Gaming & Esports: Media’s Next Paradigm SHIFT (2023)

Gaming & Esports: Media’s Next Paradigm SHIFT (1)

Related Expertise: Media Industry, Technology, Media, and Telecommunications, Customer Insights

ByDavid Panhans,Povilas Joniškis,Farah Tamer, andFabien Saunier

Gaming & esports is a vibrant and fast-growing sector, powered largely by the passion of 3 billion enthusiasts around the globe. With its substantial revenue potential, the high-quality jobs it creates, and its reputational benefits, Gaming & esports presents rich opportunities for industry and national governments alike.

Gaming & Esports: A Fast-Growing Industry Sector

Gaming and esports are distinct yet integrated ecosystems, combining to form a sector that presents rich opportunities for both industry and governments.

Encompassing a range of electronic amusements where players interact with an interface or input device to produce visual feedback , video games have emerged as a global cultural force. They compete for individuals’ leisure time with other entertainment activities like movies, books, and the arts. As evidence of their popularity, the video game Grand Theft Auto V, for example, set seven Guinness World Records since its release in 2013, including a world record for US$1 billion of sales within three days of launching.

Games and the publishers behind them compete across a landscape of different genres (Exhibit 1) and platforms (mobile, PC, and console – discussed in next section). Even within a specific genre, the differences between titles is stark. From graphics and game mechanics, to the overall theme and subject matter, consumers have an immense selection to choose from. Some genres are sub-genres of others (e.g., Multiplayer Online Battle Arena, or MOBAs, came from Strategy games) and some titles are hybrids of genres (e.g., GTA is an action/adventure sandbox with some role-playing game elements). While no standard classification exists, the industry does a good job of self-managing the categorization of genres.

Gaming & Esports: Media’s Next Paradigm SHIFT (2)

Esports is a subset of gaming and refers to competition involving video games – people playing against one another (individually and in teams) for prize money and global recognition. Many esports competitors have risen to the reputation and compensation levels of professional athletes. The 2019 Fortnite World Cup Final (a leading sports title) was held at Arthur Ashe stadium, home to the US Open. The event drew up to 2.3m viewers, and the winner earned $3m in prize money. By comparison, 2.7m viewers tuned in to watch the Men’s Singles final of the last US Open. Netflix has said that Fortnite is a bigger competitive threat than HBO1 Notes: 1 2018 Netflix Shareholder Report . Meanwhile, the pool of aspiring amateurs seeking to monetize their personal passion or hobby continues to grow.

The Gaming & esports sector has grown faster than anyone could have imagined and is now a $175B-ayear business growing at a ~10% CAGR.

Newzoo forecasts that annual global gaming revenue will reach over $200 billion by 2023, almost 8% annual growth from $138 billion in 20182 Notes: 2 Source: Newszoo . That is more than the combined annual worldwide box office earnings, music streaming and album sales, and take of the top five wealthiest sports leagues. This gap has widened throughout the pandemic, as traditional media and sports properties have struggled to recover while gaming continues to grow (Exhibit 2).

This dramatic growth is spurred by a gigantic and expanding consumer base, willing to spend money on their passion. The number of gamers globally had been growing at 6% CAGR, with the pandemic and global lockdowns further accelerating that trend. By the end of 2021, 3bn people in the world will be considered “gamers”. Hungry for novel entertainment, these enthusiasts have devoured new releases. Gabe Newell, owner of Valve, a video game developer, publisher, and digital distribution company, notes that when an update is released for the company’s DOTA 2 (another leading esports title), worldwide internet traffic grows by 2-3%3 Notes: 3 Source: Newszoo .

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BCG conducted a consumer survey covering 10,000 people in 10 countries globally (countries selected per region with leading average revenue per consumer). Respondents identifying as gamers are fairly evenly split by gender (57% of respondents were male, 43% female). Fourteen percent of respondents were below the age of 19, another 14% between the ages of 19 and 24, 35% between 25 and 35 years of age, and another 37% between 36 and 50. Seventy-seven percent of respondents indicated some form of employment. Of those, ~60% reported spending at least US$20 on additional in-game features over the last 12 months, with ~25% spending US$50 or more. This does not include the cost of purchasing a game, or any associated hardware purchases. Many games are free-to-play, and monetize through in-game microtransactions that users conduct to enhance their experience. Other popular games, however, currently retail at US$60-$70 for a new release4 Notes: 4 $70 Video Games: Is This the New Normal? .

Already a strong performer, the gaming market has significantly outperformed the S&P 500 since the beginning of the COVID-19 pandemic (Exhibit 3). In the US, gamers have increased their spending on gaming by +75% over the course of the pandemic5 Notes: 5 Source: New York Times analysis .

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The Gaming & Esports Ecosystem

Gaming and esports share a common value chain up to and including game distribution, after which esports continues through events and other consumption-driven adjacencies (Exhibit 4). It is populated by a wide variety of companies, from end-to-end players like Sony and Microsoft to niche content developers, distributors, gaming venues, and so on.

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Technology Development

Technology development focuses on the hardware, or platforms, that enable the games. Platforms on which people play fall into one of three main categories: console, PC, and mobile. Smartphone users account for much of the industry’s recent growth. Major console manufacturers include Sony, Nintendo, Microsoft. But there is some blurring across platforms. Earlier this year, for example, Nintendo announced an OLED Model of its popular Switch platform, featuring a larger, crisper display, catering to gamers-on-thego and emphasizing Switch’s positioning as a hybrid console / handheld device. Valve has also announced the forthcoming release of SteamBox – a handheld gaming PC with direct integration into its Steam distribution platform. These kinds of platform innovations will likely continue to support the handheld console market, despite the flexibility of mobile and PC options and emergence of “cloud gaming”.

