Ukraine recognized esports as an official sport. How will this affect the financial services industry?
Every year, I point out that the video game industry isn’t, pardon the pun, some funny games. This is a fast-moving branch of the digital economy that generates big money. Newzoo predicts that by 2020 the global esports market will generate revenues of $1,059 bln, having regard to the Covid-19 events — canceled and rescheduled events. Esports teams began to appear in Ukraine long ago, and since the end of 2000s they have been participating in international tournaments, winning prizes. I won’t retell the success story of Ukrainians from Natus Vincere, but international esports success isn’t something new for Ukraine for a long time.
However, that industry is very popular with both its representatives and people of completely different professions, of different ages and sex. Esports is recognized in many countries around the world — South Korea, Denmark, Sweden, Germany, USA etc. — and is the part of their economies. The recognition of esports as an official sport in Ukraine is a significant step towards development, modernization and capacity building.
Esports as an official sport in Ukraine will affect many spheres — tourism, telecom, education, and, of course, the financial services sector. Recognition as a real sport is a welcome step that will bring about positive changes. Ukraine will attract closer attention of global industry representatives such as Blizzard, Epic Games, Valve. We have been communicating with many of them for many years — and this news greatly improved this communication. Today there are more than 15 million gamers in Ukraine. Someone perceives games as a hobby, sport, favorite pastime, while others as a work. The new definition of esports will bring about completely different opportunities and meaning to the Ukrainian gamers audience.
Esports can (and should) become a part of the Ukrainian economy. The talented players and the established culture of the sphere attract investors and world’s leading brands. The large tournaments, with the participation of esports teams, attract a numerous audience. The pandemic will end sooner or later, and the described fans — potential tourists will help revive hotel business, support the restaurant business, etc.
What will be the impact on the financial services industry?
We have been working with gaming services in terms of transactions since 2010 and we analyze and monitor the work of the sphere at the international scale from year to year. We admit the constant growth of the audience and the average purchase amount for services in Ukraine. Currently the average annual purchase amount in the PC and console segments accounts for approximately $200. Ukrainian gamers are most often interested in free-to-play projects with a strong esports component: Dota 2, CS: GO, PUBG, League of Legends. They pay not for the game itself, but for the things and opportunities in it — i.e. for gaming experience in a large community.
The sport status will further expand the audience of online games, which means the expansion of the audience of players who pay. Banks and non-bank financial institutions will respond — with service improvement, new conditions, card or credit products — in short, everything that will help increase the average purchase amount for the digital goods. It will also increase due to the games purchases, but a much more significant volume of transactions will still be associated with the in-game payments (“donations”) described above. There will be nothing fundamentally new, but this segment in Ukraine is growing and will continue to grow in volumes.
Any new realm of the economy always opens up new opportunities for the transactional business. In the case of esports, this accelerates the digitalization process of the Ukrainian economy and formalizes financial processes that may have existed before. Although the getting of the necessary stamp in the eyes of the state may be perceived as one of the main achievements. The gaming industry and esports can no longer be treated with indulgence. Such seriousness means great responsibility. However we and all involved are ready for such seriousness like no one else.