On this segment of Industry Focus: Consumer Goods, Vincent Shen and Fool.com contributor Danny Vena cover the fast-growing e-sports industry as they unveil some impressive statistics and recent developments in the space.
Revenue opportunities are only getting bigger, and you'll be surprised how much players are making as streamers and competitors.
A full transcript follows the video.
This video was recorded on Aug. 29, 2017.
Vincent Shen: Let's move on to our next question. It's one from Will in Chicago. He wanted to know, "What is the business model and future for e-sports, especially since Amazon owns Twitch?" The last time we covered e-sports was at the beginning of the year, and there have been some pretty big developments, including new partnerships with professional sports leagues, some licensing deals, and other investments from media companies and game publishers. But Danny, when we were chatting earlier this week, you had some really impressive updates that you shared with me that put the scale of the e-sports industry in perspective. Can you give Fools listening some of the bigger highlights?
Danny Vena: Sure. I found some of these metrics to be pretty astonishing. I've only been following e-sports for a short time, but here are a few bullet points to whet your interest. The largest prize pool ever for e-sports is for DotA 2. DotA is Defense of the Agents, for the uninitiated. That prize pool for players was over $20 million. The top winner of that competition was, in 2015, Peter "ppd" Dager, he won more than $2 million himself in prize money. The E-sports League, which was the largest e-sports company that was broadcasting on Twitch at the time, was recently acquired by a company called Modern Times Group for $87 million. There are currently around 300 million people that tune into e-sports, and that number is expected to grow to over 500 million by the year 2020. Then, to give you a couple more specifics, the League of Legends World Championships that was held in Berlin's Mercedes Benz Arena, tickets to that event sold out in three minutes.
Vena: Three minutes!
Shen: Yeah, that's crazy!
Vena: Like it was a Bruce Springsteen concert!
Shen: [laughs] Elsewhere in this industry, you have a lot of players from traditional sports like ESPN, professional sports teams buying in. I think that adds a lot of legitimacy to this opportunity as well. Just this week, there was the creation of the Madden NFL Club Championship. That's through a partnership between Electronic Arts, which is a huge video game publisher, and the NFL. Players basically will sign up to compete online, and eventually the top 32 players will end up each representing an actual NFL pro team, and they'll compete against each other in the finals, and those finals will actually be coordinated with the actual NFL Pro Bowl and Super Bowl games. The prize money is supposed to amount to several hundred thousand dollars. So you've given a pretty good context and background of the scale for the e-sports business. A word that you used to describe it, and how it's similar to traditional e-sports when we were talking about the show previously, you used the word "ecosystem", and how the different stakeholders come in. In this case, you have game publishers, you have console manufacturers, broadcasters, players.
Danny Vena owns shares of Amazon. Vincent Shen has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends Electronic Arts. The Motley Fool has a disclosure policy.