Recently I have been reading about UK Games Fund which allocates funding to the gaming industry be it games developers, university leavers or just looking to get into the gaming industry; I received a press release from NetSuite talking about Hothead Games, one of the Top 100 in mobile game development; the revolution that Fortnite has caused and the tournament organized by Rubius; and the fact I am immersed in the preparation of a study on the Business Software Use and Digitalisation UK 2018, led me to investigate the gaming industry in a little more depth.
The Gaming Market
It is one of the technological segments that is working best in the modern era and with growth expected to continue, the eSports industry is set to thrive! According to Statista the eSports industry is expected to increase by over 80% within the next 3 years, meaning the estimated worldwide market revenue of eSports will surpass the £1 billion figure.
I must say that I have only been able to scratch the surface, but the complexity, the figures and the profile of the users has left me totally amazed.
I speak of complexity because the convergence between games and other media such as cinema or TV, even the trend towards a 360 experience such as WarHammer, has created niches that enlarge the market. It is not just gaming, but eSports, new influences, a complex distribution network through multiple channels and the need to efficiently control the different channels of monetization – subscription (GaaS), rights, advertising, sponsorship, merchandising, entrance fees, quotas of the distributors – … For all this it is necessary that the companies related to this industry and its derivatives are able to take advantage of all opportunities, and for this it is key that they are able to adapt in an agile way and optimise their processes and control.
The eSports Market
eSports are a consequence of gaming, one of those innovative and disruptive phenomena that are born and developed below the radar of the general media, and despite having a large mass of followers, today society as a whole and most of the business fabric know nothing of the phenomenon, its codes and its potential.
The growth from 2016 to 2017 was 41.3%, and forecasts point to 1,047 million pound in 2020. Movistar, inaugurated its sports city last year, Santander with Adrenaline Challenge, Monster, Mercedes, Dominos, Coca-Cola, Amazon… are just some of the consumer brands that are already betting on linking their brand image to eSports as a platform to connect with the public, – I highlight , not just millennials – and take advantage of the value of linking them to their reputation: leadership, respect, sportsmanship and competition.
A report by the consultancy Newzoo has helped me to open my eyes to this unknown world, where figures are overwhelming. Without taking into account the occasional followers, in 2017 there were a total of 191 million fans. As for the composition of the audience, it is true that it is eminently young, but as we mentioned before, its highest age reaches 35 years with a very good evolution of the older fans. Regarding their socioeconomic characteristics, the majority are those who have full-time work and income above the average.
These figures of age, employment and income not only apply to eSports, but to the field of gaming in general.
The importance of the industry, its rapid growth and its volume of business make it essential that the companies that compose it be able to manage information and growth in an agile and controlled manner, not only at the level of video game development or event organisation. They need tools that effectively manage subscriptions, customers, distribution channels, funding sources and even that are flexible and scalable so they can grow. Tools capable of responding to demand and new market opportunities. The company needs to be able to manage critical processes, such as financial consolidation – when the company has diversified, or gained international recognition, accounting, purchasing, revenue recognition, and even simultaneous access by users.
If you want to know how we can help your video game studio or eSports company be prepared to face the changes in such a dynamic and fast growing industry, just as we have done with Hothead Games, do not hesitate to contact us.