Cloud gaming essentially removes the need for expensive hardware, with game processing performed in the cloud.

Cloud gaming is to gaming as video streaming is to traditional home video/DVD. Where consumers used to buy a physical DVD or purchase a digital download, they now just stream movies or tv directly from the web. Similarly, cloud gaming replaces discs or downloads, and consumers only need a controller at home, rather than a bulky Nintendo or PlayStation console.

Margins on consoles have been shrinking, and Nintendo, Microsoft, and Sony have increasingly relied on game purchases and in-game monetization to earn their profits. Cloud gaming could replace consoles with lower-cost devices that are more dynamic for consumers and easier to produce. However, cloud gaming demands top-tier connectivity with low lag times to provide an enjoyable experience. As a result, we see early deployments of the technology into markets with the most advanced infrastructure (e.g., Google Stadia’s release in US and Western Europe).

The next evolution in immersive gaming experiences will likely be delivered in a combination of virtual reality and augmented reality environments. Like Niantic’s 2016 Pokemon Go, and later Harry Potter: Wizards Unite, these technologies promise the seamless blending of real world and fantasy. This trend is shifting the technology development frontier to items like VR headsets and AR-enabled smartphones6 Notes: 6 Augmented Reality (AR) vs. Virtual Reality (VR): What's the Difference? .

Game Production

Game production comprises everything from scoping the game (e.g., budget, genre, storyline, gameplay concept) to the conceptualisation, design, development, monetization model and distribution. Game production accounts for most of the value in the sector, with content development capturing more than half of the value created.

Monetization models range from hypercasual games that generate revenue through ads and/or in-game microtransactions, to decade-old franchises that continue producing sequel after sequel, selling millions of copies to the global following they have garnered. Between 2007 and 2020, Ubisoft released 24 titles for their Assassin’s Creed franchise (including main series and spin-offs), selling over 150 million copies in that period.

Several trends are expected to shape the future of game production. The first is industry consolidation. We have seen significant M&A activity in recent years, as large publishers, media conglomerates, and other technology players acquire studios globally. The second is changing industry norms. It has traditionally been dominated by “crunch” – the expectation of long hours of unpaid overtime to meet key milestones in the development cycle – and a historically young male-dominated work culture7 Notes: 7 The ugly side of video game workplace culture . As more stories of exploitation and abuse come to light, so do calls for sustainable and inclusive workplace practices. The third is constant innovation to find new opportunities and differentiators – new game genres, monetization models, consumer engagement models, etc.

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Esports and Consumption Driven Adjacencies

Esports is a subset of gaming and is simply defined as competitive gaming, played individually or in teams (Exhibit 5). Not all video games become esports titles, but all esports titles are video games. Although numerous video games have competitive formats, popularity is highly concentrated around the top 10 games, which account for 88% of esports hours watched8 Notes: 8 Source: Newzoo, May 2021 .

Organized tournaments range from amateur competitions to well-established professional leagues with multimillion dollar prize pools. While gaming, mostly done at home, generally has experienced a significant push through the pandemic, esports, which often feature live tournaments, has taken a small hit or successfully shifted activities towards online competitions.

Looking forward, we see professionalization and legitimization of the sport continuing to enhance overall perception, and attracting investment and sponsorship from within and outside the sector.

The roles of Publishers and Organizers in the ecosystem, and their corresponding share of profits, will also continue to evolve. Publishers like Epic Games, Riot Games, Electronic Arts, Valve, and Activision Blizzard, who own their games’ IP rights have traditionally been the most powerful players in the esports world. But as the industry grows, so too does the role of Organizers, and the development of rules, regulations, processes, and behind-the-scenes operations9 Notes: 9 Power Dynamics in Esports - the Role of the Publisher .

Mobile esports continues to grow in selected markets but its global future is uncertain. Firstly, it is unclear how transferable the competitive gaming experience is from PC and console platforms – where esports lives today – to mobile. Current mobile esports titles are limited to a handful of genres, with only a few actually drawing much competitive attention. Whether esports will grow on mobile as they have on the other two platforms is an open question. Secondly, it is unclear how attractive watching people playing games on their phones will be to a wider audience. Audience participation and experience will surely need to be enhanced to keep people interested and engaged. And finally, it is unclear how publishers of leading mobile esports games will treat their IP going forward. They may opt to enhance their in-house monetization by taking a more active role in their IP’s esports operations (like Activision Blizzard and Riot Games have done), leaving the organizers with fewer mobile titles to feature. This would stifle the ability for other publishers‘ mobile games to piggy-back on an established mobile esports event, in turn slowing the segment‘s growth.

Several adjacent businesses have emerged with the rise in gaming and esports consumption, which leverage gaming and IP for other use cases. These include:

Streaming. There is a growing trend toward streaming gaming content as form of entertainment. Streaming spans a range of content and attracts several consumer segments: fans watching an esports competition; gamers looking for tips and tricks to improve their play; and community members following their favorite influencers’ / streamers’ content. Twitch is the clear incumbent platform, capturing ~75% of total content hours watched across all major platforms.

Advertisers and Sponsors. Historically, sponsors endemic to the gaming industry like Nvidia and Intel have also been major proponents of esports. But as its popularity has grown, other sponsors and advertisers are joining the fray, investing in both teams and events. These new players include Red Bull, Vodafone, numerous professional athletic clubs.

