OVERVIEW

• Brand interest in eSports is set to reach new levels of excitement in 2018. High profile brands such as Mercedes-Benz, Gillette, Red Bull, HP, and Intel have all carved out sponsorship and partnership deals that are helping their brands reach the highly engaged and largely millennial eSports fanbase.
• Global revenues were estimated to be $905.6 million in 2018, up by 38.2% from 2017, according to Newzoo. By 2021, global eSports revenues are predicted to rocket to $1.65 billion, $1.4billion of which will come directly from brand investment.
•  League of Legends is the game most closely associated with Gillette, which first started working with eSports company and tournament organizer the ESL on its sponsorship of the Intel Extreme Masters (IEM) tournament in February 2017.
• The shaving brand chose League of Legends due to its popularity as one of the longest running eSports and ability to reach young male audience.
• One of the main reasons why there has been growth in eSports viewership is because more people are learning about it.
• In 2017, the total prize money for 4166 tournaments was more than $1.1 billion. The mean tournament prize pool was around $27,500.
• With 17,921 active players at these tournaments, it meant that the mean earnings for each player were $6,407.98.
• Kuro Takhasomi aka "Kuroky" of Team Liquid (Dota2) have the highest overall earnings in eSports with $4,235,456.55 total earnings.
• Gamers and fans use smartphones the most for watching eSports games.
•  YouTube is going to be the exclusive broadcast stream for ESL’s online Counter-Strike league. This decision apparently comes from a partnership formed between YouTube Gaming and WESA, the ESL-backed advocacy group.

GROWTH

• Since 2016, the global eSports enthusiast viewership has grown from 121 million to 165 million in 2018 which is expected to reach 250 million in 2021.
• In addition, from 2016 to 2018, occasional viewership grew from 160 million to 215 million which is estimated to reach 307 million in 2021.
• eSports awareness has also grown over the years from roughly 800,000 people who had heard about it in 2015 to 1.43 billion in 2018. In 2019, it is predicted to reach 1.57 billion people.
•  Twitch and YouTube have led the platforms offering live eSports coverage with 1.13 million active streamers all together.
• Starting in 2013, people watched about 2.4 billion hours of eSports globally. This has increased to roughly 6.6 billion hours in 2018.
• eSports revenue continues to grow as well. In fact, in 2016, the total eSports revenue was only $493 million, while 2018 saw the eSports industry make a total of $906 million.
•  80% of eSports gamers & fans believe the eSports industry will grow in terms of gaming content & viewers. However, 2 out of 5 do not yet recognize eSports as real sports and eSports players as legitimate athletes.

OTHER DATA/STATISTICS

• The top tier of eSports, League of Legends, is the world’s most watched eSport. According to Newzoo, League of Legends was watched 274.7 million hours in 2017, followed by Counter Strike (232.9 million hours), Dota 2 (217.9 million hours), Hearthstone (76.9 million hours), and Overwatch (25.2 million hours).
• Fans of LoL, Counter Strike, Call of Duty, and Minecraft was watched 4 to 6 hours a month.
•  Counter Strike is the most engaging (5.4 hours/month) but League of Legends is the best monetizing ($7.53 spent per hour of play).

PURCHASES/SPENDING

• Gamers and fans spend an average of $31 per month on eSports gaming subscriptions, items, and content.
• When buying gaming merchandise, more gamers/fans with HHI < $49K prefer paying via Debit & Prepaid Cards, 3 out of 4 gamers with HHI > $100K prefer paying via Credit Cards.
• eSports had over $492 million in revenue in 2016. 9% came from merchandise and tickets that came in around $64 million.
• In 2017, eSports enthusiasts in North America spend almost twice as much as other regions with an average of $10.36 each in revenue.
• eSports enthusiasts spend the most money with an average of $3.64 per watcher and expected to increase to $5.20 by 2020.
• The gaming peripheral market is booming with an estimated $2.7 billion dollars in global sales in 2017.
• eSports enthusiasts are generally very loyal to the brands they own. The average brand loyalty across the 24 brands studied was at 85%, meaning that consumers answered yes when asked “Would you buy from this brand again?" Brand loyalty among SteelSeries users is the highest at 92%.
• eSports enthusiasts are driven by quality and choose the best (reviewed) peripheral in their budget range. This is also reflected in the purchase drivers with 62% of core PC gamers indicating that reviews, whether online consumer reviews, online professional reviews, or reviews in magazines, are important in the purchase decision.
• When asked about their drivers for buying gaming peripherals, 31% and 27% of core PC gamers consider good reviews by consumers on a website and a product being on sale as main drivers, respectively. This is compared to 24% who consider “made by favorite brand” as a main motivator.

ESL ONE

• ESL is the world's largest esports company, leading the entertainment industry with online and onsite competitions across popular games. Filling large arenas and reaching over 60% of the global audience of 165 million.
• ESL evolves the eSports ecosystem around games, platforms, and events, creating immersive experiences for gamers and enthusiasts, and generating huge opportunities for publishers, partners and sponsors.
• They operate high profile, branded international and national leagues and tournaments such as the Intel® Extreme Masters, ESL One, ESL Pro Series, StarCraft® II World Championship Series, as well as grassroots amateur cups, leagues and matchmaking systems.
• Some of the business partners of ESL and Turtle Entertainment are global corporations and brands such as Intel, Mercedes, Red Bull, Paysafe, DHL, Dell, Logitech, McDonald's, MSI, Vodafone, ASUS, Blizzard Entertainment, Wargaming and many others.
• They have 270,000+ event visitors in 2017.
• ESL ONE have 205 million unique viewers in 2017.
• Their live video views in 2018 is almost 1 billion.

