The oldest professional sport teams can trace their start back to the mid-19th century, a period when casual past times such as baseball or football transitioned into more organized leagues.
Since this tipping point, pro sports has thrived around the world, and the business of sports has evolved into a multi-billion dollar ecosystem for teams, leagues, players, merchandisers, sponsors, broadcasters, and event spaces.
Today, this evolution still continues – and it is being driven by the emergence of eSports (electronic sports), an exciting frontier for fans and business alike.
Today’s chart breaks down the eSports boom, including data on the sector’s rapid growth, prize pools, and the most valuable eSports companies today.
Despite having a reputation in the media and in popular culture as being on the fringes, it is clear that gaming is now a truly mainstream phenomenon.
In fact, the global gaming industry has now eclipsed $135 billion in revenue worldwide – a figure that is twice as much as the film and music industries combined.
With hundreds of millions of avid fans around the world, demand to watch the most elite gamers has reached a fever pitch – and now, it’s not uncommon to see sold-out arenas, big name sponsorship deals, and massive prize pools in the name of eSports.
Defining the eSports Ecosystem
Like any professional league, eSports creates the foundation for an entire ecosystem of opportunities.
Players are central to the ecosystem, since they are the stars and they have their own personalities. One famous star is Kuro Takhasomi (KuroKy), who has brought in a whopping $4.2 million in prize money from Dota 2 tournaments so far. He has earned more than any other player in eSports.
Because the games played are mostly team-based, there is a crucial element of teamwork involved. eSports franchises are currently selling for millions of dollars. It’s worth noting that these franchises don’t just employ players – they also hire staff that can better ensure the success of players, such as coaches, trainers, and personal chefs.
Games and Developers
Some of the most important games in the eSports world right now include: Dota 2, Counter-Strike, League of Legends, Overwatch, Fortnite, and Call of Duty.
Leagues and tournaments can offer massive prize pools for players. The biggest single pool so far was $25.5 million, offered for a Dota 2 tournament in 2017 (“The International”). It’s the second-largest prize pool offered in any kind of sport, behind the U.S. Open (tennis).
Running eSports events is big money, and organizers of events can tap into sponsorship and fan revenue. Sometimes game publishers will organize the events, but third-party ones also exist in the ecosystem.
Sponsors like Coca-Cola, Intel, and Mercedes-Benz have shelled out millions of dollars to sponsor events and reach the massive audiences associated with eSports. In more recent news, SAP signed a deal to sponsor one of the biggest names, Team Liquid.
Broadcasters, both traditional and online (YouTube, Facebook Live, Twitch, etc.), are also in to get a part of the action. Recently, game developer Blizzard signed a broadcasting deal with Disney to broadcast Overwatch League playoffs on ESPN, ABC, and Disney XD.
What do you think is the most exciting part of the eSports boom, and why?
Visualizing the Biggest Risks to the Global Economy in 2020
The Global Risk Report 2020 paints an unprecedented risk landscape for 2020—one dominated by climate change and other environmental concerns.
Top Risks in 2020: Dominated by Environmental Factors
Environmental concerns are a frequent talking point drawn upon by politicians and scientists alike, and for good reason. Irrespective of economic or social status, climate change has the potential to affect us all.
While public urgency surrounding climate action has been growing, it can be difficult to comprehend the potential extent of economic disruption that environmental risks pose.
Front and Center
Today’s chart uses data from the World Economic Forum’s annual Global Risks Report, which surveyed 800 leaders from business, government, and non-profits to showcase the most prominent economic risks the world faces.
According to the data in the report, here are the top five risks to the global economy, in terms of their likelihood and potential impact:
|Top Global Risks (by "Likelihood")||Top Global Risks (by "Impact")|
|#1||Extreme weather||#1||Climate action failure|
|#2||Climate action failure||#2||Weapons of mass destruction|
|#3||Natural disasters||#3||Biodiversity loss|
|#4||Biodiversity loss||#4||Extreme weather|
|#5||Humanmade environmental disasters||#5||Water crises|
With more emphasis being placed on environmental risks, how much do we need to worry?
According to the World Economic Forum, more than we can imagine. The report asserts that, among many other things, natural disasters are becoming more intense and more frequent.
While it can be difficult to extrapolate precisely how environmental risks could cascade into trouble for the global economy and financial system, here are some interesting examples of how they are already affecting institutional investors and the insurance industry.
The Stranded Assets Dilemma
If the world is to stick to its 2°C global warming threshold, as outlined in the Paris Agreement, a significant amount of oil, gas, and coal reserves would need to be left untouched. These assets would become “stranded”, forfeiting roughly $1-4 trillion from the world economy.
Growing awareness of this risk has led to a change in sentiment. Many institutional investors have become wary of their portfolio exposures, and in some cases, have begun divesting from the sector entirely.
The financial case for fossil fuel divestment is strong. Fossil fuel companies once led the economy and world stock markets. They now lag.
