MUMBAI: The state of sports industry over the next three to five years is estimated to grow by 5.3 per cent in Asia and 9.4 per cent in Middle East and Africa (ME&A) according to PwC Sports Survey 2018. Despite the prediction in Asia and ME&A, globally the industry will witness a drop of 10.2 per cent. This is because the market conditions across the industry are stabilising as it progresses in the transition from traditional to digital media consumption, with sports leaders continuing to predict healthy growth in absolute terms.
Adding to this, PwC head-sports business advisory David Dellea said, “Overall, sports leaders foresee stable market growth driven by persistent media and sponsorship revenues as the business models behind them continue to shift towards digital.”
The report mainly focuses on top 10 sports by growth potential globally; esports is leading the chart this year leaving behind the likes of football. The amount of people around the world who have watched some of the FIFA World Cup this year is 3.4 billion which is nearly half the total world population of 7.6 billion, according to research company GlobalWebIndex. The most watched and followed sports in India, cricket, takes the number 10 position. Overall viewership of Indian Premier League (IPL) across all platforms TV (in-home & out-of-home) and digital in urban + rural audiences was 11.3 billion gross impressions.
Esports economy is estimated to reach $804.9 million in 2018, which is a 29.8 per cent jump y-o-y from 2017. The growth in terms of revenue is expected to reach $1.58 million by 2022, which is 18.4 per cent compound annual growth (CAGR) from 2018. The drivers of this growth are sponsorship ($500 million, 31.7 per cent of overall revenues), followed closely by media rights ($449 million, 28.4 per cent of overall revenue) and streaming advertisers ($316 million, 20 per cent of the overall revenue).
An Indian gaming solutions company and creator of e-sports events, Nodwin gaming head Akshat Rathee said, “Esports is already growing in India. One of the biggest testimonies to a market growth of anything is measured by the number of investments done in it. Fundamentally esports is like a sports media marketing property, it’s like the IPL. It is not measured by the number of teams or by prize pool but by media rights auction.”
The growth in esports economy is substantiated by developments such as publishers (Blizzard Entertainment and Riot Games) introducing franchise leagues, traditional sports (such as the NBA and F1) launching esports competitions and mainstream broadcasters (such as ESPN and Sky Sports) airing esports content over the past year.
Esports federation of India (ESFI) director Lokesh Suji said, “Esports in India has massive potential, which is yet to be tapped. With improved internet speeds, smartphone penetration, government digital push and highest youth population, there is no reason why India will not be one of the superpowers for esports.”
Esports for the first time became a part of a major sporting event in 2018 Asian Games Jakarta as a demonstration sports. This was announced by Asian Esports Federation (AESF). 10 Indian gamers qualified for the event.
“We created history for Indian esports when Tirth Mehta won bronze (Hearthstone) and Karan Manganani was placed 4th (Clash Royale) in Asian Games this year, where esports was a demonstration sport. This is the fuel/trigger point which Indian esports was waiting for, it has boosted the confidence of many people who wanted to get involved in esports but were sitting on the fence (be it the brands, investors, gamers or parents). Gamers who were playing casually have started playing seriously as now they know that they can become esports athletes and build a career in esports,” he added.
In January 2018, Nazara Technologies invested Rs 767.68 million for 55 per cent of equity share capital of Nodwin Gaming, a company engaged in activities pertaining to eSports in India. Nazara Technologies is a mobile games company headquartered in Mumbai, which is engaged in the acquisition of, value addition to and distribution, of mobile games across emerging markets such as India, Middle East, Africa, South East Asia and Latin America.
“The viewership market for Indian esports market is 150 million people. We believe that India in 2022 will contribute close to 20 per cent of the overall revenue. India along with China, America and Germany would be the top four esports watching countries in the world. The drivers of growth will be publishers, better teams and better experience between teams,” Rathee added.
“We need to make the Sachin/Virat of Indian Esports and only then will we have viewership numbers. For that to happen, a lot of work needs to be done at the grassroots level such as skill development and enough opportunities need to be created for an esports athlete to showcase his/her skill not only at the national but also at the international level. Mere participation will not help, we have to win. Any broadcaster who is willing to invest will have to invest in building this sport and if they are only looking at building an event they will eventually fail, which at least we don't want as it will create a wrong precedent,” Suji added.
If we look at the growth rate by market segment over the next 3-5 years, digital media rights contribute 11.5 per cent to the overall pie. Sponsorship and advertising is the next big thing with 5.5 per cent share followed by licensing and merchandising with 4.8 per cent share.
India’s first multi-platform, multi-game esports championship was launched by USports in the name of UCypher. The league tied up with MTV for the television broadcast. UCypher’s ambition is to present a platform to talented gamers that help them achieve their maximum potential as well as shape their career in e-sports leagues.
Many advertisers were part of UCypher in its inaugural season like Amazon, Burger King, Fossil, Gillette, Idea Cellular, Mercedes Benz, Nestle, OPPO, Nivea, Netflix, Philips electronics, P&G, Seagram, United Breweries, Vodafone and Xiaomi technologies to name a few.
Sony Pictures Network India head-digital business Uday Sodhi said, “Esports is an early stage development; it’s just getting popular with the younger TG. We covered Asian games in Jakarta in which esports was a part. This is an interesting category but still a small category as compared to other sports in Asian games. Yes, it is a developing, fast-growing category but will take some time to build a large following in India in the mainstream.”
Another Indian esports company, CobX co-founder and CEO Mujahid Rupani said, “Esport already is in the visibility market considering the number of events, price pools that have come into play. Currently, we are six to seven years behind China, but we have the advantage of acceleration. The main thing is that industry support is lacking in India. Global sponsors, who generally fund esports throughout the world, in India have no budgets. The broadcasters in India are interested in esports and they are talking to people. Right now they are at a stage of doing market analysis. The content demand is so much for broadcasting which is not available.”
“We are watching that space and participating in it. Till the time we don’t have Indian winners and heroes it is very unlikely that the sport will develop. We will continue to look at opportunities to showcase on SonyLiv,” Sodhi added.
Talking about esports being broadcast on sports channels in India, “I think it’s dependent on them and us to go out and see what kind of IP is put in. We are already in conversation with Star and Sony Ten. We also believe there is some regional focus with someone like Sun TV who can pick up regional rights,” Rathee added.
The esports industry is only just picking up in India. Only when it amasses a good amount of fan following or if someone takes up the challenge of building its popularity will there be a speedy growth.
