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Four esports trends to look out for in 2020


Four esports trends to look out for in 2020

In 2019, the esports industry surpassed the billion-dollar threshold for the first time, marking an important feat in history for the industry. Gaming and esports, once considered very niche forms of entertainment, now occupy a considerably large portion of the entertainment industry, with the former now even more popular than film and music combined! The latter, has developed into its own established industry, and it now seems like the sky is quite literally the limit; more and more high-profile music and sports stars are activating into the space to capitalise on this very promising industry.

Over the last five years, the industry’s growth has pointed towards positive trends, with the majority of esports’ revenue coming from advertising and sponsorship. Esports is essentially captivating audiences in ways that traditional media has been unable to like never before, with many traditional broadcasting services making a shift towards content on-demand services.

As the esports industry has now entered its maturation phase, we now expect the market to consolidate itself, ready to reach new heights over the coming decade. But for now, we will look the esports trends to look out for in 2020.

1) Rise of Mobile Esports

The recent rise of mobile gaming has vastly expanded the video games market, as mobile games now account for almost 50% of the total video games industry!

The infographic below, taken from Newzoo’s Global Mobile Market Report, shows the top countries in terms of smartphone users. In this instance, it refers to those that use a smartphone at least once a month.

China, India, and North America have the most smartphone users.China, India, and North America have the most smartphone users.

Why is mobile gaming so popular?

Access to smartphones are now more widespread; the majority of mobiles now are smartphones. What’s more, gaming on smartphones offers a much more straightforward entry into competitive gaming — and esports — considering mobile gamers can play without the need for a console or gaming PC, which poses a huge barrier to entry to say the least.

The lower barrier to entry validates precisely why mobile gaming, in particular, thrives in developing countries, and so, points towards why mobile esports leads the way in these regions. We have seen popular battle royale games like PUBG sweep much the Indian esports market, and another in Garena’s Free Fire, a battle royale survival game, dominate Brazil’s gaming market. The nature of these games allow users to enjoy the premium mobile battle royale experience on almost any smartphone.

Furthermore, with game developers paying attention to the rise of mobile esports, we are beginning to see popular titles, with huge player bases, like Fortnite — which is allows for cross-platform-play — and even Call of Duty: Mobile branch off into mobile gaming. Innovations in technology now also mean that mobile gamers can connect console controllers, which offer new ways of playing our favourite mobile games competitively, almost anywhere in the world with a stable internet connection.

Credit: Amazon. DualShock 4 controller compatible with smartphones.Credit: Amazon. DualShock 4 controller compatible with smartphones.

These innovations will essentially enhance the competitive experience for mobile esports, whilst also opening the door to a range future mobile esports games. And then there is the introduction of 5G. Surely one of the biggest innovations that will impact the gaming, and subsequent esports industry, 5G connectivity will bring with it much faster wireless broadband speeds to smartphones and other devices on mobile networks.

Mobile Esports Viewership

So, mobile gaming is a form of entertainment that is widely enjoyed, diverse, very widely accessible, and still, will continue to grow at an astronomical rate.

Yet, as much as we enjoy playing, trends also point towards huge viewership figures for mobile esports. Mobile esports generated 50m live viewership hours between September and November 2019 alone; that’s around ten times more than the same period in 2018! With mobile esports games, competitive scenes have formed, exploding in popularity across growth markets, and contributed to a huge jump in live viewership numbers for mobile esports.

With regards to the popularity of Free Fire in the Brazilian market, Chico Tattini, INTZ’s Sales and Brand Partnerships Director, claims that the game was so popular because of its compatibility with mid-tier smartphone, going on to say that the game itself “broke the important under-$500-phone barrier, and brought one million potential fans to the esports community.”

Last year’s Free Fire World Series in Rio and World Cup in Thailand are two specific examples of mobile esports’ growing popularity. The World Series recorded an average viewership of 1.231m viewers, with a peak viewership of 2m, and the Free Fire World Cup 643 thousand viewers — both huge figures for single-day events!

2) Innovation in Digital and “Direct-to-Consumer” Esports Products

According to Newzoo, global esports audiences grew to 453.8m in 2019, a +15% year-on-year (YoY) growth; by 2022, audiences are predicted to reach 645m, a +14% compounded annual growth rate.

Newzoo: “Esports Audience Numbers” (2017-2022).Newzoo: “Esports Audience Numbers” (2017-2022).

