Video games started a dramatic advancement from its inception and today, the former children’s casual pastime evolved into ‘eSports’ where professional teams endlessly compete for both fame and big money. Organized video gaming is impacting global economy in the entertainment sector and you wouldn’t be wrong to say that it has really taken Australia by storm!
Before the advent of COVID-19, ‘eSports’ earned a spot among the globe’s fastest-growing entertainment sectors as well as one of its largest. Even while the pandemic was raging on, it continued to grow, hitting over 240 billion in revenue generation on a global scale in 2020. Australia can lay claim to a huge portion of this growth.
What are E-sports?
Also known as electronic sports, e-sports is an umbrella term describing organized and competitive video gaming, especially professional gaming that attracts a huge audience. According to the IESF (International Esports Federation), e-sports is a highly competitive sport featuring gamers who leverage their mental and physical capabilities to contest in multiple games in an electronic, virtual environment.’
E-sports became even more interesting when the betting sector incorporated it into the gambling scene where bookies feature e-sports games that can be wagered for real money. Incentives like no deposit bonus in Australia have continued to attract both newbies and experienced gamblers into e-sports, further flourishing the online gambling scene
How E-sports Impacts Australia’s Gaming Economy
As earlier mentioned, $240 billion was the figure recorded as the global revenue generation in e-sports during the peak of the COVID-19 pandemic in 2020, and according to reports from gaming experts, the expected figure for the end of 2024 is $294 billion. Out of these colossal funds, Australia’s digital games industry which has become a base for a developing games industry can lay claim to $226.5 million in revenue collection in 2021 – an increase of 22% on its 2020 figure. A breakdown of this figure shows that overseas markets contributed a massive 83% with just 17% coming from the domestic market.
The revenue is generated by millions of Australian citizens and foreigners who constantly engage in e-sports and virtual competitions as active participants and spectators. Most popular among the games they play include Counter-Strike: Global Offensive, League of Legends, Fortnite, Dota2, and Overwatch, among many others. All the mentioned games have what is referred to as local ANZ (Australia and New Zealand) leagues both of which go before the global championship qualifications. Other popular games that host regular competitions include the likes of Rocket League, Call of Duty, and FIFA. All these games come complete with prize pools that are nothing short of staggering. More often than not, they can come in excess of AUD 100,000.
With that said, you must acknowledge the fact that the Australian gaming revenue generation is posed for further enhancements. This is going to be made possible by the substantial state and federal tax incentives which are part of the latest introductions in the industry. The DGTO (Digital Games Tax Offset) which became effective in 2022 will make it possible for studios to claim 30% of eligible expenses. In addition, there are state-based programs that complement the DGTO, with Victoria, South Australia, and New South Wales offering 10% extra. This also includes Queensland offering 15%.
Comparing Tax Offsets in Australia and Other Major Gaming Countries
Countries like the United Kingdom and Canada have leveraged Tax offsets (a tried and verified mechanism) to effect exponential growth in their digital games industries and now that the sector has 40% as the minimum for incentive, Australia will be better positioned to become one of the most serious global players in game development.
The local gaming industry in Australia is not doing badly as it has already recorded over $270 million worth of investments since the latter part of 2020. In addition, they already have their 10-year expectations mapped out and according to expert projections, they may well become a billion-dollar industry.
Moreover, Digital game development is poised to become a fundamental backbone of a creative, modern, and digital, Australia. This will make virtual games involve all media types from sounds to animation, cinematography, music, and more. Added to the above-mentioned is the fact that games production and the direct economic benefit, add talent, complexity, and a variety of transferable prowess to the economy.
Sponsorship Opportunities, Major Events, and Economic Impact
The growth of esports and virtual competitions is further fueled by sponsorship, advertising, and partnership. Brands gain recognition through esports’ marketing power with A-listers like Red Bull, Intel, and McDonald’s sponsoring the majority of Australian teams and tournaments.
Some of the major events that get huge revenues rolling in include The Melbourne Esports Open which is listed among Australia’s largest eSports events, generating revenue in millions from both locals and tourists.
Apart from the above-mentioned, Australia has witnessed several brands from different industries investing huge funds in eSports sponsorships. Good instances are a League of Legends champion team and Chiefs Esports Club that secured L’Oréal Paris Men Expert’s sponsorship deal. Another is KFC Australia which takes up the sponsorship of the Overwatch Contenders Australia league. Other prominent sponsors include Red Bull and Adidas, and several local competitions have secured sponsorship deals from HP Australia countless times.
One revenue-generating opportunity that cannot be overlooked in the Australian esports gaming industry is streaming. Professional players and streamers are always at liberty to monetize their online content through subscriptions, adverts, viewer donations, and more. As a country, Australia has produced several high-profile streamers including the likes of Loserfruit and Muselk who can boast subscribers in millions and enjoy massive financial success. All these are testaments to the fact that esports is making enormous contributions to individual wealth and to the country as a whole.
Wrapping Up
As the eSports landscape in Australia continues evolving, its future becomes brighter with promises of transformative changes and exciting developments. This exponential growth is obviously a result of its educational and economic impact on the country. With its capacity to create employment opportunities, drive tourism, and provide the country with more entertainment options virtual esports and motorsport game competitions are going places, and like traditional sports, they may not be far from becoming mainstream.
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