– Institute for Energy Economics and Financial Analysis
The last couple of years have been a game-changer for the industry’s future prospects. For example, 2018 was a milestone year in fossil fuel divestment:
- Nearly 1,000 institutional investors representing $6.24 trillion in assets have pledged to divest from fossil fuels, up from just $52 billion four years ago;
- Ireland became the first country to commit to fossil fuel divestment. At the time of announcement, its sovereign development fund had $10.4 billion in assets;
- New York City became the largest (but not the first) city to commit to fossil fuel divestment. Its pension funds, totaling $189 billion at the time of announcement, aim to divest over a 5-year period.
A Tough Road Ahead
In a recent survey, actuaries ranked climate change as their top risk for 2019, ahead of damages from cyberattacks, financial instability, and terrorism—drawing strong parallels with the results of this year’s Global Risk Report.
These growing concerns are well-founded. 2017 was the costliest year on record for natural disasters, with $344 billion in global economic losses. This daunting figure translated to a record year for insured losses, totalling $140 billion.
Although insured losses over 2019 have fallen back in line with the average over the past 10 years, Munich RE believes that long-term environmental effects are already being felt:
- Recent studies have shown that over the long term, the environmental conditions for bushfires in Australia have become more favorable;
- Despite a decrease in U.S. wildfire losses compared to previous years, there is a rising long-term trend for forest area burned in the U.S.;
- An increase in hailstorms, as a result of climate change, has been shown to contribute to growing losses across the globe.
The Ball Is In Our Court
It’s clear that the environmental issues we face are beginning to have a larger real impact. Despite growing awareness and preliminary actions such as fossil fuel divestment, the Global Risk Report stresses that there is much more work to be done to mitigate risks.
How companies and governments choose to respond over the next decade will be a focal point of many discussions to come.
The Sum of Its Parts: The Smartphone Multiplier Market
Every day, 3.3 billion people rely on their smartphones to stay connected. The products and services enabling this—the smartphone multiplier market—is now worth $459 billion.
The Sum of Its Parts: The Smartphone Multiplier Market
There’s a 60% chance you’re reading this article on a smartphone right now—a testament to how ubiquitous these devices have truly become in our lives.
We rely on smartphones every waking minute to stay connected. However, the various products and services—also known as the smartphone multiplier market—that allow us to use these devices in the first place can often be an afterthought.
Today’s chart uses data from Deloitte Insights to show just how sizable this ecosystem is becoming, and why it’s heating up as a battleground for big technology companies such as Apple, Alphabet, and Amazon.
The Smartphone Plateau
There are over 3.3 billion smartphone users in the world today.
The smartphone economy—estimated to pull in $944 billion in total revenue in 2020—is so massive that it rivals the GDP of countries like Indonesia and the Netherlands.
At the moment, the smartphones themselves contribute over half the market value. Despite the continued hype surrounding the release of new models, global unit shipments of smartphone devices appears to have reached a saturation point:
There are two theories as to why shipments are leveling off. First, product innovation is more iterative today than in the past, which means there are fewer groundbreaking features to entice consumers into purchasing new devices. A second factor is that people are simply holding onto their devices for longer than in the past.
As device sales plateau, tech giants are diversifying efforts to find new ways to lure customers back in—and another related market is growing more lucrative as a result.
What is a “Smartphone Multiplier”?
When people think of the smartphone market, hardware likely springs to mind first, but an equally important part of the equation is the plethora of apps, services, accessories, and complementary devices that help us connect with the digital world.
The ecosystem of these products and services are known as smartphone multipliers. According to Deloitte, this ecosystem will drive $459 billion of revenues in 2020, an impressive 15% increase from the prior year.
The market can be broken down into three main categories:
|Category||Market Value (2020e)||Sub-categories|
(68% of total)
|$176B: Mobile ads
(24% of total)
$9B: Smart speakers
(8% of total)
Largely driven by mobile advertising and app sales, content is by far the largest subcategory, accounting for 68% of revenues:
- Mobile advertising surpassed TV as the largest advertising channel in 2019, partially thanks to the relentless growth of online video and social media, making ads virtually unavoidable on a smartphone.
- Gaming apps are benefiting from the immense processing power of today’s smartphones—and will bring in over two-thirds of total app revenue in 2020. Apple’s app store brought in approximately $1.8 billion in sales between Christmas Eve and New Year’s Day alone.
If you’ve ever owned a pair of headphones or a powerbank, it’s easy to understand why accessories are the third-largest subcategory in the smartphone multiplier market. With more people ditching the cable for wireless headphones, this subcategory is also set to grow even more.
The Next $1T Economy?
In the U.S., 73% of adults go online several times a day or almost constantly, which makes it clear that they aren’t going to give up their smartphones anytime soon.
As a result, smartphone multipliers will continue to evolve and flourish, presenting a unique opportunity for investors and businesses.
Altogether, it’s expected that the smartphone multiplier market will grow between 5 and 10% annually through 2023, likely propelling the entire smartphone economy past the $1 trillion benchmark in the coming years.
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