The Remarkable Rise of ‘eSports’

How Gen Z’s love of gaming is fueling a movement of competition, ingenuity and community
Posted February 17, 2017

Last year, the video gaming industry generated more than $30 billion in revenue in the U.S., according to data recently released by the Entertainment Software Association. To put this into perspective, this is more than the annual revenue generated by the NFL, NBA and MLB – combined.

It’s no surprise the gaming industry has become a major player in the retail industry, with a diverse consumer group spanning all generations. The ever-evolving industry encompasses video games and consoles, online gaming, mobile gaming apps and virtual reality. This movement has been amplified, thanks to Generation Z, which comprises those between the ages of 7 and 22, and is quickly surpassing the quantity of millennials. 

The popularity of “eSports” (electronic sports) has started to capture the attention of mainstream consumerism, and this compelling growth trajectory is hard to ignore. 

The earliest known eSports video game competition was around 1972 at Stanford University. The game was called “Spacewar,” and the winner took home a one-year subscription to Rolling Stone. Fast-forward 30-plus years to 2016, to the “League of Legends” World Championship. This video game competition was held over a three-month timeframe, with elimination competitions taking place in sold-out arenas across several U.S. cities (San Francisco, Chicago, New York and Los Angeles). Sixteen teams qualified for the tournament based on their performances in regional circuits and represented almost every country in the world. The championship went to the six-person team “SK Telecom TI,” a professional gaming team based in South Korea. The top prize was $2 million – a far cry from an annual magazine subscription!

The video game industry, largely fueled by Gen Z, and the amazing growth of eSports, can provide interesting insights for the retail industry. With an impressive momentum of growth, according to the Newzoo 2016 Global eSports Market Report, eSports is seeing about a 30 percent increase (year-over-year) in viewership and enthusiasts. Partnerships with major networks, such as ESPN, have helped eSports increase their following. Estimates show, in that same report, that by 2019, these trends will produce a whopping 215 million enthusiasts and 212 million occasional viewers for eSports events alone.

So why and how does the eSports phenomenon resonate so well with Gen Z? Based on a few of the core characteristics of this generation, the commonalities may lie within the following: competition, ingenuity and community.

These tournaments are highly competitive. Professional teams from around the world made up of men and women ages 18 to 34, play, practice (and practice some more) vying for spots at top championship events. Gen Z is mostly a competitive group, not necessarily against others, but with themselves. This group sets high expectations around personal achievement, and gaming is a fun, engaging and competitive approach to problem-solving.

The ingenuity and creativity that goes into video game development is “warp speed” impressive. As one of the industry’s top consumers, Gen Z has been instrumental in influencing this industry’s rapid growth.  With an increasingly saturated market, video game development has surpassed many other industries in evolution, technological innovation and iterative speed.

The most impactful aspect of eSports’ success could be its embrace of the gaming community. This tight-knit community of devoted enthusiasts all share a strong commonality around gaming. Gen Z gravitates toward the communal: groups that share similar interests, ideas and goals.

So, what might retailers glean from the success of eSports in their own strategies to engage Gen Z? Perhaps it starts with embracing competition, ingenuity and community.

Myra is a principal within the retail market at MG2, an architecture and design firm based in Seattle. From established global retailers to the start-up brand about to make its mark – she enjoys partnering with clients seeking to be pioneers in their industry. By always raising the bar, she seeks to foster collaborative and creative partnerships that generate successful store design and implementation. She brings a constant curiosity of consumer behaviors, brand experience and a passion to retail and architectural design projects.