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Esports industry to grow at 46%, touch 11 bn by 2025: report

As esports become a viable profession for the youth, the number of esports players is expected to grow at 78% CAGR by 2025 to reach 1.5 million players and 250,000 teams. (AFP)Premium
As esports become a viable profession for the youth, the number of esports players is expected to grow at 78% CAGR by 2025 to reach 1.5 million players and 250,000 teams. (AFP)

  • The prize money pool in India is expected to grow at 66% CAGR to reach 1 billion by 2025, according to the report titled ‘Ready. Set. Game On!’ launched by professional services firm EY

NEW DELHI: The esports industry is expected to grow at a compound annual growth rate (CAGR) of 46% to touch 11 billion by 2025, stated a report by professional services firm EY. The estimate figure is a fourfold jump from the current industry size which is expected to reach 2.5 billion in 2021.

Unlike online gaming, esports is defined by online games of skill that are played in tournaments where different teams or individual players compete against each other to win the championship, league or title like they do in physical sports.

With the country's esports industry growing at a faster pace than the global esports industry, India is picking up the pace in growing its prize pool as well. The Indian esports prize pool accounts for a meagre 0.6% of the global prize pool, but is expected to reach almost 2% by 2025. The prize money pool in India is expected to grow at 66% CAGR to reach 1 billion by 2025, according to the report titled ‘Ready. Set. Game On!’ launched on Monday. Growth in the prize pool remains one of the most important factors and incentives for attracting new serious players.

It is estimated that India currently has 1,50,000 players and around 60,000 teams. As esports become a viable profession for the youth, the number of esports players is expected to grow at 78% CAGR by 2025 to reach 1.5 million players and 250,000 teams. The growth will be propelled by the increase in prize money, more games, localization, regional adaptation and growth of smartphone, laptop and broadband infrastructure.

In contrast to the West, mobile phones are the preferred device for esports in India, with over 90% esports players participating in mobile esports tournaments.

As esports tournaments grow more competitive, they draw more viewership and support from players and the audience. Presently, there are over 14 esports broadcast platforms. This is expected to cross 20 platforms by 2025. While the current viewership is 17 million, by 2025 over 85 million unique viewers will watch esports tournaments in the country, equalling around 10% of global esports viewership.

EY has also stated that esports will generate a total economic impact of over 100 billion in the next four years through investments, direct industry revenues, in-app purchases and other revenues. Games popularized by esports tournaments will generate about 14 billion in in-app purchase revenues and the industry is also expected to generate over 300 million of ancillary revenue which may comprise licensing and merchandising revenue as well as players' salary revenues by 2025. The esports industry is also expected to create over 11,000 direct and indirect jobs by 2025.

With the increase in number of esports tournaments catering to a growing audience and gamer base, advertisers and agencies are expected to leverage esports tournament viewership to gain reach and engagement with the audience. Streaming ad revenue is expected to quadruple to 6.5 billion by 2025, generating the largest portion of esports revenues. Tournament sponsorship and syndication revenue is expected to grow at 45% CAGR to reach 3.5 billion by 2025.

“As a game of skill accessible indoors and on the ubiquitous mobile phone, it (esports) has gained popularity during the lockdowns witnessed in 2020 and 2021. Consequently, it has become an attractive option for brands to connect with young and empowered audiences," Ashish Pherwani, partner, and media & entertainment leader, EY India, stated.

Unlike countries such as US, China, Germany, South Korea, and Sri Lanka where esports have been recognized as a professional sport, India is yet to give regulatory support to the game. The report highlighted that the industry requires regulatory support from the government of India and state governments in terms of recognising esports, creating a nodal esports body, providing special economic zone, or SEZ, benefits, development grants and incentives for grass root inclusion.

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