Amazon Isn't the Only One at the Big E3 Gaming Convention Showing Why eSports Is Booming
eSports is hot.

E3 2017, the world's largest video-game exhibition, is embracing the eSports craze.

The Entertainment Software Association, a U.S. video-game trade association that holds the annual event, announced this week that it is teaming with ESL, the largest eSports company, to bring the video-game competitions to the Electronic Entertainment Expo for the first time, according to a news release. E3 starts on Tuesday, though conferences began on Saturday.

"E3 is the biggest event in video games and eSports has one of the fastest growing audiences in not just video games but all of entertainment," Rich Taylor, ESA senior vice president of communications and industry affairs, said. "We are excited to partner with ESL and bring a dedicated eSports stage to E3."

The E3 eSports Zone will feature a full-size eSports stage and spectator seating. Competitions will feature top teams playing games such as Super Evil Megacorp's Vainglory mobile app and the new multiplayer, first-person shooter PC game, Quake Champions, by Bethesda and id Software. Amazon's (AMZN - Get Report) Twitch will stream the game play, and a simulcast will be available on E3's live-stream portal.

"With the growth of eSports over the past four years, we're now seeing more developers and publishers build games with a focus on competitive game play and eSports tools," Craig Levine, CEO of ESL North America, explained. "This creates a very exciting outlook for the future of eSports to have more game titles engaging new players and new fans."

Global revenue from eSports is expected to grow by more than 40% in 2017. That would put revenue at nearly $700 million, according to NewZoo, an eSports analytics company. A report released this week by Pacific Crest Securities says it is just the beginning, however, as analysts identify advertising, sponsorship and media rights as having the largest opportunity for growth in the industry.

While E3's adoption of eSports is a major step for the industry, 2017 already has seen growing interest in eSports. Here are the details.

Professional Sports
Professional Sports

Following the trend in Europe and South America of professional sports teams sponsoring eSports players and teams, those in the United States have started to follow suit.

In September 2016, basketball's Philadelphia 76'ers became the first team in North America to enter competitive gaming, according to Dexerto. The basketball team bought two teams, Team Dignitas and Apex Gaming, which compete under the Dignitas banner in games such as League of Legends, Counter-Strike: Global Offensive and Smite.

The National Basketball Association followed suit, announcing in February along with Take-Two Interactive Software (TTWO - Get Report) , publisher of NBA 2K, plans to launch a new professional competitive gaming league starting in 2018 for the world's best basketball gamers.

In April, the New York City Football Club also picked up soccer gamer Christopher Holly to participate in FIFA tournaments.

Pacific Crest Securities' report also notes league franchises may be expensive for even large endemic teams, which may force them to partner with traditional-sports-team owners.

Colleges and Universities
Colleges and Universities

It is not just the professionals who are investing in eSports, however.

Although the NCAA does not sponsor eSports, many colleges and universities have eSports varsity teams and clubs on their campuses. Since 2014, colleges have began giving athletics scholarships to eSports players, and the University of Utah became the first Power Five Conference member to do so in April.

In addition to providing scholarships to top players, the United Kingdom's Staffordshire University will even offer a course next year to help students learn how to make their way in a career in eSports and to put on eSporting events, The Sun reported.

The Big Ten Network and Tencent Holdings' (TCEHY) Riot Games, maker and publisher of League of Legends, announced in January that the network would broadcast select competitions of the online multiplayer game between Big Ten Conference universities. Eight live streams drew 2.1 million viewers, according to the Los Angeles Times.

Online Streaming
Online Streaming

To grow the audience of eSports, however, spectators need a place to watch it.

Amazon's Twitch dominates online streaming, grabbing 100 million unique viewers a month and 10 million people for an average of 2 hours a day in 2017, according to Pacific Crest Securities' report.

Twitch may, however, have some more competition. In March, Faceit announced Google's (GOOGL - Get Report) YouTube won exclusive rights to its eSports Championship Series for Counter-Strike: Global Offensive, according to Venture Beat.

In December, Riot Games also announced a $300-million deal with Major League Baseball's BAMTech for exclusive rights to stream its League of Legends competitions on MLBAM, according to the League of Legends Championship Series' website.

Pacific Crest analysts said they also sees opportunity for Facebook (FB - Get Report) to expand its coverage of eSports with its reach, data and emphasis on video.

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Leagues
Leagues

New leagues have formed in 2017, as well.

In May, Twitch announced in conjunction with Bandai Namco Entertainment America (NCBDF)  the Tekken World Tour. From June 16 to November, players around the world of Tekken 7, a fighting game, will compete for a grand prize of more than $200,000. Twitch will broadcast the tournaments.

Activison Blizzard (ATVI - Get Report) is also creating a professional Overwatch League for Blizzard Entertainment's team-based, online multiplayer first-person shooter game. It is supposed to begin later this year, though the Pacific Crest Securities report cast doubt on its execution by that deadline.

In the mean time, Blizzard announced in May that it is creating an amateur league called Overwatch Contenders. In addition to generating enthusiasm for the pro league, the league will help countries find players for the Overwatch World Cup to be held later this year, according to International Business Times.

Mobile Apps
Mobile Apps

Although a majority of eSports gamers play on PCs, the popularity of mobile app games is rising. Typically free to download, the games are accessible to anyone with a smartphone. Mobile apps, however, tend to have a less stable internet connection than PCs.

While E3 will have competitions for Vainglory, a three-on-three multiplayer online battle arena, Vainglory teams from North America and Europe participated in the first Unified Live Championships in May in London.

Additionally, Amazon announced on Thursday that it will hold a Mobile Masters Invitational later this year. All competitions will be in mobile apps, including Vainglory, Summoners Creek, and Hearthstone, a PC-based game that Blizzard Entertainment made into an app in 2015.

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