Gaming Venues. Venues are evolving from the traditional gaming centers like Wanyoo – a chain of more than 1,200 esports destinations in 50+ cities, boasting over 10 million members worldwide – to a more specialized esports-focused “third-place” experience. (Colloqiually, the first place is the home, second place is the office, and third place is a consumer‘s favorite coffee shop/bar/hang-out.) An example of this specialized experience is esports Arena, North America’s first dedicated esports facility. Developed in partnership with Walmart, and now with 50+ locations, it offers community-driven and crowd-funded events, as well as game launches, streaming, tournaments, and retail merchandise.

IP-Related Adjacencies. Popular games and esports have spurred an avalanche of derivative media content, merchandise, and themed experiential entertainment. For example, Netflix has created new content based on Dota (a leading esports title) and The Witcher (a leading single-player adventure game). Universal Studios Japan has a Super Nintendo World, with another under construction in Hollywood.


Underpinning the gaming and esports ecosystem are four key enablers: funding, infrastructure, regulation, and education.

  1. Funding. Funds flowing into gaming firms over the last 18 months have already exceeded the total amount invested over the previous five years. Investment in video game companies was US$5.8b in 2018 and US$7.6b in 2019. In 2020, ~650 transactions (~220 M&A deals, ~400 VC/corporate/private investment, and ~30 IPOs) were completed totaling US$33b. The largest deal was Microsoft’s acquisition of Zenimax for US$7.5b. Other major deals have been announced in 2021, but observers expect to see a correction from the previous year’s boom. Investment is coming mainly from within the sector, but media conglomerates, telcos, tech players, and financial institutions have all entered the space, eager to capitalize on its potential.
  2. Infrastructure. Telco operators provide the core infrastructure needed to serve the growing Gaming & esports consumer base. The offering of greatest concern to the gaming and fan communities is enhanced connectivity (low ping). Sri Lanka Telecom and Telecom Egypt, for example, both offer gaming data bundles. Telcos regularly supply connectivity gadgets to major esports events, which also allows them to associate with the gaming community.
    Telco operators can expand their Gaming & esports activities by focusing on other parts of the value chain. In technology, they can follow the lead of Saudi Telecom Company (STC) and others, and forge partnerships with cloud gaming service providers to distribute their platforms. Zain has joined forces with Nvidia GeForce, UAE’s Etisalat with Gamestream, and British Telecom with Google.
  3. Regulation. The implications and objectives of sector regulation and governance differ based on the maturity of the ecosystem being governed. In developed markets with an established Gaming & esports scene, regulation seeks to ensure a globally competitive environment for developers and publishers. Lobbyists petition lawmakers on behalf of industry participants to support that objective. For example, in the United States, the Entertainment Software Association brings together the major publishers and industry players to reflect common interests, such as combatting copyright infringement.
    In developing markets, where a nascent industry is finding its footing, regulation focuses on establishing the right framework suited to local context, and nurturing the regional ecosystem. In Spain, for example, AEVI brings all the industry stakeholders (including esports) together under one organization that consolidates, prioritizes, and champions their collective agenda with the government. Key issues include securing public funding for game development, and treatment of esports competitors as athletes.
  4. Education and Talent Attraction. Traditional academic institutions (e.g., USC, UT Austin, SMU) are now offering Bachelors and Masters level degree programs in game development, digital innovation, esports management and administration, and entrepreneurship, often in partnership with local industry players. And numerous specialized academies like DigiPen or Laguna College of Art + Design have integrated gaming curriculum into their offering, boasting ~90% of graduates employed in the sector within 2 years.

All four of these enablers are currently driven by private sector players. But they can also be bolstered by direct government action, as discussed in the following section.

How Governments Are Enabling Ecosystem Growth

Governments care about the Gaming & esports sector for several reasons:

  • Economic Impact. They wish to benefit from the industry’s rapid growth and increasing potential contribution to GDP. Especially right now, they see that making big bets can reap commensurate returns. Governments also view Gaming & esports as an important key to unlocking adjacent sectors like software development, AR/VR, hospitality, and tourism.
  • Job Creation. They are eager to create job opportunities in a thriving and dynamic sector. Increasingly, Gaming & esports is a major employer within many countries’ entertainment industries. Furthermore, these are good jobs, employing well educated and technologically savvy people, fostering innovation, and generating substantial economic value.
  • Soft Power/Reputation. Acquiring a reputation in Gaming & esports is great for a country’s image. It announces the country’s relevance, at the forefront of designing and driving 21st century sport, culture, and entertainment. With Japanese anime and South Korean K-Pop, we have seen gaming as the vehicle for expanding global cultural influence. Countries at the center of the Gaming & esports ecosystem can also become global destinations for large-scale events.
  • Enhancing Quality of Life. The Gaming & esports sector expands residents’ entertainment options, and allows them to share in a global phenomenon. And to the extent that a country’s telecom, technology, and hospitality infrastructure can improve the gaming experience, this also enhances participants’ quality of life.
    BCG benchmarked leading gaming nations based on the intensity of their Gaming & esports consumption and production to identify best practices globally (Exhibit 6). Consumption intensity was measured by the total market size, consumer engagement (casual and competitive players), and amount of adjacent gaming content consumed (e.g., streamed video content). Production intensity was measured by the total Gaming & esports revenues, number of entities engaged in Gaming & esports activities, and maturity of enabling infrastructure (including education, funding, etc.). Nations were then grouped into three archetypes: (1) Producers: countries that produce more Gaming & esports content than consume; (2) Consumers: countries that consume more Gaming & esports content than they produce, and (3) Leaders: countries that lead globally in Gaming & esports content production and consumption. Below we share key lessons learned and examine selected countries in more depth.
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Funding and Financial Support Lessons

Four distinct types of support emerged as key enablers. The first is direct financial support for new companies in the Gaming & esports sector, including seed funding and bank loan facilitation for startups. The second is availability of business incubators and accelerators to help develop and grow new startups and turbocharge existing players. The third is provision of ongoing subsidies to firms in the sector, such as R&D tax credits and labor cost assistance. And the fourth is an international sector investment strategy with clear ROI and domestic impact targets.

