E-sports, also known as competitive gaming, has largely been overlooked by investors who don’t take the industry seriously. But that’s starting to change, as investors learn that e-sports is not a niche market, but rather an untapped gold mine.
That’s why venture capitalists are taking a special interest in Taunt—a Seattle-based startup that allows e-sports fans to compete against one another while they view live-streamed footage of professional gaming competitions.
“Fans want something that’s built specifically for the games they love,” said Ben Gilbert, CEO of Taunt. “The large amount of data and machine learning we’re using under the hood allows us to create this of e-sports-specific real-time experience.”
Indeed, there’s evidence to support Gilbert’s claim that fans are seeking this type of service. This past August, the International Dota 2 Championship, which was hosted in Seattle’s Key Arena, was completely sold out.
What’s more is that the latest research shows that the professional gaming market is steadily growing each year. According to Newzoo’s 2017 Global E-sports Market Report, competitive gaming revenues are projected to reach $696 million by the end of this year and swell to $1.5 billion by 2020.
This past September, the Foundry Group (in partnership with Microsoft co-founder Paul Allen’s Vulcan Capital and other angel investors) led a $1.7 million investment into Taunt. It’s yet another sign there is money to be had in the e-sports market.
But Justin Dellario, head of E-sports Programs at Twitch, still thinks there are improvements to be made before the industry can turn major profits.
“Regulation and organization at all levels will help take e-sports from more than just an exciting prospect, to an identifiable opportunity with a clear return on investment,” Dellario told Sports Illustrated. “It is at that point that we will begin to see investments turn from millions into billions.”