Same conclusion I came up with while researching this for a HF a few years ago. The market will certainly grow as # of fans increase. However, I don’t see that overcoming the significantly low spent per eSport fan (vs. the much higher spent for live sports fans). There was a decently convincing piece written by Baird, but which I thought was very flawed. They argued US interest in gaming would reach South Korean levels (South Korea has some unique reasons why gaming became such a national past time, which is unlikely to be duplicated in the US) and that some TV channels are showing eSports is evidence it will balloon (however, many gaming shows have come and gone with very limited success; anyone remember G4?).
The other point missed is that eSports is dominated by games (DOTA, League of Legends, Warcraft, CS, etc…) that have a very strong following among a select group of gamers. The masses aren’t really interested in these games. You might pick up some casual gamers for CoD and such, but I just don’t see them being that sticky.
All told, I think eSports in its current form is way over hyped by investors/Wall St. who never really gamed (Mario Cart 64 does not count) and many gamers who don’t understand markets. This all coming from someone who grew up playing those more niche computer games (btw, where the heck is HL3!?! Why hasn’t South Korea kidnaped and caned Gabe Newell yet for his crimes?)
That all said, I could see a potential lift in eSports in a different form with significant help from VR that expands to more engaging games for the masses (e.g. Wii did a decent job of capturing a new kinds of gamers, though temporarily) along with better placed in-game advertising. Ever since the tragedy that was Nintendo’s “Virtual Boy,” I’ve had little interest in VR. However, there is a VR experience spot in the Lower East Side and I must say I was pretty impressed.
i will say that i personally believe the battle royale format is much stickier than the market is giving it credit for. as a guy who has played virtually every shooter since goldeneye, the battle royale format provides an intensity and social aspect that no shooter has ever been able to provide. the spike in adrenaline you get by only living one life every 10-40 mins compared to living 1-2 lives every minute provides an incredibly more realistic and relatable experience. as (some form of) realism is at the heart of all game development, the battle royale format is just the first step in a paradigm shift for games in general. i can easily imagine how future iterations will provide similar intensity but with meaningful enough changes to keep players engaged (e.g. battle royale using medieval equipment, battle royale with more interactive environments, etc).
royale is any less viewer friendly that any other game format. battle royale is certainly more enjoyable to watch versus other FPS modes and FPS is more enjoyable to watch than other game formats. this is why gaming and gaming viewership has forever changed since Fortnite and PUBG hit the scene. only DOTA 2 players could ever be DOTA 2 fanboys because everybody else has no idea what’s going on. anybody can watch a dude with a pan run away from a guy with an AK and understand what is happening and imagine themselves in that situation in some way. battle royale is successful because it is the only truly relatable game mode ever.
PS. the new platoon mode in PUBG certainly has some potential. 50 vs. 50 battlefield. imagine 10 years from now there are continuous battles between countries or regions? like 100,000 north americans continuously fighting 100,000 europeans. that would be something no game has ever come close to doing. truly being a part of something much larger than oneself.