Who wins when it’s horses vs video games?

[Today’s Exponential Investor comes from Revolutionary Tech Investor editor Sam Volkering. It’s taken from an update Sam wrote for his subscribers back in November. But I think you need to hear about the extraordinary new industry which may well be popping up in your living room this Christmas…]

Back home in my native Australia, November signifies the culmination of one of the biggest sporting events in the country… arguably the world.

It’s the Australian Spring Racing Carnival. Technically it kicks off in October, but stretches across a number of horse races called the Caulfield Cup, Cox Plate, Victoria Derby, VRC Oaks, The Everest and the granddaddy of them all, the Melbourne Cup.

If you’re into your horse racing and you haven’t heard of these, or at the very least The Everest and the Melbourne Cup, then you’re not as into your horse racing as you might think. The Melbourne Cup however is historically the most famous in the country, and one of the great global races.

In fact, it’s so significant that in Victoria, where the race is run, it’s a public holiday on “Cup Day”.

The first Melbourne Cup was run 158 years ago. Yep that’s right, it really was a British-inspired event to begin with back in 1861, where the grand prize for winning was around £710 cash. In the race that was completed last week the prize for first place was AU$4.4 million (£2.34 million).

That kind of booty is enough to bring in what they call “foreign raiders” from England, Japan, the US, Ireland and Dubai, all for a shot at glory. For the winners it’ll be a day to remember. For the losers… well, they’ll have to wait 12 months for their next shot. Or move on to the next huge racing meet.

However, for all the history, for all the glory, times might be changing for not just the Australian Spring Racing Carnival but horse racing all over the world.

This year’s Carnival has been tainted somewhat. There has been immense controversy over the welfare of horses past and present. Sketchy training techniques and the welfare of horses after their racing careers has once again reared its ugly head.

There were protests, demonstrations and an increasing groundswell to outlaw the sport altogether.

It had an effect on turnout to the events. For example, in years gone by I attended Melbourne Cup day’s at Flemington Racecourse with around 100,000 other punters. This year just over 81,000 showed up on the day. It’s now the fourth consecutive year of decline. Not to mention, the lowest overall audience in 26 years.

The number of TV viewers is also in steady decline. Bear in mind this is broadcast on a free TV network and is known as “the race that stops a nation”. Yet coverage saw around 1.44 million tune in, down from 1.89 million the previous year.

Perhaps though, this is just a sign of the times. Another indicator of the shift in what people want from sporting entertainment. Why subject horses to the kinds of stresses and strains of thoroughbred racing when you can get your racing kick in other ways?

Now I’m not here to preach for horse racing one way or another. I quite enjoy it to be fair. The point is that times and tastes and opinions change. And soon enough a whole new generation of sports and entertainment fans are going to be the ones who decide what the future of sports like horse racing looks like, not you and not me.

The rise of the millennial consumer is happening fast. That brings with it the desire for other non-traditional kinds of sports and entertainment. Racing isn’t what it used to be, and new competition is coming.

And in a big way that is happening through esports – or competitive video games – which is already here and it’s growing fast. In stark contrast to the Melbourne Cup, people are flocking in droves to watch it.

The Sunday before the Melbourne Cup, we saw the latest glimpse of the pull that esports now has. At its peak, 3.98 million people tuned in to watch the semifinal of the League of Legends World Championship (LoL World Cup). A competition between two teams of five players vying to best the other.

Compare that to a 158-year-old horse race that pays £2.34 million to the winner, and you get a glimpse of how things can change so quickly.

The fact that almost 4 million people watched the LoL World Cup is astonishing. That number easily smashing the old record for total viewership of any esport event.

Prior to this colossal semifinal, the previous esports audience record was 2.3 million. A milestone itself that was only achieved in July this year.

That’s how fast this industry is growing!

Plus, none of this data includes China. While it is one of, if not the biggest esports market in the world, its data just isn’t reliable. All the circumstantial evidence suggests it’s gigantic, though.

Because of that, each and every year new records and achievements are broken. Viewership, prize pools, sponsorships – every aspect of esports is getting bigger and bigger. Where people are drawn to, so too is advertising, marketing and economic spending to target those people.

All of this has culminated into a booming market. Which is why, by the end of the year, revenue in esports will exceed US$1 billion for the first time ever.

You don’t have to “get it” or like it, but you can’t ignore it.

Esports is an entertainment revolution – and a lucrative one at that.

The challenge though, is figuring out how to tap into this opportunity. A feat that has proved easy for some and elusive for others.

Until next time,

Sam Volkering
Editor, Southbank Investment Research

PS All this fun and games will require some rather excellent tech infrastructure to be rolled out globally. If you’re interested in profiting from that rollout, click here.

Category: Crowdfunding

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