What are e-sports?
The gaming industry encompasses many types of businesses and revenue streams. E-sports in general refers to the professional gaming market, where players can earn an actual living through their gaming skills.
E-sports in Thailand can be broadly divided into three pillars:
- Game Development and Publishing: the development of new games and/or the business of securing distribution licenses for games in various regions
- Event Organization: businesses which secure the right to organize events, such as official gaming tournaments
- Professional Gaming: individuals or teams who compete in professionally organized and broadcasted tournaments, or who stream their personal gaming sessions online
The way in which each segment generates revenue is shown below in Figure 1.
Figure 1: Thai e-sports industry types
The global e-sports market is expanding rapidly. NewZoo’s market research estimates that global e-sports revenues will reach USD 1.1 billion in 2020, mostly driven by media rights and sponsorships. South Korea, China, and the United States are the three most competitive e-sports markets in the world, as measured by total prize money.
According to NewZoo, Thailand is currently the 19th largest market for video games, generating USD 667 million per year in revenue. While most of this revenue came from traditional video game sales (not from e-sports), there is evidence of growing demand for e-sports in Thailand. There are an estimated 27 million gamers in Thailand, and Garena cited that in 2019, online views of Arena of Valor’s Season 3 tournament play have exceeded 51 million.
Figure 2: Images from professionally organized e-sports tournaments
What’s happening with the e-sports market in Thailand?
In recent years, there has been activity from both traditional businesses expanding into the e-sports industry as well as startups attempting to capitalize on the growing demand. In Thailand, corporate interest has been primarily driven by the telecommunications giants. Thailand, unlike the US or South Korea, remains a mobile-first gaming country due to strong mobile penetration rates and the high hardware costs associated with PC gaming. Accordingly, both True and AIS have begun supporting e-sports streaming and tournament organization, viewing the industry as both an opportunity to diversify revenue streams and as a channel to cross-sell their core products. Due to high capital requirements for game development and publishing, startup companies including Thailand’s Infofed and Indonesia’s Evos are targeting event organization and the professional gaming market to build up the competitiveness of Southeast Asia’s gamers.
What should we look forward to?
Figure 3: Thailand’s E-Sports University League
For the Thai market in particular, strong barriers remain for the e-sports industry. The largest barrier has been the mindset of traditional Asian society, which views video games as a childish indulgence. However, attitudes towards e-sports have gradually been improving, along with increased support from government institutions and universities. Per Garena’s estimates, successful players can earn as high as THB 5 million per year from streaming and competitions.
Higher education institutions, such as Bangkok University, have begun building curriculum on e-sports, which could help develop more competitive gamers from Thailand to compete an international level. According to Mr. Jirayod Theppipit, CEO of Infofed, other potential developments to look for in the Thai market could include official university leagues or a Thai national e-sports team. While COVID-19 has temporarily slowed the pace of investment into the e-sports industry, community activity has shot up during the lockdown. As the talent pool increases, industry experts foresee a boom in Thai e-sports once competitive tournaments resume.
From a financial services perspective, fintech has already played an important role in enabling microtransactions and wallets for purchasing in-game items. However, the rise of competitive e-sports also represents an opportunity for financial service providers to tap into a younger demographic who may be seeking access to bank accounts, wealth management products, and other financial services to support their rising income prospects. Similar to other athletic professions or influencer segments, e-sports can provide alternative marketing opportunities for financial institutions looking for new ways to connect with the younger generation of consumers.
Author: Krongkamol deLeon (Joy)