Here’s why esports can become a billion-dollar industry in 2019

In October, Cloud9 became the world’s most valuable esports team after raising $50 million in Series B funding, leading Forbes to peg the team with a $310 million valuation. The same report also estimated that a total of nine esports teams worldwide are worth at least $100 million.

Those numbers have attracted attention from a number celebrities, including basketball legend Michael Jordan, who joined the ownership group for Team Liquid in October 2018.

Meanwhile, big-time investors like Mark Cuban have also taken stakes in esports-related entities for years, and traditional sports moguls have bought in. For instance Robert Kraft, who owns the New England Patriots, also paid $20 million to own the Boston-based team in Activision Blizzard’s Overwatch League prior to its launch last year.

Aside from the star-studded line of investors, 2018 saw a new rush of brands into the space. Last year, research firm Newzoo estimated that about 60 percent of the esports market’s revenue would come from sponsorships and advertising.

One big trend some esports players are betting on is the continued entry of non-endemic companies into the space. In 2018, a rush of non-gaming companies, from autos to telecom, struck deals and sponsored events, leagues and teams alongside more traditional tech and gaming-related names.

According to Naz Aletaha, head of esports partnerships at Riot Games, “our audience is predominantly digital first and that gives us different opportunities to engage in meaningful ways.”

Using Riot’s “League of Legends” competitive scene as an example, she recently told CNBC that “the scale that we’ve achieved globally by operating 13 leagues has created the perfect ecosystem for brands to get involved.”

These partnerships lead Aletaha to believe that some of the next big non-gaming brands to enter esports will be from three primary areas: Quick service restaurants, male grooming and apparel. All three stand to benefit from a space that is “not overly saturated yet” that also boasts a younger audience, Aletaha added.

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