Introduction: The Changing Trading and Investment Landscape

The investment world, which previously relied on fund managers or advisors and was only accessible to high-net-worth individuals, has evolved with many alternative investment options now available to individual investors. A new wave of investors is also entering the alternative investment market because it allows them to choose direct investing while giving them more control over their investments. Exchange marketplaces have also advanced, with every industry experiencing technological advancements in recent years. This has altered the way investors consider investing and interact with trading platforms.

As markets evolve, an increasing number of new assets enter the market. The alternative investment sector is an ever-changing industry, and the digitalization of trading platforms and investment asset classes is expected to create new opportunities. For example, NFTs (non-fungible tokens), which are collectibles of digital artwork, sports tokens, or trading in video game avatars, have become extremely popular in recent years.

The prices of these new assets have often eclipsed millions of dollars because they are easy to access, and an ordinary person with deep knowledge of a specific industry can monetize his or her knowledge by trading these assets. Furthermore, the craze for creating and selling NFTs has spread to many different areas, including sports and online gaming. The most popular type of NFT game is a play-to-earn game, which allows gamers or users to find NFTs within the game, which can then be stored in a wallet and eventually traded for fiat currency. A growing number of Esports organizations are embracing NFTs and digital assets to diversify their revenue streams by reaching a new customer base already, but these companies can go a step further and team up with reliable marketplace operators to enable peer-to-peer trading of e-sports players and assets.

The outlook for the Esports sector

Esports are becoming more popular because of global digitalization. The COVID-19 pandemic forced lockdowns and social distancing standards were introduced by almost every country in the world back in 2020, and these stringent mobility restrictions forced people to turn to digital and virtual platforms for entertainment purposes. With several end users organizing online tournaments of well-known or well-liked games, there has been a rise in Esports events and the demand for online video games over the past two years has remained elevated. The number of people watching Esports events has also increased meaningfully, which suggests Esports now has a growing fanbase.

Exhibit 1: eSports audience size worldwide from 2020 to 2025, by type of viewers (in millions)

Source: Statista According to Research & Markets, the global Esports market will reach $3.57 billion by 2027, growing at a 21.3% compounded annual growth rate (CAGR). The market is driven by live streaming, investments, engagement activities, and infrastructure for the league tournaments. Furthermore, approximately 291.6 million people are expected to watch Esports by 2024. In the near term, there will be more competitions and events with long-term investment opportunities.

The Massive Opportunity for Esports Companies To Monetize Their Assets

The popularity of Esports has skyrocketed recently, transitioning from a segment of sporting culture to a major form of entertainment all over the world. Online video gaming/sports is no longer a leisure activity. As a result, it appears that offering a trading experience in collaboration with a marketplace operator could be beneficial for the industry as it will result in strong growth due to a higher level of engagement among Esports viewers. This has already been demonstrated by a few sports-related NFTs that have seen an exponential increase in value since their launch. Traders and investors can trade and invest in Esports players using an Esports trading platform. This will also be a cost-effective method of producing various types of digital collectibles, such as limited signed player cards and digital merchandise, which investors can purchase, providing Esports companies with new profitable opportunities.

The Esports market is already gaining traction, and with ticket sales shifting from the stadium and toward the Internet, the digital, streaming, and merchandising segments are gradually accounting for the majority of this market growth.

Exhibit 2: Esports market revenue worldwide in 2022, by segment

 Sponserships: 837.3M 

Media Rights: 207.8M

Publisher Fee's: 130.7M 

Merchandise & Tickets: 107.9M

Digital:53.9M Streaming:46.3M 

(Source: Statista)

Companies in the Esports industry already have access to a massive, valuable dataset of Esports players. Using these data to create a trading mechanism for Esports fans could be a big deal in an era when illiquid but valuable assets are increasingly being monetized through innovative technologies.

As the digital asset and Esports markets continue to grow at an unprecedented rate, Esports companies seem well-positioned to make the most of this market opportunity by combining the features of these two fast-growing markets.

While many companies can assist with the development of a trading platform for Esports companies, next-generation exchange and trading technology provide a cost-effective and comprehensive software solution that enables the launch of a fully compliant, end-to-end exchange platform in a matter of days without the need to write a single line of code. Building trading infrastructure through traditional marketplace operators is expensive and time-consuming, which is where cloud-native solutions come in as such solutions shorten the time it takes to enter the market which will allow Esports companies to capitalize on this market opportunity today rather than spending years developing technical infrastructure. SaaS-based marketplace solutions can support more than 1.5 million transactions per second, which is among the best in the world today and the company also charges fees based on website traffic, which adds much-needed flexibility to ensure clients do not pay more than they should.

Conclusion

With global digital transformation, Esports has exploded into the mainstream in recent years. This market can provide profitable opportunities for Esports companies as well as investors seeking exposure to alternative asset classes. While purchasing or investing in in-game NFTs or digital assets is one method of gaining exposure, a fully functional trading platform that allows trading of Esports players will offer a simple, effective, and consistent investment opportunity. Deep-tech trading infrastructure can offer advanced and scalable solutions, removing technological and operational barriers that creators may face. This will also make trading easier and faster, reducing time-to-market.