BCG – Esports Report, 2023

The BCG Esports Report for 2023 highlights the key differentiators of esports compared to traditional sports. In esports, competition takes place in a video game environment rather than physical games. The ecosystem of esports incorporates game publishers and licensing partners, which sets it apart from physical sports. Additionally, each video game in esports has its own unique composition of events and tournament structure. The report acknowledges that while esports has a long way to go in terms of popularity compared to traditional sports, it is growing rapidly. The largest esports events are still much smaller in scale compared to major sporting events like the FIFA World Cup. However, esports viewership is increasing, with events exceeding 100 million hours watched and selling tens of thousands of tickets for live attendance. The number of esports events is also growing, with over 300 tournaments offering significant prizes. The report predicts that esports growth will continue, as there is untapped potential with only 15% of the total gamer population (500 million out of 3 billion) currently engaged in esports. This potential can be captured by both existing and new video games, with a significant trend being mobile game-based esports. All stakeholders in the esports industry recognize its potential and are actively working to professionalize the industry. Esports clubs are scaling up and diversifying their business models, while national governments are adopting esports-related legislation. Multinational bodies, such as the Asian Games, are experimenting with esports, and dedicated programs are being created to nurture talent and make esports a sustainable career. Brands are also leveraging esports as a marketing channel, with companies like HP, Intel, Mercedes-Benz, Nike, and Louis Vuitton promoting their products through esports. However, the report notes that stakeholders primarily act on a stand-alone basis, and collaboration will be necessary to significantly scale esports. The business model of esports is not yet sustainable, and media rights need to be utilized to transition esports from being solely a marketing cost for video games to a stand-alone industry. Game publishers are cautious, as esports can impact the reputation of their underlying video games, but collaboration may optimize costs and grow the esports scene. Basic regulations, similar to traditional sports, need to be established, and governments should recognize esports as an industry and career to provide organization and predictability for clubs and fans.