How has esports betting evolved in the last five years?
Niclas Sundell: It has evolved tremendously, not least as a direct consequence of the pandemic. When sports tournaments were postponed, many sportsbooks adopted esports as a filler product for traditional sports. Being similar to their real-life counterparts, sports simulations such as FIFA and NBA2K proved to be excellent substitutes, not least because of the low barrier to entry for football and basketball fans. Other esports, such as League of Legends, CS:GO and Dota 2, have grown in demand among sportsbooks as well, with the pandemic-induced growth acting as an eye-opener for their potential.
Ondrej Silhavy: It’s a steady progression. We see more and more betting operators asking how they can get into esports. If we look at the market, we can segment operators into three groups. The esports native – like Pinnacle, GGbet or 188BET – who know the audience. They know esports and take huge market share from competitors. How? Two things. The product is tailor-made for esports – live streams, statistics and a lot of live betting content. And they know how to communicate with the esports generation. 188BET just became a major sponsor of SEA DPC Dota 2 circuit, so its brand will become synonymous with esports betting. The second group has integrated esports but nothing on top of that. And sometimes, those might be disappointed, because they don’t see the benefit esports natives get. The third group are the ones who didn’t embrace esports at all and have given up on the younger generation. So in the last five years, we have seen movements in these segments towards embracing esports betting. That’s a trend that will continue.
Benjamin Riewe: From my point of view, we have had two big changes. The first was in CS:GO when people started moving away from pages that allowed “skin wagering.” This allowed more organised and especially licensed companies to fill this void and helped to professionalise the whole esports betting space. It was also one of the first occasions that allowed traditional sports and esports bettors to share the same platform, granting the opportunity to experience both worlds. The second was Covid-19, which brought a lot of attention to esports and eleagues that stepped in to fill the big void of a traditional sports offering. This gained a lot of attention and new consumers.
Andrea McGeachin: The esports evolution is something much older than five years. But it goes without saying that accessibility, growth of games published and advances in technology have driven massive growth in audience sizes in recent years. The esports part of this industry is an elite segment of it and the growth of tournaments and leagues has increased interest as the mass public begins to see it and understand it. If we reflect on the Riot Games League of Legends World final in Paris in December 2019, this experienced an environment of passion, noise and positive energy while two teams of five played against each other in the virtual world destroying their characters and dragons. The number of people watching was higher than the Super Bowl, and the people playing and supporting weren’t necessarily the ones betting. A big point on esports is it has rapidly established itself as a major hobby of billions of people. As the mass awareness grows, it’s the ability to bet on the outcome that will build a world where non-gamers, and indeed some gamers, will look to esports as a chosen
market in which to place a wager.
What are the main esports trends that gaming companies should know?
Niclas Sundell: When it comes to betting products, we’ve seen great interest in bet builders for esports. While it already exists to some extent, most products we’ve seen on the market are confined to uncorrelated bets. While it’s trickier to produce, we believe bet builders allowing for same-game combinations will be a true growth engine. When players get to bet on combinations such as NAVI winning and s1mple getting over/under 25.5 kills, it will be a true game-changer. This, alongside bet offers more specifically tailored to the esports audience and an improved supply of player props, are the coming trends that will continue fuelling growth.
Ondrej Silhavy: One of the biggest trends is definitely mobile esports. Those are games being played on smartphones – you can do that everywhere. The rise of such esports games goes hand in hand with the rising popularity of titles like Free Fire, PUBG Mobile and Clash Royale, who seem to be the front-runners in that field. That also sheds some light on another interesting development from the past couple of years. For Free Fire in particular, a large part of its players and audience come from India, South East Asia and South America. Mobile esports has allowed other countries and regions, that before had little to no connection to esports – which struggled to set up the infrastructure necessary to hold larger scale esports tournaments – to be a part of the global phenomenon that is esports in general. There is one catch, though: all mobile titles are very regional. We already mentioned Free Fire in Latin America. PUBG mobile will be more popular in Europe, while games like Arena of Valor or Clash Royale dominate Asia. This creates another complexity for the “outsiders” to understand esports.
Benjamin Riewe: Right now, one of the hottest topics is definitely NFT & crypto. Big esports organisations are getting affiliated with companies from the crypto space like the coinbase & BIG partnership. Esports has a quite young but already monetarily strong audience; 50% of esports fans are 24-44 years old. So it’s a perfect match for the also “young” crypto industry. Of course, there will be challenges, especially when it comes to KYC and country-specific regulations when crypto, betting and esports forge a strong partnership; but I see a bright future ahead of us.
