In recent years, esports has grown from a niche industry to a focal point of entertainment worldwide. So much so, that market researcher Newzoo claims that global esports revenues will top $1 billion for the first time in 2020. Of the largest markets by revenue, China will take first place totalling $385.1 million, followed by North America with $252.8 million. Blockchain in esports, however, could help improve a market that still has challenges.
These include its inability to protect gamers from fraudulent activities, unfulfilled payments, identity theft, a lack of a transparent system, too many ads, and competition scams.
That’s why innovative leagues and teams are turning to blockchain in esports to overcome these hurdles.
What are the benefits of blockchain technology in esports?
The Newzoo report goes on to point out that globally, the total esports audience will increase to 495 million people in 2020, with esports enthusiasts making up 223 million of that number. By 2023, the global audience is set to grow to 646 million, Newzoo said.
Such is the popularity of esports that some are of the opinion that it could become an Olympic sport. But even though it presents a lucrative opportunity through its competitive gaming, only a small percentage of esports players get rewarded.
For teams and leagues seeking a way of improving the industry, blockchain technology in esports can solve key challenges, improve the gamer’s experience, drive fan engagement, and present new business streams through innovative blockchain applications.
Perhaps one of the biggest hurdles with esports is its lack of standardisation and a fair self-sufficient ecosystem for all stakeholders, namely players, sponsors, media, game developers, and team managers. For a sector that has only really gained pace since the 2010s, esports has already garnered itself a reputation of overworking players, mismanaging contracts, and allegedly failing to pay its players. With the use of blockchain in esports, it can bring all stakeholders under one roof, enabling them to interact how they need to in a connected, transparent, and secure environment. Through this, the transfer of players, media rights, the fair distribution of payments, and collaborations can all be achieved efficiently.
When it comes to assisting teams drive additional revenue, blockchain technology is unlocking new innovations to both monetise and engage the fan base more effectively. By using flexible and interoperable blockchain platforms such as the ARK Core platform, Protokol are helping esports teams introduce blockchain solutions to generate revenue via fan tokens and digital collectables while enabling teams to engage more fans.
Another challenge the esports industry faces is the issue with advertisements. Consumers often don’t like these, and many of them use ad-blockers. According to Seth Ladetsky, senior vice president of sales and head of digital and esports revenue at Turner Sports, 70% of ads are not being seen on Twitch, a live streaming platform, which is popular for watching esports tournaments, due to ad-blocking. In order to overcome this marketing hurdle, the industry needs to ensure that sponsors and advertisers are getting a transparent and accurate return on investment. With blockchain technology in esports, companies can better engage and monetise their sponsors with a robust technology that is immutable and transparent. The technology allows sponsors and teams to gather provably-accurate data and better insight into engagement from fans while ensuring that the data is visible for all involved. Player, sponsor, and teams interactions can be set to be tracked on the blockchain, data is securely saved and can’t be changed by those involved. As a result, by sharing this immutable data, it helps to build better trust and stronger relationships with the sponsors and business partners.
Blockchain technology is also enabling the opportunity to unlock new revenue streams and business models within the esports industry. One way this is achieved is through tokenisation, which provides fractional ownership of a team. This means that there is more investment from a greater number of investors who have access to the market.
As the esports industry continues to grow, so too does the potential for fraudulent practices, such as illegal gambling and match-fixing, and the worry that players won’t be paid or paid fairly. With stakeholders concerned about getting paid for services, blockchain-enabled payments offer a viable solution. With smart contracts, payments can be programmed to automatically execute once predefined conditions have been met. Not only that but as the transactions are immutable and transparent, this means stakeholders will receive payment without the risk of it bouncing. This, in turn, increases the trust between stakeholders as everyone can see what’s happening on the network, which gives them a greater incentive for remaining in the community.
Turning to micropayments and in-app purchases, these are growing alongside esports sites and esports apps for mobile. As a result, consumers require secure and verifiable in-app purchases. By using secure blockchain networks and digital signatures, consumers can be assured about the purchases they are buying. The use of micropayments also means that developers can receive secure payments quickly and is a great way for fans to support gamers and creators.
Despite the growth of esports, there isn’t a self-sustaining ecosystem for stakeholders, with only a small percentage benefiting from it. To improve the industry, companies and teams should seek external support to determine how blockchain can be applied to help the industry grow efficiently and quickly.
As an expert enterprise blockchain provider, we at Protokol can help your esports team find the best solution with blockchain.
How Protokol can help
Protokol is a blockchain service provider that’s helping sports and the esports industry realise the benefits of blockchain technology. With the aid of flexible and adaptable blockchain platforms, we can create custom blockchain solutions that will improve innovation throughout your organisation while also helping you to understand that it brings greater trust and more transparent and collaborative ecosystems. With more streamlined ways of compensating players and getting immutable data to sponsors, the advantages it can bring are numerous.
Why not take the first step today and let Protokol help your team, league or organisation uncover the benefits of blockchain for esports. Book a free video consultation with our blockchain experts to discover your use case and explore how your organisation can best leverage the technology to better engage stakeholders, create collaborative ecosystems and more.