Tapping e-sports market to curb dollar outflows in gaming

KARACHI: There’s a craze among Pakistani youth for e-sports such as combat games, and establishing of e-sports franchises like Galaxy Racer would keep the dollars youngsters spend on e-sports within the country.

“You cannot take the screen (mobile, tablet or computer) from youngsters and they are already spending dollars on e-sports such as combat games,” said Special Technology Zones Association (STZA) Chairman Amer Ahmed Hashmi. “It is better to give them an option of competitive games.”

E-sports were just starting in Pakistan, with Galaxy Racer entering the country. This would not only cater the local demand of games but would also help establish an industry for game creators and gaming graphics, he added.

Galaxy Racer has received the licence and is expected to invest $2 million in the country with its operations to be conducted from STZ in Islamabad.

Pakistan has been facing a perennial problem of current account deficit – which means it spends more foreign exchange mostly by imports than it generates by exports. The current account deficit crossed $12 billion in the first eight months of financial year 2022.

STZA has just published its report – Facilitating The Next Big Opportunity: E-Sports. The report explores the potential of e-sports. E-sports industry is a segment of the enormous online gaming ecosystem.

The global online gaming ecosystem, which generated approximately $21.2 billion in revenues in 2020, includes distributors and retailers, streaming services, hardware developers, gaming arenas, e-sports, software developers, game publishers, and game developers.

The global gaming market was valued at $198.40 billion in 2021, and it is expected to reach a value of $339.95 billion by 2027. The report said that the global online gaming ecosystem has grown to become one of the most profitable industries on the planet.

While the terms online gaming and e-sports are often confused, they are not interchangeable. The former refers to the action of playing video games, while the latter is competitive or professional gaming (Visual Capitalist).

E-sports is a segment of the online gaming ecosystem, it is a critical and growing industry on its own that has the ability to influence the entire larger ecosystem. Statista, which is a German company specialising in market and consumer data, reported that the global e-sports revenues has surpassed $1.08 billion in 2021.

Statista also projects that by 2024 the industry will grow to $1.6 billion.

“The e-sports industry is ecosystem-driven since its key players not only include the gamers, but also content creators, influencers, sponsors, tournament organisers, publishers, content broadcasters and the audience,” the STZA report said.

The e-sports industry makes use of emerging technologies, including high-end GPUs and CPUs with liquid cooling systems, high-tech peripherals, data centres and rendering farms with cloud rendering, high speed internet for low latency access, gaming engines, sound engineering labs, motion capture studios, virtual productions studios, ARNR and 3D animation software, and gaming arenas.

Some of the top games include League of Legends, Call of Duty, Dota 2, Fortnite, FIFA 22, PUB G, and others. Most of these games are household names by now. The US government has even recognised full-time League of Legends players as professional athletes.

The bulk of the target audience for the e-sports industry are Generation Z and Millennials. An estimated 52 percent of Pakistan’s population is under the age of 25, making the country one of the biggest markets with Generation Z. Since most of the audience for e-sports tournaments is between the ages of 16 to 34, which is a demographic comfortable with integrating virtual and offline experiences.

“It makes the country an extremely high potential market when 64 percent of its population is under the age of 30. Moreover, with 188 million cellular subscribers and 107 million 3G/4G subscribers, the digital landscape of the country also seems promising to meet the demands of this highly-profitable and futuristic industry,” the report added.

Meanwhile, Amer Ahmed Hashmi said that there was demand for e-sports in the country, which was poised to increase in the future.

He added that to cater the demand, the government policy and incentives to work at the STZs would enable gaming graphic designers and creators to get duty free high-end computers. Right now those were very expensive and carried significant duties of 300 percent in some instances, which made them unreachable for such potential creators.

“It will enable the gaming industry in Pakistan, not just players but makers and creators of these e-sports, benefiting the country economically,” he added.