Infrastructure Lessons

Two types of infrastructure proved particularly important: telecommunications and physical venues. Strong bandwidth and 5G capabilities are essential to support modern Gaming & esports trends. Some countries’ telecoms have localized their game servers to reduce latency. Leading countries also fostered ways to bring gaming out of people’s homes and into more shared and public spaces. This includes local gaming centers for grassroots communities to flourish, as well as arenas or stadiums for large-scale esports events.

Regulation Lessons

Leading gaming nations all featured strong information and communication technology (ICT) regulation. This includes: intellectual property and copyright protection, with penalties against piracy; favorable company setup laws and regulations; favorable labor law and permits; a straightforward and transparent licensing process; and streamlined and lenient age rating criteria. Overall, these governments acknowledged and legitimized the Gaming & esports sector and esports players. They had established visions and strategies to accelerate industry growth, and worked with private institutions like trade associations to steer the national agenda.

Education and Talent Attraction Lessons

Building the right local skillsets and actively attracting talent are critical to building national strength in the sector. Leading countries offered gaming course and degree offerings (e.g., engineering, arts and graphic design, management) with a focus on practical application. More broadly, they cultivated a highly skilled workforce with a range of technological and artistic capabilities. They fostered partnerships with leading global gaming universities and institutes for student exchanges and academic research, and offered gaming internships and training programs. Leading nations also promoted and destigmatized Gaming & esports careers. We found that liberal values and a focus on diversity and inclusion attract talent and allow this creative industry to flourish. Finally, top countries in the sector have developed and nurtured a grassroots ecosystem. They have built esports training facilities with world-class coaches and robust instruction programs. These in turn help to attract global events and allow teams to train with the best.developed and nurtured a grassroots ecosystem. They have built esports training facilities with world-class coaches and robust instruction programs. These in turn help to attract global events and allow teams to train with the best.

Deep Dive: UK, South Korea and Saudi Arabia

In this section we examine UK and South Korea in more detail, as specific examples of what leading nations are doing with respect to the four enablers. We then look at how these are being implemented by KSA, a more recent entrant into the sector.

UK – Historical Production Powerhouse

UK enjoys a high production intensity compared to its consumption intensity – it produces a lot relative to the size of its gamer population. Much of this is rooted in its rich history of developing games for personal computers. Since the 90s, UK has created some of the gaming world’s most iconic franchises like Grand Theft Auto and Tomb Raider.

  • Funding and Financial Support
    The country’s Video Game Tax Relief (VGTR) program uses a ‘Cultural Test’ to offer 25-80% tax relief on games produced in the UK (with a minimum of 25% of core budget required to be expensed in UK or EU). This test awards points for games being set in UK, featuring British lead character, or developed in the UK. Since the program’s inception in 2014, GBP 444m has been paid out across 1,460 claims, of which 50% have involved international industry players (e.g., Sony, Sega). Additionally, the UK Games Fund is a pool of grants awarded to game startups in the UK (conditional on minimum of 50% of total project budget to come from external sources). Since its introduction in 2015, GBP 5.2m have been paid out – and 170 funding applications were received in 2020 indicating a healthy, and well-received initiative for the gaming sector.
  • Regulation and Governance
    In 2020, the Association of UK Interactive Entertainment (UKIE), the main gaming industry trade body, developed an 8-point plan to boost UK esports. Many of these points involve close government engagement and support, including communication campaigns, regulatory stability, and alignment with the Department of Digital, Culture, Media & Sport.
  • Education and Talent Attraction
    A shortage of local talent to fill key technical game development roles led the British government to add several specific roles to the “Shortage Occupation List”, including web designers, game developers, UX designers, and VFX designers. This designation allows local companies to more easily attract and recruit foreign talent. For example, it exempts them from the 28-day local job market listing period, prioritizes the issuance of work visas, and permits lower minimum salary sponsorship obligations.

South Korea - Global Esports Capital

South Korea is the 11th largest video game development hub in the world. Called the Hollywood of professional gaming, it features a densely packed, cost-efficient network of competitors, managers, and sponsors.

