“We expect the market to continue taking cues from the world of esports,” says Newzoo. “While some of these experiments performed better than others, we expect to see further innovation from traditional sports organizations as they expand their activities in the esports space.”

Esports found itself in the spotlight during 2020, but the industry was not immune to its own unique challenges. For this reason, Newzoo anticipates a continued trend in diversification among esports operations.

Teams like FaZe and 100 Thieves have already illustrated that traditional sports structures are not the ceiling for esports organizations, they’re the floor. Positioning their company as a lifestyle brand and/or focusing on content creator strategies will help organizations to remain agile in a changing and competitive marketplace.

“When an esports company positions itself as a lifestyle brand, it transcends esports alone and enters pop culture, diversifying an organization’s income streams in the process,” Newzoo says. “Naturally, this lowers risk, as if one revenue stream performs worse than expected due to unforeseen circumstances (the pandemic, for example), a different stream could help offset the damage.”

Partnering with influencers offers an additional incentive for brand partners, while streamers gain the backing and resources of a trusted brand. Twitch and Facebook Gaming both hit record viewership numbers in 2020, so it will be interesting to see which esports organizations keep the trend going.

Another trend to watch is the popularity of mobile esports. Consumer appetites for mobile esports have continued to grow and the platform is starting to give PC esports titles a run for their money. Toward the end of 2020, some games including PUBG Mobile and Garena Free Fire began to generate higher peak viewer counts than traditional PC titles like Counter-Strike: Global Offensive and Dota 2. These games still dominate in terms of overall hours watched, but Newzoo expects this trend to continue into 2021, especially as mobile esports gains popularity in China, South and Southeast Asia and Latin America.

According to Newzoo, with travel restrictions still inhibiting international play, league-based esports formats are expected to take precedence. Rather than focus on international tournaments, ecosystems could shift to a regional league-driven format that continues to thrive even after lockdown restrictions have ended.

Photo courtesy of Riot Games