Esports was the talk of the town and the buzzword for venture capitalists in the mid-2010s. After that, however, this paradigm of sports-entertainment took a big dip, and investors sought greener pastures in search of a good return on their money.

Electronic sports, or esports, is a term used to refer to professional online gaming in tournaments and leagues. These teams are often backed by esports organizations, whose main source of income is advertising and prize pools. Over the years, esports has evolved from the pipe dream of hardcore gamers to an actual professional career.

From multi-million dollar tournaments to celebrity teams, esports was poised to become the next big spectator sport. Names like Team Liquid, OG, Evil Geniuses, Fanatic, and Global Esports became common parlance for gamers and achieved cult status for their phenomenal performances in million-dollar tournaments.

Despite its explosive upward trajectory over the past decade, the esports industry has been in a downturn for the past two years. With the field primarily focused on blockbuster events, the pandemic hit it hard, with many tournaments moving to a remote model as a consequence of global lockdowns. The recession caused by the pandemic turned out to be a double whammy for the industry, as venture capitalists slowly withdrew, citing lack of profits.

The esports market has grown from $4.5 billion invested in 2018 to just over $300 million in 2022. While some companies like Team SoloMid have branched out into content and merchandising for revenue, others have gone in the market to acquire them or have failed completely. Also, venture capitalists now have a new toy to play with: Web3 games.

Even as the industry experiences a downturn, India has bucked the trend. Indeed, Indian esports companies are witnessing their golden age, riding the wave of mobile gaming in the world’s largest digital ecosystem. Does that mean the market is lagging behind? Or is it setting a new precedent for esports? Read on to find out.

The beginning of the end

The years 2018 and 2019 were milestones for esports around the world, both in terms of funding and prize money. In addition to the aforementioned VC funding boom, tournaments used to have prize pools of over $10 million. In 2019, The International, the world’s largest esports tournament, offered a $34.3 million prize pool, and the Fortnite World Cup Solo championship offered $15 million.

Viewership for these events was also at an all-time high. At a League of Legends tournament in November 2019, 44 million concurrent viewers tuned in to watch the finals, with a total audience of over 100 million over the course of the tournament. The industry seemed destined for a big boom, but the pandemic had other plans.

Esports went through a period of uncertainty during the pandemic. Because event organizers can’t hold events in public spaces, many investors and advertisers left a bad taste in their mouths whenever esports was mentioned. Sponsors and advertisers stopped collaborating with esports organizations, cutting off one of their main sources of revenue.

Investors also began to move towards cryptocurrencies and Web3 games in general. Crypto experienced a huge boom in 2020 and 2021 before its merger, which led many companies to build an NFT-focused Web3 ecosystem. Blockchain gaming began to gain steam in late 2021, with $2.5 billion invested in the field in the first quarter of 2022 alone. Furthermore, the industry has also matured beyond NFT mints and pay-to-win models, drawing more VC attention.

Despite VCs flocking to invest in Web3 games in Western markets, Indian investors are still looking to build the country’s esports scene.

The next esports paradigm

With a population of 1.3 billion, India has become a top target for companies looking to target their next billion users. The country has been undergoing a digital revolution due to low data rates, exposing a whole new market of users to online verticals. While India has also been a prime market for gaming, it is now beginning to ramp up its esports skills.

A wide variety of the gaming-exposed population has now set out to enter India’s burgeoning esports scene. What started with international teams like Global Esports and Team Fnatic has now grown into a market full of local esports teams made up of Indian rosters.

While the lockdown caused a drop in interest in esports around the world, it was one of the catalysts for the growth of the field in India. Gamers like Aditya ‘Dynamo’ Sawant, Tanmay ‘Sc0utOP’ Singh and Naman ‘Mortal’ Sandeep Mathur captured the attention of aspiring mobile gamers with their game streams like Garena Free Fire and PUBG Mobile. The high viewership on these broadcasts led many of these influencers to start their own esports organizations and accompanying teams, boosting the mobile esports gaming scene in the country.

Brands and companies jumped on the bandwagon to sponsor big events in the esports scene in India. Some examples include Valorant Conquerors Championship (backed by Riot Games) and Battlegrounds Mobile India Series (backed by Krafton).

Due to the wide accessibility of mobile gaming in India, many aspiring gamers also used their phones to look for a chance to play in the big leagues. A report compiled by EY on the state of India’s media and entertainment sector in 2022 found that the number of players in esports doubled in 2021, from 300,000 to 600,000. Revenues also witnessed an increase similar, growing 29% in the same period of time.

The market is projected to grow further, with over 500 million esports players by 2025. Furthermore, the Indian government is also targeting esports through its Animation, Visual Effects, Gaming and Comics Task Force. (AVGC) started in the 2022-23 budget. . The field is sure to be the next big cash cow for Indian media companies, as well as a potential career path for budding players.