  • Funding and Financial Support
    The Korean esports Association (KeSPA) subsidizes amateur esports clubs out of its US $60M+ annual budget. And strong amateur clubs receive additional sponsorships from the ecosystem and their communities. Teams may be sponsored by global brands like Logitech, regional players like Chinese streaming service DouYu, but also by local businesses, including software companies, creative agencies, and even educational and healthcare institutions. This support ensures that developing players get salaries early and can devote more time to their training. Professional for-profit clubs, however, are exempt from government fundi
  • Infrastructure
    Fundamental to South Korea’s gaming and esports dominance is its state-of-the-art connectivity infrastructure. The country also offers over 20,000 gaming centers called PC bangs (“PC rooms”) where participants play massive multiplayer games for a modest hourly fee. They are popular as social meeting spots, and for their expensive, high-end computers specifically designed for video gaming. A project is currently under consideration to establish minimum requirements for PC bangs to streamline quality. A new esports arena opened in Busan in 2020, supported by US $2.7M in government funding.
  • Regulation and Governance
    Government agencies including KeSPA and the Korea Creative Content Agency (KOCCA) were early movers in establishing a clear vision for gaming industry, with defined mid- and long-term plans, and a strong focus on esports (Exhibit 7). The country is home to the International esports Federation, and the industry receives strong support from the Ministry of Culture, Sports and Tourism. The societal prevalence of gaming, and 24-hour operations of many PC bangs have led to an unfortunate rise in addiction to the activity. South Korea has responded with gaming rehabilitation centers and a strong anti-addiction lobby, driving regulatory changes like a ban on late-night gaming for young children.
  • Education and Talent Attraction
    South Korea systematically nurtures and develops gaming talent, and supports esports players throughout their careers. Specialized courses and training facilities encourage esports players from an early age. A “club-system” similar to that of European football supports amateur clubs and offers talented players the possibility and path to become pros. The government also helps post-career players, after they retire at age 25, with pensions and job placements.
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Kingdom of Saudi Arabia – Ambitious newcomer

KSA presents an interesting example of a country seeking to translate a passion for gaming, reflected in its high level of consumption intensity, into a corresponding production intensity. From a population of 34.8M people, 23.5M or 67% identify as game enthusiasts10 Notes: 10 Source: H&P National Sports Survey 2018, NewZoo . Already substantial, gaming consumption is expected to grow from SAR 3.6B in 2020 to SAR 25B in 203011 Notes: 11 Source: Global Games Market Report elaborated by Newzoo; Consortium analysis (WHAT CONSORTIUM?) . These figures point to plenty of untapped potential as more young Saudis pursue careers in game development, management, and esports competition.

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The Kingdom is already home to several notable MENA game developers. Veteran Semaphore Productions has been around since 2010, and released several titles, one of which appeared at E3’s PC Gaming Show in 2016. UMX Studios, established in 2014, has produced several titles with distinctly local flavor like CSD – Climbing Sand Dunes, a sand dune climbing simulator. It is now beginning to venture into the console space. Manga Productions opened in 2017. Originally an anime house, it has expanded into the world of video games with several releases, each increasing in visual complexity and gameplay appeal. The country also boasts multiple esports champions and finalists over the last decade, including:

  • Abdulaziz Al Shehri – FIFA World Champion 2015
  • Abdullatif “Latif” Alhmili – Fighting Games finalist 2016
  • Khalid Aloufi – FIFA Ultimate Team Regional Champion 2017
  • Mosaed AlDossary – FIFA Ultimate Team Champion 2018, FIFA eWorld Champion 2018, FIFA Ultimate Team Champion 2019
  • Najd Fahd – FIFA eFootball World Championship 2020

Funding and Financial Support + Education and Talent Attraction

Manga Productions is a MiSK company – MiSK being a government sponsored non-profit focused on cultivating KSA’s youth as stewards of the region’s economy. This demonstrates the significance gaming and game development plays in the government’s vision for the future.

The Ministry of Communications and Information Technology (MCIT) and DigiPen (world-leading game design academy) recently collaborated to launch the Game Changers program. It is designed to provide “unique career pathways for entrepreneurs in the Saudi game industry”, increasing the number of independent game company startups. Participants begin with a 6-week overview of the game development process and entrepreneurial basics, followed by 16 weeks of intensive training in one of three specialized topic areas: game design; game art and animation; or game programming. They then enter an 8-month game development and incubation phase, with the goal of emerging with a marketable product and viable business model. Selected participants are eligible for a SAR 70,000 grant to take their game’s development further.

Despite this progress, however, talent attraction – especially to the esports sector – faces several structural and societal barriers. Saudi Arabia has approximately 100 pro esports players – representing 0.0005% of regular gamers. In contrast, USA and France have 6x the proportion of pros vs. gamers, and South Korea 8x. Aspiring Saudi competitors note a lack of funding to compete full-time, scarcity of local competition, no clear pathway for gamers to become professional, and social stigma associated with choosing a career in esports12 Notes: 12 Source: H&P National Sports Survey 2018, NewZoo, Interviews with KSA aspiring and ex-esports competitors .

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Communications and Information Technology is a key enabler of the Kingdom’s Vision 2030. In this context MCIT has been investing heavily to develop KSA’s telecommunications and IT infrastructure (especially high-speed broadband), support and grow the relevant business sectors, and create a favorable regulatory environment. All five of the ICT sector’s major 2023 strategy targets imply direct support for Gaming & esports13 Notes: 13 ICT Sector 2023 strategy targets: increase the level of Saudisation in the sector to reach 50%; create more than 25 thousand quality jobs in the sector; increase the ICT sector contribution to the GDP by 50 billion over five years; increase IT and emerging technologies market size by 50%; increase women’s participation in the sector by 50%. (Source: MCIT . More specifically, under the stewardship of MCIT, an initiative was recently announced in partnership with Activision Blizzard and Saudi Telecom Company (STC) to bring Call of Duty’s MENA servers to KSA.

Regulation and Governance

The Saudi esports Federation (formerly Saudi Arabian Federation for Electronic and Intellectual Sports) was established in 2017 with a mandate to:

  • Grow esports in KSA, the region and globally, by promoting, supporting, and facilitating the industry
  • Develop local talent to win regional and international tournaments
  • Engage all key partners in the Gaming & esports ecosystem
  • Lead lobbying to bring esports to the Olympics

Since that time, the federation has hosted numerous league events and tournaments. Perhaps the most notable is its Gamers Without Borders tournament – a multi-title charity tournament attracting competitors from around the world, to raise donations for selected organizations. The second iteration of this event just concluded earlier this year. In 2018, SEF led the creation of the Arab esports Federation alongside 11 other national members, with headquarters in KSA.


