Publication date: 22 Oct 2020 Author: Dom Tait Practice Leader ESL and DreamHack merger point to a future of esports+ Brought to you by Informa Tech ESL and DreamHack merger point to a future of 1 esports+ Table of Contents: Straight Talk Consumer and Entertainment Services..................................................................2 © 2020 Omdia. All rights reserved. Unauthorized reproduction prohibited. ESL and DreamHack merger point to a future of 2 esports+ Straight Talk Consumer and Entertainment Services Omdia view The start of October 2020 saw news of the merger of ESL and DreamHack, both major players in the world of esports and gaming events organization. The separate brands will remain, but the pair will now operate under the ESL Gaming brand. In a COVID-19-hit world, a formal merger (the pair were already co-owned by Modern Times Group) makes sense as it will likely entail efficiencies in the way that competitions and tournaments are planned and run, but it also paves the way for an enhanced emphasis on esports and the gaming lifestyle, pointing to a vision for the future of this space. The global esports industry is valued by Omdia at $1.4 billion in 2020, and forecast to reach $2.6 billion in 2025, at a five-year CAGR of 13.7% across the likes of sponsorship, media rights, streaming advertising, and ticket sales. Yet esports—increasingly unfairly—still has a reputation for being something of a Wild West for investors, and the latter’s natural response to that uncertainty has been to partner up with prominent companies boasting strong reputations. ESL in particular has been a major beneficiary, counting a large number of major partnership deals worldwide with companies ranging from telcos to fast-moving consumer goods brands. In August 2020 alone, Omdia logged deals between ESL and a German beer company; a Brazilian entertainment company; two betting companies from the UK and Ireland; and the gaming hardware and peripherals company Razer. DreamHack, meanwhile, has a somewhat different focus. Their typical offering might take in a major esports tournament alongside the likes of cosplay, music, stand-up comedy, a place to stream fans’ own games, and various other attractions. The success of these events demonstrates that esports is part of a much wider trend for younger demographics to watch and interact with games content, thus an esports investment strategy should cover a far broader range of options for gaming and non-gaming content. Proof positive of this is the Fortnite game world, where more than 12 million people congregated to watch the rapper Travis Scott perform a single gig, or where film trailers or even entire films are screened. Meanwhile, gaming celebrities like Ninja have millions of subscribers eager to watch their content, while some streamers now even curate their own game stores and promote them directly to their followers. Perhaps most notably, in December 2019 streaming platform Twitch’s top channel was, for the first time, not a game. Instead it was the self-explanatory Just Chatting, which saw 81 million hours watched that month, with those figures only increasing since. Such examples all demonstrate the broader appetite of gamers—this is a demographic that can, and should, be offered far more than simply video games themselves. ESL and DreamHack’s timely merger can pave the way for a future of esports events that weaves in as many wider entertainment experiences as possible. Furthermore, once offline events return in earnest, an “esports+” approach to organization would provide © 2020 Omdia. All rights reserved. Unauthorized reproduction prohibited. ESL and DreamHack merger point to a future of 3 esports+ the perfect testing ground for demonstrations of companies’ new, 5G-enabled tech products, such as the latest VR and AR displays. The wider entertainment industry will be watching, and if ESL Gaming can provide a best-in-class live spectacle, its organizational expertise may prove to be in demand beyond the confines of esports. Straight Talk is a weekly briefing from the desk of the Chief Research Officer. To receive this newsletter by email, please contact us. © 2020 Omdia. All rights reserved. Unauthorized reproduction prohibited. ESL and DreamHack merger point to a future of 4 esports+ Citation policy Request external citation and usage of Omdia research and data via [email protected]. 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