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Esports Industry Survey: Decision-Makers Expect Investment Activity to Increase to Pre-COVID Levels

Throughout the year, the esports ecosystem had to adjust to unprecedented circumstances resulting in the cancellation of almost all major esports live and in-person events, a shift to online competitions, and an increased viewership. The effects of the first wave of COVID-19-related shutdown policies in March had a diverse impact on different segments of the esports industry.

Some businesses such as esports tournament organizers ESL and DreamHack parent company MTG had to deal with significant drops in revenues due to canceled events and had to reduce operating costs while other parts of the industry profited from an increased interest in gaming and esports. One of the ecosystem’s segments that temporarily benefited financially from the situation was sim racing, which in one instance broke an esports record when 1.3M broadcast TV viewers tuned in to watch professional NASCAR drivers compete in iRacing on FOX and FS1.

The overall uncertainty of the industry’s state was directly represented by the investments made into esports companies. During the first half of the year, The Esports Observer tracked a total of $1.12B USD raised, while the added attention on esports and gaming in combination with the resilience proved by many players helped raise $5.01B in the timeframe between July and November.

In the third annual esports survey conducted by Foley & Lardner LLP and The Esports Observer, we asked 255 decision-makers about their opinion on how investments into the esports industry will develop over the upcoming months and years. The results were consistent with the investment trend over the last couple of months, as 73% of survey participants expected an increase in the level of esports investment and deal activity in Q3 2020 and Q1 2021.

All of the remaining 26% of participants who don’t think investment and deal activity will increase in Q4 2020 and Q1 2021 anticipate that it will return to pre-COVID-19 levels at some point. A majority of the group (89%) believes that the activity level will return to pre-COVID-19 levels within six to 24 months, of which 45% think that will happen within six months to one year, and 55% believe it will take one to two years.

The group of 73% who expect investment and deal activity to increase in Q4 2020 and Q1 2021 identified several consequences of COVID-19 policies as primary drivers of increased investment activity over the next six months. With 61% of participants judging them as relevant, the two leading consequences are the continuing boost video games and esports are experiencing from social distancing measures and the growth of online streaming platforms such as Twitch and Huya.

On the other hand, 77% of the participants who believe investment and deal activity will decrease in the same period think the inability to hold large in-person sports or attracting the same level of attendance once capacity restrictions are lifted will contribute to that decrease.


While the overall expectation for esports investments is to increase, participants also agreed that the contribution from several key groups of investors will see some decline, especially from traditional sports teams, athletes, and celebrities; many of which are financially suffering because of the cancelation of almost all in-person spectator sports events this year.


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