Gaming & esports is a fast-growing and continuously evolving sector and offers content producers a platform to connect with consumers in a way that other media cannot replicate. This paper has demonstrated the ability for investors to achieve commercial returns, and for governments to create economic impact. But investors and governments can only create the framework for game developers and esports athletes to grow.

Ultimately, ecosystems emerge from the passion of the consumers - the stories they want to tell and the glories they want to achieve. Gaming & esports speak directly to a shift in the media paradigm, consumers as creators. More than entertainment, they offer an infinite canvas for creation. As government and private sector investment continues to grow, that canvas will keep expanding.

(Video) Paradigm Shift in EdTech Space: Hype vs Long-Term Trend. Panel moderated by Robin Wauters /


David Panhans

Managing Director & Senior Partner


Gaming & Esports: Media’s Next Paradigm SHIFT (12)

Povilas Joniškis



Gaming & Esports: Media’s Next Paradigm SHIFT (13)

Farah Tamer


Gaming & Esports: Media’s Next Paradigm SHIFT (14)

Fabien Saunier

Project Leader


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  • Cross-Platform Gaming Trends in 2022. ...
  • Competitive Multiplayer Mobile Gaming. ...
  • Blockchain-Based Gaming Trends 2022. ...
  • Increased Number of Puzzle Games. ...
  • Hyper-Casual Games are Going to Rule in 2022. ...
  • Unity is the favorite Game Engine of 2022.

Will esports keep growing? ›

The global esports market size is expected to reach USD 12,494.3 million by 2030, registering a compound annual growth rate (CAGR) of 21.9% from 2022 to 2030.

How the gaming industry is changing? ›

Moreover, with the AVGC taskforce and 5G rollout, the online gaming industry is poised to grow from 481 million users in 2022 to 657 million users in 2025. Parallelly, Witzeal being a bootstrapped company, has foreseen a healthy growth over of 35% in the total gameplay in terms of GMV during FY22 as compared to FY21.

Is esports still growing 2022? ›

As of 2022, the worldwide eSports audience size reached 532 million people. In the years to come, more and more viewers are expected to tune in to watch their favorite games being played by some of the best gamers in the world. By 2025, there are expected to be over 640 million viewers of eSports worldwide.

Is esports a booming industry? ›

Most people are familiar with traditional sports and how much money they generate. Sports can stimulate local economies and often feature athletes making millions of dollars. Esports are lesser known but growing fast.

Is Esport a promising career? ›

However, the total number of jobs in esports grew by 87% in 2019 and the industry's total revenue is increasing by 23% annually on average. For these reasons, you can expect esports to grow in opportunities, demands and salaries exceptionally until about 2025.

Why is esports growing so fast? ›

The Incredible Growth of eSports [+ eSports Statistics] The eSports industry has seen tremendous growth over the years, both in terms of viewership and revenue. The increasing viewership is what mainly contributed to the revenue growth – and it's not just because those viewers are generating revenue.

What will video games look like in 2030? ›

Immersive Experiences by 2030

As technology develops, the Internet of Experience will mean that computer graphics will be able to leap into your home in 3D format by 2030. Players can expect to see games projecting graphics into your home to create immersive and alternative scenarios.

What will gaming be like in 2050? ›

In 2050, gaming will be more realistic and immersive than ever before. With advances in technology, games will be able to create realistic environments and characters that players can interact with. Games will also be more social, with players able to connect with friends and family online to play together.

Is esports growing in popularity? ›

Globally, the total esports audience will grow to 495.0 million people in 2020, a year- on-year growth of +11.7%. Esports Enthusiasts will make up 222.9 million of this number, growing +10.8% year on year.

What are 2 controversial issues in gaming entertainment? ›

While video games have many positive aspects, there are a number of issues that are associated with this highly interactive form of entertainment.
  • Excessive Playing. ...
  • Violence. ...
  • Gender Stereotyping. ...
  • Racial Stereotyping.

Who is the target audience for esports? ›

More than six in every ten internet users watching esports are aged between 16 and 35 years old. The average age of traditional sports fan is about 50 – it's 26 for esports. Esports fans are also largely male, although female audiences are growing too.

Why is esports becoming popular? ›

The Growing Popularity of eSports

Several eSports streaming platforms were created due to demand from people staying at home during the pandemic. Analysts predict that by 2023, 15.5% of US internet users will watch esports at least once a month.

Is esports niche or mass? ›

“While esports is more mainstream than it ever has been, it's still a big niche at this point for many of our clients,” said Adam Schwartz, svp of video investments for sports at Horizon Media.

Is esports one of the fastest growing industries? ›

Despite being a niche subculture, it is one of the fastest-growing industries in the world. Estimated to reach $1.62 billion by 2024, the esports industry has a long history, rising to contemporary prominence as one of the most-watched competitions in history.

What do you think is the future of digital gaming explain your answer? ›

The future of gaming offers many possibilities as technology evolves, and internet speed for gaming gets faster. Integration will play an even more significant role, especially after the sweeping success of massive-multiplayer online (MMO) games like Fortnite.

How has the gaming industry changed over the years? ›

Console Time

In the 2000s, games became more accessible, and an alternative appeared in personal computers. Cartridges and then disks gradually went into the past—it has become possible to buy and download games online. Every year gamers spend more and more money on games for new game consoles and computers.

