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  • Writer's pictureGFR Fund

Thoughts and Predictions on #eSports

(Photo by Florian Olivo on Unsplash)

According to predictions, #eSports is one of the fastest growing segments in gaming, driven predominantly by the U.S. and Asian markets, making it an ideal sweet spot for GFR Fund.

The recent surge of popularity started in 2009 when Riot Games released its flagship title, League of Legends (LoL). Fast forward 10 years, it is still the most popular game in eSports today. In 2012, #LoL held its first professional team tournament in Los Angeles with a $1m prize. Since then, eSports has grown into a huge industry with over $130M USD in total prize money awarded from last year’s top 10 games alone.

GFR Fund, a venture capital fund rooted in games and mixed reality, has identified opportunities in the eSports sector and have made it the foundation of our latest GFR Fund II ($20M fund size). GFR Fund’s Managing Partner, Teppei Tsutsui had the pleasure of speaking with VR eSports superstar and blogger Sonya Haskins at this year’s #VR/AR Global Summit in Vancouver. Sonya represents the world of VR tournament play and she shared her thoughts on how to get more people, leagues and teams involved in VR eSports.

We will be sharing Teppei’s thoughts on trends and predictions fueled by the explosive growth of eSports here in three main areas:

1) Increased interest in training tools for professional gamers

GFR is currently investing in #eSports businesses that are driving a number of trends, top among them is the increased interest in eSports training tools.

Looking at other traditional sports like football and basketball, training has always been a huge business. As the eSports community increasingly expands from niche, core gamers to more casual, including younger players, esports training is becoming a big market as well. With companies like ProGuides, which connects pro gamers with upcoming eSport athletes, players can start training immediately from anywhere and everywhere. ProGuides is different from other players in the market as it allows users to chat with coaches and instantly play games together. Training is conducted digitally, and players also do not need to purchase equipment nor be physically present to start training. This removes the friction for players to start training.

New game design is also helping to fuel the importance of #eSports training tools as players cannot cheat as easily by paying to win their way to the top. Microtransactions are usually in the cosmetics - new character skins, outfits, etc., instead of purchasing annihilating weapons that can destroy any opponent.

2) Mobile as the technology that pushes eSports to the next level; inspired by Asian market

Historically, mobile games were not robust enough to compete with online multiplayer games and the hardcore Massively Multiplayer Online (MMO) audience. Now, thanks to continuous innovations in mobile technologies, mobile multiplayer is possible. For example, the new #5G network and #EdgeComputing allow athletes to train and compete using only their mobile phone by removing latency and disruption and allowing nearby users to get the best connection possible. As mobile games are no longer as limited, developers are starting to build mobile games with eSports in mind.

While this is evident in the U.S. with titles like Fortnite and PUBG, this trend is even more prevalent in Asian markets, China specifically. GFR has close ties to the Asian market through our investors like GREE and Mixi, global leaders in mobile gaming based in Japan. Through our network we are fortunate to witness early cutting-edge technologies of mobile development and its application in gaming and mixed reality.

3) Sponsorship and Advertising in eSports

Just like any sport, sponsorship forms a key component to athletes’ success. This is also true for eSports and it is growing larger. FanAI, which just raised $8 million, is a leading audience #monetization platform that uses actionable #analytics to improve sponsorship outcomes for teams and players in both sports and eSports. #Brands who covet the billions of passionate viewers of eSports look to companies like FanAI to optimize their sponsorship spend.

According to Influencer Marketing Hub, the number of people viewing eSports competitions increases by a few hundred thousand annually. eSports awareness rose from 1.28 billion in 2018 to 1.43 billion in 2018 and is estimated to reach 1.57 billion people this year. As viewership continues to increase, the industry will also continue to see revenue growth.

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