Probably one of the most prescient acquisitions of the last several years was Amazon's purchase of Twitch, the online video game streaming site, for what now looks like a bargain of $970M. At the time many analysts were puzzled by what was then Amazon's largest acquisition. By all reports, today Twitch is booming on every metric and is perfectly positioned to ride the eSports wave.

eSports (electronic sports) or competitive video game playing in front of spectators, has become one of the most engaging and watched forms of entertainment for the Millennial generation and Generation Z, not just in the US but globally. Some of the biggest followed eSports include games such as Fortnite, League of Legends, Dota, and Overwatch. eSports is a trend I've been following for the last 4-5 years and one that is rapidly growing but currently under-reported in the tech, entertainment, and mainstream media. This is likely due to the fact that it initially really started catching on in Asia, most notably South Korea and has since become a global phenomenon.

More than a dozen countries now show eSports on regular cable television with large consumer brands such as Nike and Adidas giving eSport teams and players large endorsement deals. Brands spent more than $500M on eSport advertising, media rights, and sponsorships in 2017 with consumers shelling out another $60M on tickets and merchandise. Each year fans pack stadiums with more than 50,000 people to see tournaments live. Professional leagues and teams have arisen along with full time players whose training regimes are as grueling as any pro athlete with as rabid of fanbases.

Some fun facts about the eSports industry:

More viewers watched the world finals for League of Legends than any game of the NBA Finals for the last 2 years.

Analysts forecast a CAGR of 35% over the next 5 years with the expectation of eSports becoming a billion dollar industry in the next year - a high growth market indeed.

Gaming and eSports is rapidly becoming pop culture with A list celebrities broadcasting their video game playing live to fans, furthering interest.

There are currently estimated to be 400M eSports fans globally, almost exclusively under the age of 35.

There is a huge amount of monetization opportunity here compared to traditional sports with the average basketball fan spending $15 a year while eSport fans spend less than $3 a year.

Little known is that most traditional live sports are actually seeing a declining fanbase with many Millennials/Generation Z not interested in watching the sports their parents did. Even the once untouchable American pastime of football has seen declining ratings. The theory behind this trend goes that shorter attention spans and cord cutting by younger generations means they are just not that interested in the format of traditional physical sports. Some interesting facts about traditional sports:

The average age of a Major League Baseball viewer is 57 with less than 50M fans in the US.

The average age of a National Football league viewer is 50 with about 250M fans globally.

ESPN in the last 5 years has watched viewership drop from 100M to 85M and it continues to plummet.

Am I predicting the imminent demise of traditional sports - certainly not! But I do foresee traditional sports becoming a much smaller percent of the entertainment market in the coming decade as eSports rises as a global mainstream form of entertainment. eSports as an industry has exponential growth ahead of it and is likely to remain a ripe area for investors and founders for years to come. A second order effect the growing mainstream visibility of eSports will have is to boost the growth of the $100B global video game industry.