Esports: the rise of electronic sports in Latin America
According to a recent investigation by Newzoo, Brazil ranks third in the digital audiences in the world market of electronic sports, with relevant figures if it is observed that two years ago it did not appear on the radar of the statistics.
The video game industry is one of the most important in the world with annual revenues of around 1 billion dollars. In 2018, 12% of the world's electronic sports fans were Latino. Figures that confirm how this industry has ceased to be a hobby to become an important market.
According to a recent study by the analyst firm of the video games and eSports market, Newzoo, Brazil occupies the third place in the digital audience in the world market of electronic sports when two years ago it did not appear on the radar of statistics.
This is also due to the increased registration of teams to eSports events, an average of 667 teams making a total of 3,335 people for a single championship totally online.
In exact numbers for a championship in Latin America, Brazil leads the entries with 492 teams, followed by Argentina with 128, Chile with 27, Paraguay with 12 and Uruguay with 8.
On the other hand, the increase in the number of live transmissions that is being generated the world includes Latin America, Russia, China and Africa (Angola), generating a greater presence in the market.
Audience numbers triple each year, making eSports not only one of the big events but also a new business model with increasing profitability for brands and sponsors.
TV AZTECA BETS ON TOURNAMENTS
Mexican television giant TV Azteca is investing in Allied Esports Entertainment, a company that hopes to capitalize on the growing world of competitive video games. Azteca has bought $ 5 million in shares in Black Ridge Acquisition, which will become Allied Esports following its pending acquisition of two nearby property brands.
The goal of Allied is to operate in the field of electronic sports, distribute the content generated in those places and sell to viewers in a new platform of online tournaments that will be launched next year.
Controlled by Mexican billionaire Ricardo Salinas, Azteca will be both an investor and a strategic partner, combining its talent and massive audience with Allied's experience in sports. The two groups will create a 24-hour electronic sports channel in Mexico and help promote games throughout the region, initiatives aimed at a younger and more elusive demographic.
Global growth has stimulated the demand to televise sports. In the United States alone, television networks from ESPN to TBS and CW broadcast sports content, be it live games or produced segments.
Azteca's flagship network carries the best games of the main soccer league in Mexico and the National Football League, which offers a series of potential opportunities to promote digital sports matches to fans of traditional sports.
Allied and Azteca joined earlier this year in an event called "Nation vs. Nation," which included US players battling Mexican players in a title called PlayerUnknown's Battlegrounds. The transmission of Azteca reached more than 2 million people.
The two sides will share the revenue generated by their joint efforts. Allied intends to partner with more strategic investors once the acquisition is completed.
Salinas is not the only Mexican billionaire who has shown interest in the world of digital sports. Germán Larrea, who controls the mining company Grupo México SAB, has recently opened 13 stages called "The Place to Play" and plans to add 10 more before the end of the year. For these spaces, they were inspired by similar places in Las Vegas. In Mexico, these are located right next to one of Larrea's other businesses, movie theaters.
Black Ridge is a special-purpose acquisition company, an asset-free entity that raises money to finance a future purchase. Sponsored by Black Ridge Oil & Gas, it completed its initial public offering in October 2017, raising $ 138 million.
In December, Black Ridge announced that it was buying Allied Esports International, an electronic sports entertainment company, and WPT Enterprises, the creator of the World Poker Tour, both owned by Ourgame International Holdings, for approximately $ 150 million.
The new company, called Allied Esports Entertainment, will have a business value of approximately 214 million dollars and will be listed on the Nasdaq under the symbol AESE.
The agreement originated as a discussion about poker assets before expanding into a broader electronic sports agreement. As part of the investment, Azteca will receive access to the World Poker Tour video library to broadcast the previous seasons in Mexico, and the two will join in poker events.
ESPORTS MORE PROFITABLE THAN BASEBALL
The electronic sports, or esports, could not be of the general knowledge, however franchises like League of Legends, Player Unknown Underground or FIFA are names that resonate in a wide collective, because many of these games have years being preferred of more than one generation and are responsible for this segment of the market represents in Mexico 1 billion 400 million dollars.
This figure positions Mexico as the first country in the region where the consumption of video games remains in the crown and where the average annual growth has been 6.6% in the last five years. For this reason, and because of the opening of certain entertainment segments around video games, is that eSports are revolutionizing this industry at the local level.
The esports market could grow up to 30% in the next five years and where investment from different entertainment companies could come through tournaments or around eSports cups. Mexico is a country where video game culture grows and is loyal to this type of format.
If you take into account that one of the sports that is having the biggest boost in the country is baseball, because according to the executive the figure that will be allocated to their support will be 350 million pesos, the sport has not yet shown tangible gains as the eSports are having. The creation of the Office of the President for the Promotion and Development of Baseball (ProBeis) seeks to promote this sport, however, the income that can reach is less than 1.4 billion dollars generated by eSports.
The penetration that esports have is also focused on young people who in the future will be the consumer force of companies, betting on investing in them is one of the trends that companies are having at the regional level.
Competitive videogames have an audience of more than 380 million people worldwide and are on track to become a billion-dollar industry this year, according to Newzoo research firm.
While much of that interest and money is concentrated in Asia and the United States, Mexico is among the 10 best in the world in sports enthusiasts, estimates Newzoo. The country has 58.6 million players, a number greater than the total population of South Korea and a sporting audience of 11.2 million.
Worldwide, the growth of esports was 32%, while the film industry grew from 2018 to 2019 only 5%.