The Crucial Role Of Investors In The Booming Esports Industry

Esports, an abbreviation for electronic sports, has experienced a meteoric rise in popularity in recent years. This form of competition, which revolves around video games, has evolved from a niche pastime into a global phenomenon. The role of investors in the esports industry cannot be overstated, as they have been instrumental in fueling this rapid growth. This article aims to delve into the various ways investors contribute to the industry’s development, including funding teams, tournaments, and infrastructure, while also examining the potential risks and rewards associated with investing in esports.

The Growth and Potential of the Esports Industry

The esports industry has grown exponentially in the past decade. Originating in Asia, particularly in China and South Korea, esports has now gained a significant foothold in Europe and the Americas. The industry’s global reach is reflected in its diverse audience, which was estimated to be 454 million viewers in 2020, with a revenue projection exceeding US$1 billion.

Popular esports franchises such as League of Legends, Dota, Counter-Strike, Valorant, Overwatch, Street Fighter, Super Smash Bros., and StarCraft have contributed significantly to this growth, attracting millions of players and viewers worldwide. These franchises host regional and international tournaments, such as the League of Legends World Championship, Dota 2’s International, the Evolution Championship Series (EVO), and Intel Extreme Masters, which draw massive audiences and generate substantial revenue.

The esports industry’s growth potential is further highlighted by its inclusion in future Olympic events and the Asian Games, demonstrating its mainstream appeal and acceptance as a legitimate form of competition.

The Investment Landscape in the Esports Industry

Investors have played a pivotal role in the esports industry’s growth. In 2018, a record-breaking $4.5 billion was invested in the industry, marking a significant increase from previous years. Traditional private equity investors, who were previously hesitant to venture into this new market, have now started to see its potential.

Investors are attracted to strong management teams with a good understanding of the esports space and the vision to expand the business. Additionally, several years of strong financial performance are often a prerequisite for attracting traditional private equity partners. Sponsorship and influencer contracts also play a crucial role during the investment process, as the strength of these relationships is often assessed by potential investors.

Investment Opportunities in the Esports Industry

The esports industry offers a wide range of investment opportunities. Investors can choose to invest in esports teams, game developers, gaming console manufacturers, and tournament organizers. Companies like Activision Blizzard and Tencent Holdings also offer investment opportunities through share sales.

Notable investors in the industry include athletes and prominent figures in the sports industry. For instance, Michael Jordan and David Beckham have invested in esports teams, while Mark Cuban, owner of the Dallas Mavericks, and the Ohio Innovation Fund have also made significant investments in the industry.

Risks and Challenges of Investing in Esports

Despite its potential, investing in esports is not without risks. The market’s rapidly changing nature can impact investments, and controversies or negative events can also affect the industry’s overall image and profitability.

However, the esports industry has shown remarkable resilience, even in the face of global challenges such as the pandemic. Tournaments have continued online, professionals are still making money, and investments have remained relatively stable, further attesting to the industry’s potential for long-term growth and profitability.

The Future of Esports Investments

The future of esports investments looks promising. The industry’s mainstream appeal and potential for further growth make it an attractive prospect for investors. Upcoming events and developments, such as the inclusion of esports in the Asian Games in 2022, are expected to further boost the industry’s profile and attract more investments.

The long-term stability and profitability of esports investments are also encouraging. With the industry’s continued growth and the increasing acceptance of esports as a legitimate form of competition, investors can expect a positive return on their investments.


The role of investors in the esports industry is crucial. They contribute significantly to the industry’s development by funding teams, tournaments, and infrastructure. The potential rewards of investing in esports are considerable, but so are the risks. However, with the industry’s continued growth, mainstream appeal, and resilience in the face of global challenges, the future prospects of the esports industry and its appeal to investors remain strong. As we move forward, the role of investors in the esports industry will undoubtedly continue to be pivotal in shaping its future.

Frequently Asked Questions

Welcome to our FAQ section on the role of investors in the esports industry. Here, we address some common questions related to this topic.

What is esports?

Esports, short for electronic sports, is a form of competition using video games. It involves organized multiplayer video game competitions, often between professional players or teams.

Which video game genres are associated with esports?

The most common video game genres associated with esports include multiplayer online battle arena (MOBA), first-person shooter (FPS), fighting, card, battle royale, and real-time strategy (RTS) games.

Why are investors interested in the esports industry?

Investors are attracted to the esports industry due to its rapid growth, stability, and lucrative market potential. The industry has seen significant investment growth, attracting traditional private equity investors and offering unique investment opportunities in various subsectors.

What do investors look for when investing in the esports industry?

When investing in the esports industry, investors typically look for strong management teams with a good understanding of the space and a vision to expand the business. They also consider several years of strong financial performance and assess sponsorship and influencer contracts during the investment process.

Who are some notable investors in the esports industry?

Notable investors in the esports industry include athletes like Michael Jordan and David Beckham, as well as business figures like Mark Cuban, owner of the Dallas Mavericks, and the Ohio Innovation Fund. Traditional private equity investors have also started to get involved in esports, contributing to the industry’s growth.