Andrea McGeachin: I’d start with something a key person at Riot Games said to me three years ago – learn about the industry. Don’t make assumptions and just add buzzwords into your comms; I see ‘metaverse’ used too frequently but, equally frequently, out of context. Learn and understand the players, the games, the language and the environment. It’s often unique to different game publishers. Trends to look out for? Recruitment of staff that understand the world – don’t place your brand on a shirt and hope. The language and ecosystem are fast-moving and opinionated. This is where growth in game variations comes across. A good understanding of the metaverse is becoming a prerequisite… learn and understand it in context. We have started to embed our knowledge with key additions to our team, new partners and marketing agency expertise.
What will esports look like five years from now, especially where betting is involved?
Niclas Sundell: We believe esports will be exceedingly distinguished from traditional sports in terms of UI and bet offers. We believe the perfect product-market-fit hasn’t really been found in terms of a sportsbook nailing a truly engaging esports offering yet. Bet offers need to reflect the consumption habits and community patterns of esports fans. When they do, we might very well see another inflection point in the growth of esports betting.
Ondrej Silhavy: We don’t see the “Big Three” of Dota 2, CS:GO and League of Legends changing any time soon. Those will remain at the top of the esports industry. As for other games and genres, it remains to be seen how willing game developers and publishers, as well as existing sporting organisations, are to develop and push new leagues and tournaments to the esports scene. As of now, there is no blueprint on how exactly an esports title can be created. If you look at the story of CS:GO and League of Legends, the path toward the esports behemoth is very different. And the way they are structured is different as well. Is the open competition of CS:GO the way forward? Is it the closed structure managed by the publisher, as in the case of League of Legends? That’s a question that publishers and tournament organisers will have to answer. Maybe those can both co-exist. Whichever games in esports will be the most popular in five years, what we can expect is for the entire industry to diversify even further and for even more titles to be of relevance until then.
Benjamin Riewe: I can only say what I hope it will look like. In my mind, gaming companies will put a lot of emphasis on making the data around esports available in a structured and easy-to-consume way. This will be key to helping the whole ecosystem prosper and enable teams, players and all companies acting in this awesome space to take their game to the next level. The only concern of mine is the risk of having an overly fragmented esports data market, which would again slow down the whole space.
Andrea McGeachin:
This is likely to be stronger but still in its infancy. We will begin to have regulations introduced, initially potentially around advertising in the players’ arena, which for instance could impact betting advertising.
There are likely to be winners in betting, specifically the ones that respect the industry, the publishers and their players. These will be those currently focused on smart UX and use of language. Horseracing and gambling sit side by side and provide supportive insights of knowledge to the player. The same will evolve in esports, with the form of individuals informing predictions and teaching the players wanting to bet to fully appreciate what it is they are betting on.
Finally, the age-old question: will esports betting ever overtake traditional sports betting?
Niclas Sundell: While I don’t necessarily think it will take over soccer soon, it will definitely continue surpassing many other traditional sports. In-play betting on sports has been around since the ‘90s. Esports hasn’t been around for as long, but is already generating revenue for sportsbooks with a gross gaming revenue expected to amount to $960m in 2026. While it sounds like a lot, one has to remember that esports is a bundle of several games. Betting on singular esports is still significantly below traditional sports and it will probably take time until League of Legends or CS:GO become as large on their own as hockey or cricket in a sportsbook. With that said, I think it definitely will happen. When the younger audiences who’ve grown up with video games come of age, they might bet on esports instead of traditional sports. That’s when it’s incredibly important as a bookie to be there and have a competitive offering.
Ondrej Silhavy: I will rotate back to my previous answer. Look at the age groups and look at what they watch, how they spend their time. Ten years ago, the average tennis fan was 40-years-old.Today? He is 50 years old. I’m not saying traditional sports will disappear, of course not. But the potential for esports betting to overcome traditional sports betting is real. I can speak from my own experience. When I was younger, I could be considered a football fan. But once I started to watch League of Legends, football was just boring. I will not be sitting here for an hour and a half to watch a 0:0 game. The fast-paced action and complexity that esports offer is like nothing else on the market. If esports continues to develop a competitive structure and integrity, it is a force to be reckoned with. No other discipline is showcasing such fast evolution.
Benjamin Riewe: The question is not if it will take over but rather if we can achieve a consistent user experience no matter if it’s “traditional” or esports. I don’t see this as a rivalry where one party tries to beat the other. For me, it’s more about learning from each other and delivering the best possible products and entertainment experience to the people.
Andrea McGeachin: The experience enjoyed by being at major outdoor events will ensure that traditional sports betting continues, but esports will take some market share. The quantum will depend upon the evolution of the gamer numbers themselves and the quality of the elite esports events. Sponsorships and professional training are already as intense as seen in traditional sports. So it is inevitable that the seriousness of the competition will drive mass interest. Betting interest will follow as the games’ popularity grows.It’s down to the publishers and gaming industry as a whole to carefully consider the plans for the future and the metaverse world. It’s these market influencers who we will look to, to create the perfect bridge between the two industries. The strategic developments among service provision will also be a major influence on the share of the market across traditional sports and esports.
