Esports is One of Canada’s Biggest Business Opportunities of 2019

By Mary Ann Yule

Last year, esports claimed impressive wins. LabRoots dubbed it the fastest growing sport on earth. Its superstar gamer, Tyler “Ninja” Blevins, was the athlete who drove the most interaction on social media, according to Forbes. The World Economic Forum says the International Olympic Committee is making an effort to better understand the sport for future collaboration. And, in Canada, esports drew attention from nearly every industry — from lawyers to engineers to music moguls.

Canadian-born rapper Drake now co-owns esports team, 100 Thieves. The first law firm fully dedicated to esports opened its doors in Toronto just a few months ago. Toronto also gained leagues for Overwatch and NBA 2K, two hugely popular virtual games. The owners of the Canucks are bringing esports to Vancouver. And British Columbia will become home to Canada’s first-ever esports stadium in 2019.

Esports has captured the insatiable attention of a diverse and influential following. But as big as 2018 was for Canadian esports, 2019 will see even more growth as the industry rockets toward impending predictions. By 2020, esports is set to claim US$1.5 billion in global annual revenue, according to Deloitte. Research and Markets says it will eclipse US$2.17 billion by 2023. The esports audience, meanwhile, will comprise upwards of 600 million fans. For businesses of all sizes, this burgeoning sport is not just a market with potential, it’s a space no business can afford to ignore.

Entry points

From subscription services for viewing games and tournaments, to ticketing, to tech applications utilizing blockchain and AI, to hospitality, the opportunities for companies to get involved with esports are practically limitless. Global behemoths such as Mercedes Benz, BMW and ESPN are investing, as are Visa and Amazon. But more localized companies are, too. Several years ago Cineplex put money behind bringing esports to its theaters. Recently, Universal Music Canada partnered with Luminosity Gaming, enforcing the natural connection between gaming and music streaming. In 2019, Deloitte predicts esports will further shift media consumption habits, and might prompt new growth in TV viewership if broadcasters are willing to get behind esports.

One thing’s for sure: we’ll see more companies pushing past stigmas associated with what appeals to gamers (i.e. only energy drinks and fast food) to tap into the sought-after community.

Diversity and inclusion

Often investors’ interest in esports is attributed to its elusive core demographic — young men —while that’s true, esports is expanding across multiple demographics. For example, Canada Media Fund says 49% of gamers of women. Unfortunately, that ratio has not yet been reflected in major competitions, but many brands are using their influence to move the needle. At HP, our investment in the OMEN line of gaming devices also includes a partnership with Canadian gamer Stephanie Harvey, also known as missharvey, to drive awareness around educating gamers about diversity and inclusion.

Organizations, such as AbleGamers, have brought recognition to the fact that gaming has strong roots among those with disabilities. And in France, the esports-only ad agency Hurrah is also contributing to a diverse gamer community by starting inside its firm. Diversity must be inherent to creative culture in order for esports to manifest an inclusive future.

Brands that want to enter the esports space need to find an authentic way to connect with audiences and do their due diligence to familiarize themselves with this unique arena. Embracing esports isn’t just about reaching young people. Gamers and fans have eschewed traditional definitions of “sports,” traditional modes of connection, and traditional earning models. It follows, then, that brands who want to be part of this exciting industry must also embrace new ideas.

Engaged fanbase

Something esports has in common with more traditional athletics is an enthusiastic fanbase. For businesses, however, esports presents an even more engaged audience that takes note of the brands that support their sport. Gamers are notedly protective of the community they have built, and they have a lot of pride in it. Esports grew from a kind of grass-roots mentality that is skeptical of corporate involvement. This shouldn’t be seen as a barrier to entry but rather a call to action. Brands have to come to the space with well-aligned, highly resonant perspectives, and many who have done this have seen great success.

A survey by Fullscreen showed that 35% of gamers have an average income of US$75,000 annually. “Power Gamers,” who play 10+ hours a week, were shown to allocate two times as much money towards discretionary spending, two times more on travel, and three times more on electronics than non-gamers.

For Canadian businesses, esports in 2019 is a sector full of opportunity. As we saw with the unconventional Drake partnership and the Canucks non-traditional pivot into new territory, getting into gaming isn’t an option limited to just a few industries, as perhaps we once thought. Brands must think differently. Entering this world means prioritizing new, diverse audiences and rejecting stigmas about who gamers are. The same level of innovation that created this sport will also be required of companies that want to be accepted by its players.

Mary Ann Yule is President & CEO at HP Canada