What is the latest technology in gaming? ›

Top Technological Advancements in Game Development
  1. Gesture Control. ...
  2. Facial Recognition. ...
  3. Voice recognition. ...
  4. Cutting-edge Graphics. ...
  5. High-definition Displays. ...
  6. NFT Game Development. ...
  7. Augmented Reality + Virtual Reality: Extended Reality. ...
  8. Offline Gaming Apps.
11 Feb 2022

Is 2022 the best year for gaming? ›

This year has been packed full of massive blockbuster video games like 'Elden Ring' and 'Pokemon Legends: Arceus,' some of the best games in recent memory. And, unbelievably, there are more huge titles on the horizon, too.

Will 2022 be a good year for gaming? ›

2021 was not. 2022 could be the best year we've seen in a long while though. The reasons for the comparative fates of these two years are the same. The pandemic meant 2021's slate was a little light, and assuming everything continues at its current trajectory, means 2022 will be absolutely stacked.

Is gaming industry declining? ›

Combined sales of games, consoles and subscriptions totalled a whopping $191bn globally in 2021. According to Ampere Analysis, this is due to drop by 1.2% to $188bn this year.

What is the #1 esport in the world? ›

In recent years, Dota 2 has become the most popular eSports game among the most successful players in the sport.

What is the biggest industry in the world gaming? ›

The 10 Biggest Video Games Companies in the World 2022
  • SONY. Gaming Revenue: $24.9 billion.
  • MICROSOFT. Gaming Revenue: $16.3 billion.
  • NINTENDO. Gaming Revenue: $15.3 billion.
  • TENCENT. Gaming Revenue: $13.9 billion.
  • ACTIVISION BLIZZARD. Gaming Revenue: $8.8 billion.
  • EPIC GAMES. ...
24 Sept 2022

Will esports replace sports? ›

Activate projects that in the United States esports will have more viewers than every professional sports league but the NFL by 2021. They project that there will be 84 million viewers of esports, higher than the 79 million MLB viewers or the 63 million NBA viewers.
Esports Global Fan Growth ↑
4 more rows
10 May 2022

What is the most profitable esport? ›

CharacteristicTotal prize pool in million U.S. dollars
DOTA 247.79
Counter-Strike: Global Offensive21.89
PlayerUnknown's Battlegrounds Mobile20.57
6 more rows
14 Jul 2022

What is the highest paid gaming job? ›

High Paying Game Developer Jobs
  • Gameplay Engineer. Salary range: $79,500-$172,500 per year. ...
  • Game Engineer. Salary range: $94,500-$155,500 per year. ...
  • Senior Game Advisor. Salary range: $31,500-$127,000 per year. ...
  • Senior Game Developer. ...
  • Gameplay Programmer. ...
  • Game Programmer. ...
  • Senior Games Technician. ...
  • Game Advisor.

What is the biggest threat to esports? ›

Phishing is one of the biggest cybersecurity threats in esports and online gaming platforms.

Why is esports so successful? ›

It is believed that a contributing factor to esports rapid popularity was the fact that the current generation grew up playing video games such as World of Warcraft, Counter-Strike and DOTA 2. Some of which went on to become the leading disciplines for international esports tournaments and competitions.

Where is the future of gaming headed? ›

Mobile and cloud gaming will lead to a reshaping of gaming in the future. A major innovation in gaming technology is cloud gaming. Users can play games wherever they are. If you have 5G internet at home or on the way to or from work, you can play your favorite games on any compatible device.

Is virtual reality the future of gaming? ›

Virtual Reality (VR) and Augmented Reality (AR), both of which already exist in some form today, very likely will mark the next big step forward in the world of gaming technologies. They've already begun to impact commerce, business, design, entertainment and so much more.

Will video games be popular in the future? ›

By 2024, Newzoo's Global Games Market Report 2021 predicts that the games industry will hit $218.7 billion with a sustained growth of 8.7% per year. The number of gamers also continues to increase. According to Newzoo, the number of gamers worldwide in 2021 was up 5.3% year on year, with around 3 billion gamers.

What will gaming look like in 30 years? ›

The next 30 years are likely to bring even more changes, with virtual and augmented reality taking over the gaming experience. Wearing incredibly portable AR/VR headsets or glasses and having games streamed to those devices may happen sooner than most people realize.

What will be the technology in 2050? ›

In 2050, artificial intelligence can outperform humans in a majority of professions. AI software can outmatch humans in white-collar jobs involving constructing company reports, market research, and most administrative functions. In some scenarios, they can also write screenplays, make music, write novels, and more.

Is esports a good investment? ›

Esports is expected to generate about $1.38 billion in global revenue in 2022, according to Newzoo, with China accounting for almost one-third of the market. Global esports audience is expected to grow 8.7 percent in 2022 to 532 million and Newzoo expects the total audience will surpass 640 million in 2025.

How fast is the esports market growing? ›

How fast is esports growing? A recent report by the Milken Institute claims that professional esports brought in roughly $660 million dollars in 2017 and projected that number to grow to over $1 billion by the end of 2019.

Why has esports become popular in recent years? ›

It's more inclusive and accessible than other sports

Additionally, eSports is actually more inclusive and more easily accessible than any other sport. In the world of eSports, anyone can become a champion, regardless of their age, gender or physical ability.

