They develop physical coordination and stamina. Gaining new skills increases self-confidence. Winning and losing can help them learn to deal with both success and disappointment. They can make friends with those who share similar interests.
Team sports teach teamwork, while individual sports develop self-reliance.
Parents have a number of reasons for involving their children in sports, but children play sports to have fun. As parents, we can do a number of things to keep the competition enjoyable for our children. Take the focus off of winning. During games, we can notice skill development. Sometimes the children care less than we do whether their team wins.