As traditional broadcasting services are on the decline, a greater number of viewers are now opting for content on-demand platforms. Amongst millennials — dubbed the “hardest-to-reach” demographic — game video content is now even more popular than leading streaming platforms, like Netflix, HBO and Hulu combined. Last year, Twitch recorded over 628bn minutes of content watched, with 1.26m average concurrent viewers. Additionally, game video content (GVC), though not entirely esports itself, will see GVC audiences rise to over a billion by 2022, up from 850m in 2018.

Games developers are beginning to recognise the value in offering digital and “direct-to-consumer” products. Viewership content — live action, pre/post event broadcasts and behind the scenes — offerings strengthen esports communities, and drive revenue for the industry. Considering GVC currently makes up 12% of viewership hours on Twitch and YouTube, in comparison to non-esports game content at 88%, we see great potential of exposure for the esports industry.

Sponsorships will also continue to drive the industry’s growth this year, Most notably, through Fortnite, Epic Games have been able to successfully market their products with special collaborations, and through sales of in-game cosmetics and skins. Riot Games, too, is another great example. At last year’s League of Legends World Championships Riot debuted two in-game Louis Vuitton cosmetics, launched by virtual hip-hop group, True Damage.

Epic Games uses Star Wars promotional content for their popular battle royale, Fortnite!Epic Games uses Star Wars promotional content for their popular battle royale, Fortnite!

Advertising is where most of the GVC’s global market revenue lies, making up 61% of the market share; in fact, advertising and direct consumer spending pushed GVC revenue to $5.9bn last year. For this reason, it is no surprise that, last year, popular Fortnite streamer Ninja became the first gamer to enter a partnership with sportswear giants, Adidas.

Popular Fortnite streamer, Ninja, enters a partnership with sportswear giants Adidas.Popular Fortnite streamer, Ninja, enters a partnership with sportswear giants Adidas.

This year, we expect to see more game developers and competition organisers experimenting with even more “direct-to-consumer” products, including many more partnerships and brand activations involving digital products continue into 2020.

3) Esports x Tourism

Esports is on the up, there is no denying that. And with the previous point pertaining to an increased focus on “direct-to-customer”, esports will certainly be a boon to the income of many countries.

As competitors currently face issues with travel visas, more nations are beginning to recognise esports in the same way that sport tourism operates. Some forward-thinking will see the revenue opportunities in esports tourism for both players and fans. For players, this leads to increased competitions and a greater talent pool — even providing non-endemic opportunities for roles in broadcasting and logistics. That said, this will require a greater number of localised tournaments for players to truly benefit.

For spectators, this brings a very young and dynamic audience to cities; Riot Games’ League of Legends LEC Finals contributed more than $2.6m to Rotterdam’s economy, after all! In the same way that host city programmes — in which cities bid to host high-profile sporting events — we expect more cities leverage esports as a tourist attraction.

4) More franchising

Franchising has been a cornerstone of the American sports system for some time now; all the top American sports have greatly benefited from this model.

What is franchising in esports?

Franchising in esports allows organisations or teams permanent spots in a competitive league, which oftentimes is regulated by game developers and publishers. These organisations or teams will be able to hold this spot until they decide to sell the rights to another esports team. This effectively increases the revenue for organisations, and overall more money circulating in the industry.

First implemented in 2017, franchising has been employed by the likes of Riot Games and Blizzard Entertainment both of which operate the North American League of Legends Championship Series and the Overwatch League, respectively. Recently, Activision Blizzard’s Call of Duty World League also integrated a franchise model, offering permanent spots for $20m.

Credit: Esports Observer.Credit: Esports Observer.

What benefits does the franchise system bring to esports?

Franchising brings numerous benefits for the various stakeholders within the esports industry. From an investors perspective — so for content buyers, advertisers and sponsors — the franchising system is a recognisable format, and offers security of investment. In this highly dynamic industry, attracting media deals with large and established broadcasters will continue to drive the growth of the esports industry at large.

For organisations and teams, on the other hand, they are able to focus on their long-term sustainability: they can nurture talent, establish competitive esport rivalries, and more importantly, keep fan bases without worrying about losing their league places.

It is fair to suggest that for all the benefits franchising brings, there are also limitations to franchising — particularly for those esports organisations and teams that may not have capital to invest in league spots. We will focus on the limitations of franchising in a future piece, but for now, considering the successes of existing franchise models, we expect more leagues to follow. If franchising proves to be successful in regions that are not traditionally familiar with the systems, these leagues will have a very strong foundation for growth.

Positive signs for esports in 2020!

The four esports trends discussed in this article demonstrate positive signs for the industry at large, and will continue to attract outside investment to drive the industry further. We have planned to cover each trend discussed in greater detail throughout the year, and we are sure that as 2020 progresses, new trends will emerge that will continue to drive the esports industry’s global markets.

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