Audience figures for esports continue to grow, with the current 676 million viewers projected to climb to 896 million by 2030. Revenues are also at record highs and are expected to reach between $3.5 billion and $5 billion over the next five years. However, despite these impressive figures, there is a growing concern that the industry needs to reinvent itself if it is to avoid stagnation.
Early Warnings
Back in 2016, when Activision Blizzard announced with great fanfare the launch of the Overwatch League, there was great excitement and optimism amongst both esports’ fans and its billionaire investors.
The league was funded through a franchise model and prominent traditional sports owners such as the Kraft family, owners of the New England Patriots, and the Kroenke family (Los Angeles Rams) paid $20 million to be a part of the action. Overnight, the league became the most valuable esports league in the world.
In 2018, the opening day of the first season saw an all-time peak of 425,000 concurrent viewers on Twitch. Experts soon predicted esports was here to stay and nothing was going to stop it. Five years later, in November 2023, the Overwatch League folded. Its demise was an early warning sign, but the factors behind its fall from grace remain, leaving the current esports industry at a crossroads.
Obstacles to Growth
In reality, the industry hasn’t progressed beyond its early years of excitement, hype, and hope. An inability to sell broadcast rights has left many esports leagues and teams saddled with inflated salaries and reliant on brand sponsorship to stay alive.
However, marketing budgets are being cut globally in the face of a cost-of-living crisis. That means big brands can no longer afford to throw as much money at esports as they used to. After the boom years of the pandemic era, the inflated valuations and sponsorship-reliant monetization models of esports have collapsed, forcing the industry into much-needed structural changes.
Industry Changes
Dependence on game publishers is a major financial and structural headache for esports. These companies own all IP and commercial rights, making financial independence practically impossible.
That’s why the esports industry is changing its relationship with game publishers and moving away from inflated, multi-million-dollar franchise leagues toward flexible revenue-sharing models and open-circuit formats.
Centralized Media Rights
Publishers are now cooperating on centralized media rights, following the blueprint of more traditional sports such as the hugely popular NFL – you can check out the very latest NFL odds on DraftKings. By pooling their resources, it is hoped they will be able to better monetize media rights and ensure broadcast deals and viewership revenue are distributed more evenly.
In-Game Revenue Sharing
By negotiating a deal around digital item sales such as skins or weapons, teams will receive a percentage of the generated revenue and help create revenue streams outside of sponsorship deals.
Publisher Riot Games recently restructured its League of Legends offering and moved away from high upfront team buy-ins that failed with the Overwatch League. Instead, they are focusing on sharing revenues from sales of digital content directly with teams.
Shift to Open Ecosystems
There has been a significant shift to more open circuit ecosystems rather than publisher-controlled events in recent years. This allows any eligible team to enter qualifiers for tournaments without the need to pay for franchise slots. This in turn frees up a team’s capital and allows them to invest and grow their presence.
Currently, franchised leagues are run by publishers who control most of the monetization opportunities. Open circuits allow multiple third-party tournament organizers to host their own events. Without strict publisher sponsorship guidelines, tournament operators are free to create partnerships and sponsorship deals with whomever they choose, creating multiple opportunities for revenue and growth.
Future Trends
Experts predict that 2026 will see mobile esports go mainstream. They point to the exciting selection of Mobile Legends: Bang Bang (MLBB) as an official medal sport at the 2026 Asian Games, the biggest sports competition in Asia. This year’s Esports World Cup also includes mobile titles MLBB, Free Fire, and PUBG Mobile.
With its ease of access and greater convenience, mobile gaming is now more popular than PC and console gaming. Mobile devices offer players a low barrier to entry with free-to-play game versions and none of the off-putting upfront costs associated with traditional gaming hardware.
This has allowed mobile games to appeal to a much wider audience and spread their reach far beyond geographical boundaries, tapping into new markets across Southeast Asia, India, and Latin America. Mobile games are already capable of producing console-quality graphics and high refresh rates, but as technology continues to improve, it will only become more immersive and impressive.
The once-niche category of mobile esports is already a key part of esports’ global entertainment package. With record-breaking viewership, increasing brand investment, and a wider integration into traditional sports structures, mobile is staking its claim as the future of esports.