What are the challenges of esports? ›

This goes for marketing, development, and esports.
  • Lack of open information and direct contacts of decision makers in game publishing companies.
  • Ignore & ghosting from the publishers.
  • Unfair and unfavorable terms & conditions in contracts.
27 Jul 2022

What are some challenges in the gaming industry? ›

Trends & Challenges for the Gaming Industry in 2022
  • Labour Movements. 2021 was the year in which some of the industry's giants faced multiple allegations of enforced overtime, workplace bullying, discrimination, and sexual harassment. ...
  • Supply Chain Issues. ...
  • Subscription Gaming. ...
  • Metaverse – AR & VR.

What are the three ethical issues for video games? ›

Additionally, the ethical issues include: violence, rating, education, stereotyping against women, community and addiction. Since computer games usage is increasingly spreading, concern must be placed on the ethical issues that are built in them.

What are the trends in the esport market? ›

The increasing mobile usage in emerging countries, rising awareness regarding esports, and increasing popularity of video games are expected to fuel the market growth during the forecast period. Consumers demand high-quality and interactive gaming content aligned with the dynamic entertainment industry.

What media is used to promote eSports? ›

social media

Twitter and Instagram are the typical channels of choice for the eSports community. Rife with the target demographic, these platforms can be used to promote your brand messaging with appropriate ads.

What is the biggest Esport viewership? ›

Most watched eSports tournaments worldwide as of May 2021 (in millions)
CharacteristicNumber of peak viewers in millions
PUBG Mobile Global Championship Season 03.8
M2 World Championship3.08
Free Fire Contintenal Series 2020 Asia2.57
Fortnite World Cup 2019 Finals2.33
3 more rows
1 Jul 2021

What will gaming be like in 2050? ›

In 2050, gaming will be more realistic and immersive than ever before. With advances in technology, games will be able to create realistic environments and characters that players can interact with. Games will also be more social, with players able to connect with friends and family online to play together.

Is gaming industry declining? ›

Combined sales of games, consoles and subscriptions totalled a whopping $191bn globally in 2021. According to Ampere Analysis, this is due to drop by 1.2% to $188bn this year.

How much will the video game industry be worth in 2025? ›

The global gaming market is expected to grow to an estimated value of $268.8 billion by 2025 which is up from $178 billion in 2021.

Will 2022 be a good year for gaming? ›

2021 was not. 2022 could be the best year we've seen in a long while though. The reasons for the comparative fates of these two years are the same. The pandemic meant 2021's slate was a little light, and assuming everything continues at its current trajectory, means 2022 will be absolutely stacked.

What will video games look like in 2030? ›

Immersive Experiences by 2030

As technology develops, the Internet of Experience will mean that computer graphics will be able to leap into your home in 3D format by 2030. Players can expect to see games projecting graphics into your home to create immersive and alternative scenarios.

What is the future of online gaming? ›

With the advancement of technology, many new gaming trends are coming into the market. It is transforming the online gaming world. Various genres are becoming more advanced, from action games to online card games. There will be more advanced features soon to provide a better gaming experience.

What will gaming look like in 30 years? ›

The next 30 years are likely to bring even more changes, with virtual and augmented reality taking over the gaming experience. Wearing incredibly portable AR/VR headsets or glasses and having games streamed to those devices may happen sooner than most people realize.

Is esports the fastest growing industry? ›

Esports is one of the biggest and fastest growing industries in the world, with viewership now reaching over 810 million people (NewZoo, 2021).

Is esports growing in popularity? ›

Globally, the total esports audience will grow to 495.0 million people in 2020, a year- on-year growth of +11.7%. Esports Enthusiasts will make up 222.9 million of this number, growing +10.8% year on year.

Are video games losing popularity? ›

After the 2020 pandemic bump, we expect monthly digital gaming usage will see minimal growth through the end of our forecast (1.1% in 2022 and 0.9% in 2023). We expect the number of US digital gamers to reach 179.6 million by 2022.

Is eSports still growing 2022? ›

As of 2022, the worldwide eSports audience size reached 532 million people. In the years to come, more and more viewers are expected to tune in to watch their favorite games being played by some of the best gamers in the world. By 2025, there are expected to be over 640 million viewers of eSports worldwide.

Why gaming industry is growing so quickly? ›

The gaming industry is benefiting from the growth of the global economy. This is resulting in increased demand for gaming products and services. The industry is also benefiting from the rise of new platforms, such as mobile and social gaming. This is resulting in new opportunities for companies to reach gamers.

What is the fastest growing section of the game industry? ›

Console gaming represents the largest segment as of 2021, but mobile is the fastest growing with a +4% year-over-year growth rate.

What is the most popular gaming system 2022? ›

Top 11 Best game consoles of 2022
  • Sony PlayStation 5 – BEST GAME CONSOLE.
  • Microsoft Xbox Series S - BEST BUDGET CHOICE. 4.0.
  • Xbox Cloud Gaming.
  • Nintendo Switch Lite.
11 Oct 2022

What is the most demanding game in 2022? ›

The Most Graphically Demanding PC Games (2022)
  • Spider-Man Remastered (August 13, 2022) ...
  • Elden ring (February 25, 2022) ...
  • Dying light 2 Stay Human (February 4, 2022) ...
  • God of War (January 14, 2022) ...
  • Final Fantasy 7 Remake (December 16, 2021) ...
  • Halo Infinite (December 8, 2021) ...
  • Far Cry 6 (October 7, 2021)

What is the most trending game right now 2022? ›

Most Popular Online Games of 2022: Try these Top 7 Played Video Games in the World
  • PUBG. There is a huge fan following of PUBG in the world. ...
  • Minecraft. ...
  • Apex Legends. ...
  • Fortnite. ...
  • Call of Duty Mobile. ...
  • Counter-Strike: Global Offensive. ...
  • League of Legends (LOL)
31 May 2022


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