Denver, CO


/ Cambridge, MA



Konvoy Ventures is a thesis driven venture capital firm focused on the video gaming industry. We invest in infrastructure technology, tools, and platforms.

The State of Gaming

Gaming market update, plummeting Overwatch viewership

The State of Gaming

Against a challenging macro backdrop, video gaming is one of the few industries that is thriving. This industry has also helped billions of people stay more socially connected in the midst of a socially distant world. Here is a deck we put together highlighting recent trends across gaming during this global health crisis.

In 1995, about 100 million played video games. Fast forward to 2020, and over 2.5 billion people play games. The average age of a gamer is now 36 years old, 45% are women, and over 500 million of them watch esports (the professional scene of gaming).

In recent months, gaming has accelerated due to many people spending more time at home. Hours watched on Twitch (a streaming platform for gaming content) is up 77% from 1 billion hours in January to 1.7 billion hours in April. The number of average concurrent viewers on Twitch is up from 1.35 million to 2.4 million over that same period. On mobile, global game downloads jumped 39% from January to February with 1.1 billion more downloads over that same period. In the first quarter of 2020, mobile playtime is up 62% with in-app purchases up 30%.

Verizon is also seeing an uptick in traffic. Their CEO said in a recent interview that, “Video game usage during peak hours has gone up 75% since the quarantine first went into effect last week,” (March 17th).  Also, in the absence of sports entertainment, viewership of competitive eNASCAR took center stage on the FOX Sports network. On March 31st, the eNASCAR iRacing Pro Invitational Series race drew 1.3M viewers on FS1, making it the highest-rated esports TV program to date.

Recently, there are 3 common topics of conversation that we hear amidst this flurry of activity.

1) “Gaming is having its moment” – the recent surge in video gaming is quite substantial, yet video gaming has been growing at over 9% CAGR for the past 12 years since the last recession. This 9% growth is twice the growth rate of other entertainment sectors like gambling, film, or music. The video game industry may be a beneficiary amidst this challenging economic landscape, yet this is not “gaming’s moment”. It has been accelerating for decades.

2) “Will the new gamers stick around?” – no, not all of the new entrants to the gaming ecosystem will stick around. In the United States, video game sales in March were up 35% year-over-year, as many people chose to go out and buy gaming systems, accessories, and software. Of the hundreds of millions of new gamers, we would expect less than 50% to “stick around”. This will take multiple quarters of data before we can assess it, but a significant amount of churn should be expected.

3) “Can video gaming grow amidst a recession?” – yes, the modern age of video gaming (post 1995) is now going through its 3rd recession. In the last two recessions, the video game industry did not decline but actually grew substantially in both revenue and the number of consumers. Given the early indicators we are seeing in this recession, we fully expect video gaming to thrive throughout this next economic downturn.    

Additionally, we believe one of the most important shifts occurring right now is in the fading stigma around video gaming. In this midst of this global health crisis, the activity of playing video games is becoming even more socially acceptable than it was 12 months ago. This social acceptance translates into more thriving gaming communities, creative entrepreneurship, and investable companies.

Video gaming is a key tenant of the future of digital entertainment. It is not only a fantastic place to invest and build, but it has also helped billions of people stay more socially connected in a socially distant world.

We are thrilled to have a firm that plays one small part in that narrative.

Overwatch Viewership is Plummeting

The Overwatch League continues to flounder as viewership has decreased 64% since its inaugural season in 2018. The league that at one point was commanding anywhere between $30M and $60M to own a franchise spot is looking like it could be near the end. The issue here is two-fold: 1) Activision charged far too much for these franchise spots and 2) teams actually paid them.

The prize money isn’t enough, as only the top team will get a large portion of the $3.5M seasonal prize pool. Also, the sponsorship dollars and media rights are directly correlated to the viewership statistics and those are clearly not going in the right direction. The next thing we could begin to see for the OWL is teams dropping out due to the amount of operational capital needed to sustain a team.

The end of the OWL seems inevitable as we are already seeing OWL athletes retiring to move to Riot’s new esport, VALORANT. Jay “Sinatraa” Won, the most recent OWL MVP, announced on April 29th that he would be leaving to pursue opportunities in VALORANT. On top of that, Cory Nigra also announced that he would be retiring from OWL to pursue VALORANT.

The OWL is simultaneously losing viewership and it’s elite professional athletes. I expect the OWL to be discontinued within the next 12-24 months.