemic’s effects.

Conducted by law firm Foley & Lardner LLP and The Esports Observer – and based on responses from hundreds of executives involved in esports – the report identifies the opportunities and challenges ahead for this young industry. While concerns remain about match-fixing and cheating, along with myriad legal risks, strong revenue and viewership numbers in 2020 appear to have given executives confidence that esports is on solid footing and that the industry is well-equipped to navigate these issues.

Key takeaways from the report include:

Growth and Investment

The majority of survey respondents (73%) believe the pandemic will lead to more investment and deal activity in esports over the next six months (Q4 2020 and Q1 2021). More than half cite the drivers of this trend as: continued social distancing boosting engagement with video games and esports (61%), the growth of online streaming platforms (61%), and the increased movement of big brands into esports sponsorships (52%).

At the same time, those who expect a decrease in investment over the same time period cite the top challenge facing esports as the inability to hold large in-person events (77%), followed by declines in advertising and sponsorships (65%). The results also suggest some reluctance from investors hit hard by the downturn to inject further capital into esports. For instance, the percentage of respondents who expect increased investment from private equity and venture capital firms dropped from 47% in the 2019 survey to 40% in 2020.

“While hardly any industry has been spared from COVID-19’s economic impacts, the survey findings suggest an overall positive outlook for esports’ continued growth,” said Bobby Sharma, special adviser to Foley’s Sports & Entertainment Group. “Investors clearly remain interested in the value and potential of esports, and the fact that its massive audience has accelerated its growth in these uncertain times has only created more intrigue.”

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Categorized in: Esports News