Overview of the Esports industry

Although it began as an underground activity, Esports (aka electronic s

ports) has become one of the fastest growing industries of the 21st century. Esports has become its very own entity, with its own tournaments throughout the year, professional players, teams, and games for fans to follow worldwide. It is basically competitive video gaming where people play against each other either online or at events, usually for a cash prize. 

Viewers can watch games live online via streaming platform, with larger esports tournaments pulling in millions of spectators. Global revenues from esports, which includes advertising, sponsorship, merchandise, and ticketing, rose 33.9% year on year to reach $660 million in 2017. This is expected to hit $1.5 billion in 2020.

Some of the biggest risks Esports companies face

Legal & Regulatory

Widely growing and unregulated betting & gambling market pose compliance challenges for esports companies. There have been a number of government legislation changes or even bans as seen in China recently with some games.

Emerging Risks

The industry is still in the early stages of development, competition can be fiercer and costs can run high with new entrants vying for position and new unforeseen risks continue to appear.

Event Risks

The reality is that mass gatherings like esports events are vulnerable to attacks and a great number of things can go wrong. Event organizers must take all potential threats to security very seriously when dealing with such large crowds.

Why is Insurance for Esports Companies Important?

The esports industry is going through rapid change and growth. The risks that are present in the gaming and esports industry is similar to other business risks, but there are also exposures unique to the industry. Maybe you’re hosting a tournament where the venue requires liability insurance to book the space. In the gaming world, you want everything to go smoothly and according to plan. It is important to have the right types of coverages in place to mitigate any risk exposures that may arise through your business operations in esports and gaming. 

In addition, there are higher barriers to entry as more sports move towards a franchise model. Teams need to work harder and consider ways to protect themselves from the associated risks and increased costs. As levels of corporate investment increases in the industry, teams need to demonstrate to investors that they are protecting themselves from the unexpected.

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What Insurance do Esports companies need?

How much does Insurance for Esports Companies cost?

An insurance quote for an esports company will depend on specific variables including:

  • Operations occurring
  • Expected revenues
  • Number of employees
  • Value of gaming equipment 
  • Event Size & Location

Types of Esports Companies that need Insurance

The Esports industry have given birth to a plethora of new opportunities and markets in the space. Esports, which many can argue is the offspring of the digital gaming era, has made significant strides, roughly valued at $903M in 2018. From traditional competition setups to real Gaming Sports Leagues, the esports industry has grown to include various components made up of a wide range of companies. These include:  

  • General Gaming Facilities
  • VR facilities
  • Tournaments / events 
  • Esports teams 
  • Esports organizations 
  • Game & Software Developers 
  • System & Console Developers

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