The global COVID-19 pandemic is brutalizing retailers and straining the world's healthcare systems. But it's proven to be a boon for one sliver of the video gaming industry. Interest in watching other people play video games has soared, boosted by a conspicuous lack of professional sporting events. Yes, that's esports -- professional video game playing -- but not just esports. Bored, stuck-at-home consumers have increasingly embraced the idea of just watching other gamers play non-tournament matches as well.

The anecdotal evidence: Two weekends ago, after IndyCar and Formula 1 racing events were cancelled due to coronavirus concerns, online motorsports magazine The Race organized what it called an All-Star Esports Battle -- a virtual car race using a racing game called rFactor 2, developed and published by Image Space. The event, in which real race car drivers also participated, reportedly drew more than half a million viewers through Alphabet (GOOGL 1.42%) (GOOG 1.43%) property YouTube.

Soak that in for a moment. Half of a million people, many of whom were likely planning on watching the real race, were content to watch a pretend, virtual race via the internet.

Video gamer in a dark room playing a PC game

Image Source: Getty Images.

It's not just the alternative to traditional sporting events that have seen a swell of interest of late either. Video games that are the basis of live events are still serving as digital battlegrounds thanks to the internet. The ESL Pro League, which regularly pits 24 different teams against one another in a combat game called Counter-Strike: Global Offensive, reported a 27% year over year increase in online viewership with its March 16 event. (AMZN 1.49%) property Twitch, which lets individuals sell subscription-based access to their game-play video streams, also saw an increase of traffic of 10% last week, as a growing number of self-quarantined individuals look for entertainment, according to data from StreamElements.

Publishers and promoters

The surging interest in esports and video game voyeurism isn't tough to understand. What can be a bit tough is pinpointing where the money is flowing to, and how to capitalize on it.

The growing, general interest in esports is clearly good for game makers like Activision Blizzard (ATVI), developer of the Overwatch game franchise -- another popular esports combat game complete with an organized league owned and managed by Activision itself.

Like any other league, Activision monetizes consumer interest in watching others play the game by selling tickets to events, and selling sponsorships of those events. The first physical match scheduled for this past weekend was cancelled, and the rest of the season's schedule has been reworked.

However, Overwatch matches were already viewable on YouTube. Activision Blizzard and other esports league organizers can therefore still facilitate matches that would have been played in front of an actual crowd without a severe hit to viewership. Online viewership may soar now, however, with new fans stumbling across online Overwatch match play ending up hooked.

Interest in a game's league play will ideally inspire the purchase and play of that game by non-professional gamers.

The middlemen win

The real winners of the reheated craze, however, are the technology middlemen that connect professional video gamers and amateur enthusiasts. That's chiefly Alphabet and Amazon, which operate YouTube and Twitch, respectively.

Google shut down its official gaming video app -- called YouTube Gaming -- a little less than year ago, but it hasn't abandoned the potential of video games as a content topic. Access to Activision Blizzard's esports league play is an official, exclusive relationship meant to jointly drive traffic to the video platform.

Noteworthy is the fact that Activision's Overwatch League was Twitch's second-most watched channel on Twitch before Activision abandoned it for more fruitful (or at least less crowded) waters. Twitch has also reportedly lost ground on the heels of defecting personalities and professional video game players like Tyler 'Ninja' Blevins, who left Twitch to take his channel to Mixer, another rival gaming video site developed by Microsoft (MSFT 0.46%).

It matters. Twitch's total hours of video viewing slipped 1% during the fourth quarter of last year, according to data from Streamlabs and NewZoo, versus a 33% increase in viewing hours for Mixer. Meanwhile, YouTube Gaming Live saw a 46% in hours watched between the first quarter and the fourth quarter of last year.

Twitch remains the 800 pound gorilla in the room, however, in terms of total hours watched, and could still leverage its sheer size and Amazon's deep pockets to fight back.

A means to an end

Keep it in perspective. While the coronavirus outbreak has put lots of new eyes on esports and game streaming, and given these businesses a chance to gain greater popularity, these aren't game-changing ventures for any of the companies behind them. SuperData estimates Twitch drove about $1.5 billion worth of gaming video content revenue for Amazon in 2019, which is apt to be a little more than YouTube's gaming content contributed to Alphabet's top line. Those are only tiny fractions of those organizations' annual revenue tallies.

The direct revenue video game views create is decreasingly the point though. The real money, as is the case with professional sports leagues, is sponsorships and licensing -- monetizing the interest in indirect ways. For Amazon, that may be sales of video games and generating interest in its own video game development studio. For Alphabet, YouTube's gaming content would be a great way to funnel people toward its cloud-gaming service Stadia.

In other words, pay attention to what these platforms are doing with the extra traffic they're now experiencing, and how they're using this current traffic surge to better position themselves -- like Google price cut for Stadia -- to tap into a global video game market Newoo says was worth around $150 billion last year.