PUBG

• For the last 30 days, The average players in Playerunkown's Battleground (PUBG) is 358,446.4.
• PUBG was the first game on Steam to exceed 1 million concurrent players for an entire calendar year.
• There are 4.7 million copies of PUBG in PC and Console in 2019.
• The revenue of PUBG in 2018 is $920 million with $311 million in profit. The PUBG profit for console is $58 million and the profit from PUBG mobile is $65 million.
• There's 19% increase in PUBG earnings from 2017-2018.
• The total PUBG mobile players spent $320 million.
• The estimated amount PUBG earns daily from player spending is $689,000 per day.

AGE

• The Global Web Index report estimates that 38% of esports audience is between 16-24 and 35% between 25-34.
• New Zoo estimates that 79% of the esports audience is under the age of 35.
• According to Goldman Sachs, esport audience comprises millennials and Gen Zers.

GENDER

• Interpret estimates that 30.4% of the esports audience is female.
• According to the Global Web Index report, 71% of esports audience is male and 29% female.

INCOME

• According to the Global Web Index report, the esports audience is likely to be affluent.
• New Zoo found that the esports audience is likely to have a high income and tends to spend a lot on game-related products and digital media.
• According to Mindshare, 43% of esports enthusiasts in North America have household incomes of $75,000 or more.
• The esports enthusiast in America and Western Europe is more likely to have a full-time job (71%) versus the average gamer (50%).

EDUCATION

• In Asia, Europe, and America, a higher education translates to higher incomes. In Europe, those with a bachelor's degree earn 50% more than those without one.
• As esports fans and viewers are more likely to be high earners, they are, therefore, also likely to have a bachelor's degree or higher.

MARITAL STATUS

• According to New Zoo, eSports enthusiasts (52%) in North America and Western Europe are more likely to be married than the average gamer (39%).
•  Fifty-eight percent of esports fans 25 years and older in North America have children.
• One in three esports users in China is married.

LOCATION

• The esports audience is likely to be living in urban and suburban areas.

RESEARCH STRATEGY

CHANGING LANDSCAPES — ESPORTS

• ESports companies (e.g., Blizzard) and leagues (e.g., Overwatch League and Call of Duty World League) are at the forefront of the push to establish physical arenas. If teams can play in home cities (like traditional sporting events), then eSports organizations will have access to some of the same revenue streams as traditional sports (e.g., ticket sales).
• The economic intentions of eSports to mimic those of traditional sports are quite visible. One notable instance of this is the championship prizes offered at eSporting events. The 2018 DOTA 2 event had a prize pool of $25 million, which is higher than that of the Daytona 500, the Masters, or the Tour de France.
• Additionally, there are now 50 universities in the US that are offering substantial scholarships to eSport student-athletes. In 2017, eSports scholarships amounted to a total of $9 million; in 2018, that figure increased to almost $15 million.

CHANGING MEDIA IN THE ESPORTS LANDSCAPE

• The eSports media landscape is changing quickly, though streaming remains the primary method of consuming esports content. Which is unlike traditional sports that are viewed primarily via cable and satellite television networks. However, there is a difference in the measurement of viewer numbers between eSports and traditional sports.
• Compared to traditional sports, the eSport viewer counts were relatively high in 2018. The FIFA World Cup had 3.5 billion viewers and Super Bowl LIII 98.2 million. However, the DOTA 2 International had 14.96 million viewers and League of Legends of Worlds 205 million.
• Newzoo predicts that the annual eSport viewer growth rate will be approximately 14% in the coming years. Newzoo also predicts that the number of casual viewers will grow to 307 million in 2021, with 250 million eSports enthusiasts raising the total audience to 557 million.
• According to a Streamlabs analysis, Twitch and YouTube are the lead platforms for live, eSports coverage. Combined, both platforms have 1.13 million active streamers.
• In 2018, Activision-Blizzard and Riot Games began using their media rights to expand their viewer numbers into traditional TV.

THE CHANGING EXPERIENTIAL LANDSCAPE IN ESPORTS

• New technologies like Virtual Reality (VR) are transforming the experiential landscape of eSports. According to VR Scout, the use of VR in eSports is becoming a trend, especially for location-based entertainment.
• The use of VR in eSports could help further new ideas from some companies looking to establish “real” eSports tournaments where viewers in stadiums have their physical presence enhanced through immersion in the digital environment.
• The first Omniverse (which uses the Omni VR treadmill) global competition was on January 2019. The competition featured two-player teams battling for the highest score in the VR first-person shooter Omni Arena.

THE CHANGING PRODUCT LANDSCAPE IN ESPORTS

• The main eSports companies, leagues, and brands (e.g., Riot Games, League of Legends, Activision-Blizzard and Overwatch League) originally sold their franchises at $10 to $20 million. But with the increasing popularity of eSports, those franchises are now worth $60 and $80 million. (Source 3)
• According to Newzoo, eSports revenues grew 38% ($906 million) in 2018 and are expected to reach $1.65 billion by 2021. Most of this growth will occur in North America (38%) and China (18%). (Source 3)
• Media rights are becoming one of the biggest revenue streams, projected to be worth over $320 million by 2021 (which would make media rights the second-largest source of eSports revenue behind sponsorships). In July 2018 , Activision-Blizzard signed with Disney to broadcast the Overwatch League on the latter's traditional television network.
• ESports players are becoming a valuable product. Players can sell their image to large streaming platforms like YouTube and Twitch, and their fans subscribe to these streaming platforms (for $4.99 to $24.99 per month). These fans buy tickets and merchandise as well as donate money to players.

RESEARCH STRATEGY