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  • Subject area(s): Marketing
  • Price: Free download
  • Published on: 14th September 2019
  • File format: Text
  • Number of pages: 2

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Executive Summary

This report provides an analysis and evaluation of the current and prospective future profitability, financial liquidity and stability of E-Sport (Electronic Sport) for Norling PLC. These analysis include trends in the sector, phenomenal rise from its humble beginning as a pass time game to what it has become today. The rise of this sector in terms of investment opportunity is huge as its audience tend to be young and hence a market that is ready to be explored at its current infancy. The report finds that the business opportunity of the company in its current position are very positive in terms of financial and social profit as well as business expansion. [111]

Table of Contents

Introduction

There are many ideas and stories about E-Sport (verbally or written) which has managed to raise eyebrows but they all agreed that this phenomenon known as E-Sport has really evolved from its infancy in the early 1980s to what it is today. This report was commissioned to look into investment opportunities in E-Sport and to recommend ways of entering the market. The research draws attention to the fact the popularity of E-Sport has continued to increase and its marketability is also on the increase with many countries and companies already drawn into the phenomenon. [94]

Findings and Analysis

What is E-Sport? That is the million dollars question. From its humble beginning, in the late 1940s, as a slot machines to what it has become today, the computer game has come a full circle and still growing. The investment in the industry is a continuously evolving market. SEGA which is the forefront of the industry has cut a niche for itself as well as other games and consoles makers like Nintendo, Microsoft, Electronic Art (EA), etc. and the market is fast rising - fast into a multi-billion pound industry. (89)

This is a new trend that is gradually taking the market in leaps and bounds. E-Sport is a computer generated games. The size of E-Sport market, current estimate of £137 million per year, is set to more than double in years to come according to a predicted value of £330 million on the sector within two years, and further monetary increase as the popularity continues to grow. Further studies reveal that this market's increase will be matched with an increase in sales and production of popular and interesting video games from producers to gamers. Since the second half of 1990s, an increasing number of rival games, designs and producers had appeared on the market. (Pearson, D. 2015) [114]

In the last financial year of 2015 it was projected that the worldwide E-Sport industry made total revenue of nearly £531.35 million that year. With Asia at the forefront of E-Sport market income with over £228 million in revenue, North America is around £173 million, and Europe has £122 million and the rest of the world for about £20.6 million. Total worldwide E-Sport revenue is projected to reach £1.3 billion by 2018. And this is excluding TV deals and sponsorships that could be generated with the rise in global interest. There is a market forecast of about 43 percent increase on its year-on-year growth. (Gaudiosi, J. 2015) [104]

Just like any other growing market the water is unknown, but the outcome is rewarding. With introduction of every new game or consoles there are always high demand and specification that comes with it, in 2012 the gaming industry generated almost £151 million within 24 hours of the release of Call of Duty: Modern Warfare 3 in November of 2011 and it rose to well over £1 billion before the end of that year and Grand Theft Auto V, did equally good with sales of not less than 33 million copies and sales turnover was put at £1.3 billion, and that's excluding other peripherals sales that came with game's launch. With little bit of imagination and ingenuity any good story (book or TV) can be turned into video game. This has made video gaming virtually available on all electronic platforms with all manufacturers making their devices game friendly. In terms of retail, games consumers also made a significant contribution to the British economy spending £2.5 billion in 2013; considering only UK-made games, this spend generated £53 million in GVA (Added Gross Value) in retailer margin. (www.bfi.org.uk. 2015) [185]

With this expansion mainstream companies like Coca-Cola and Red Bull are investing in it through brand advertising and sponsorship deals; though some companies are yet to catch up with the trend. Product advertising accounts for a large chunk of the market revenue today, and is on course to reach £1 billion by next year. Nonetheless it's hard to forecast if E-Sports sponsorship will ever reach the level of traditional mainstream sports in terms of advertising and sponsorship revenue generation, but the recent TBS E-Sports TV deal and ESPN's television coverage of E-Sports with the X-Games and The International will only help traditional marketers test the E-Sports waters. Though currently most E-Sport broadcast still remain online event with Twitch leading the way, it is expected to expand fully into mainstream television has been done in the US with ESPN allotting air space for the game airing. (Gaudiosi, J. 2014) [145]

To be able to invest in E-Sport we have to understand what is involved and what has made it a global interest especially among the youths. It has been noted that the phenomenon is as old as the first computer has been in our modern day way of life. The first noted official computer game competition was held by Atari for the Space Invaders Tournament, in 1980. It attracted about ten thousand contestants. This competition, and others like it, in subsequent years, spread the beginnings of what would finally be known as “E-Sport”. (Tyler F.M. Edwards. 2013) (93)

It should be noted that the financial investment in the video game industry is rewarding and it's fast growing in its global expansion and reach. And it's a market with far more potential than has been given credit to by various researchers. In the past decade or two, the entertainment industry has seen its value increase significantly by the emergence of video game in the industry. Though much studies has not been done regarding these market it will be noted that marketing and production has addressed the processes that create value for companies and consumers in the context of video games which are now available on multiple device like consoles, portables, mobile devices and through retail outlets and online. Its value is as endless as imagination for creativity. (Marchand, A. and Hennig-Thurau, T. 2013) (128)

There are currently no foreseen risk in investing in E-Sport as the industry expands. But the only potential problem will be forming a winning and dedicated team with team spirit. With right incentives and investments that can be overcome

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