Outside of the industry, many use “gaming” and “esports” interchangeably in conversations. This common mistake is understandable, given that both involve the act of playing video games.  However, they are truly different from each other. 

For starters, the gaming industry generated over $150 billion in revenue last year, as compared to the esports industry that just broke $1 billion in 2020. Not only is there a stark difference in monetary value of the industries, but there are also nuances that separate these similar methods of play.

What is gaming?

Gaming is the all-encompassing term used to describe the action of playing video games in any format and on any console. Whether the purpose for playing is for fun, practice, or friendly competition, anyone who picks up a controller or a mouse and keyboard to log into their digital universe is gaming

What are esports?

The esports industry is an extension of the gaming world where players are competing on a more serious level to win prizes and tournaments. Esports players are investing a lot more time in practicing and honing their skills in their games with high stakes like tournament winnings on the line.

What’s the difference?

This is where it can get a bit confusing. Two people can be playing the same video game, like League of Legends, at the same time. However, let’s say in this example that one of the players is participating in a tournament, and the other is playing casually with a group of online friends. The first player in this scenario is playing “esports,” while the second player is simply “gaming.”

Those who are playing competitive esports are still considered to be “gaming,” because they are participating in the act of playing a video game. However, it’s important to note that the opposite is untrue. Those who are gaming are not necessarily participating in esports. 

One way to understand this better is to compare gaming and esports to traditional sports. Gaming is equivalent to gathering a group of friends to play a pick up game of basketball for fun, whereas esports is equivalent to participating in a basketball league with stakes and structure. 

The nuances of these two industries, while somewhat confusing, are important to understand, particularly when it comes to investing. It is also helpful to know the difference when it comes to understanding the wants and needs of the gaming community at large. What works for a group of esports players may not work for a group of casual gamers, and vice versa.