In recent years, there has been a lot of buzz around the potential explosion of esports. However, the esports sector is now experiencing a market correction in 2023, with companies reducing headcount, cutting advertising budgets, and even closing projects. This signifies that esports is moving beyond hype and easy money, and businesses that prioritize substance and sustainability will thrive.
These changes also have implications for esports betting. It’s not about exaggerated claims of explosive growth anymore. The focus should be on understanding the true essence and measure of growth. Gambling, in general, is a recession-proof industry, and 2023 will be a year for esports betting to assess its sustainable growth.
At PandaScore, we believe that esports betting will continue to grow steadily. Rather than relying on tournaments to drive growth, offering a comprehensive and robust product is crucial for operators and suppliers. In 2022, operators who joined PandaScore saw an average increase in turnover of 33% for their esports betting product. Overall turnover on Winner and Main markets grew by 61% compared to 2021, while side markets betting grew by 54%. This indicates that interest in these markets and products like player props is not limited to new players joining the Main markets.
In terms of the esports sector itself, there are positive signs of sustainable growth in 2023. The esports calendar is becoming more stable, with more consistency across various game titles. This allows operators to offer consistent content to bettors. Lower-tier tournaments are also gaining consistency and filling the gaps left by top-tier competitions.
The popularity of CS:GO will be tested with the Central Europe Finals in Malta in February. Valorant, endorsed by Riot Games, continues to make strides as an esport and betting product. Regional and locally backed tournaments have seen a significant increase in betting volume, with margins remaining strong.
Regulation and diversification are key factors to monitor in the esports industry. The US market’s state-by-state legalization of sports betting has been successful, but esports regulations vary and can impact the performance of the vertical. Specific legislation and understanding of the structure of esports competitions and calendars will be rewarded. Additionally, there will be a shift in how data is provided and accessed, with operators seeking esports specialist providers and tailored products.
Despite the market correction, the viewing audience for esports continues to grow, indicating that the customer base is not shrinking. To achieve sustainable growth in 2023, partnerships based on robust products, research, and development will be crucial. At PandaScore, we prioritize the long-term growth of the esports betting vertical and work with our partners on a revenue-sharing basis.
