ESports -Pitch Deck

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ESports Insights - Industry Perspective

The eSports market is growing rapidly between 26.7% to 32% annually from $409.1 million in 2019 and will grow to $691.1 million in 2022 in North America. League of Legends is the most popular game by registered players and Youtube is considered to be the most popular site for eSports content.

The eSports Market

The eSports market is one of the fastest growing markets in the world. It opens itself to talented players and brands willing to promote these players. It is quite an exciting market, as the market offers new branding opportunities and engaging content for people (spectators and players alike) all over the world. Additionally, the eSports market is highly accessible, and this is the primary growth driver of the market.

The increasing popularity of video games also drives the market, and because of this popularity, the awareness of eSports also increasing. Media rights have the highest CAGR in terms of revenue in this market because media rights pay the most substantial sums of money to win the exclusive rights to broadcast live streams of eSport events. Moreover, the monetization of rights by various network partners and distributors are also driving revenue growth in the market.

eSports Revenue

A report from 2016 reported the eSports market having a revenue of $492.7 million. This is expected to grow by 32% annually, eventually reaching a staggering $1.48 billion in annual revenue by 2020 (1). In 2019, Esports revenue worldwide generated $456.7 million in sponsorships, $251.3 million in media rights, $189.2 million in advertising, $103.7 million in merchandise and tickets, and $95.2 million in game publisher fees. It was predicted that in 2019 eSports revenue worldwide would reach $1.1 billion with an annual growth of 26.7%, and indicated statistics had shown precisely that.
Moreover, the main drivers of eSports revenue in America in the year 2016, came from sponsorships ($71.5 million), advertising ($36.3 million), publisher fees ($33.6million), media rights ($18.1 million), and merchandise ($17.1 million). North America is considered to be the largest eSports market in 2019, sporting revenues of $409.1 million, which is predicted to reach $691.1 million in 2020. Sponsorships are expected to be the primary revenue driver in 2019 with a predicted value of $196.2 million.

Audience Size

It is reported that in 2016 there were about 323 million viewers of eSports. The viewers of eSports composed of both eSports enthusiasts and occasional viewers. The number of viewers is expected to double by 2020. Additionally, during the same year, it was reported that 17% of US gamers watched eSports regularly.

Furthermore, the global eSports scene had a total audience size of 335 million viewers in 2017 (192 million occasional viewers and 143 million eSports enthusiasts), a 395 million audience size in 2018 (222 million occasional and 173 million eSports enthusiasts), and a 454 million total audience size in 2019 (253 million occasional and 201 million eSports enthusiasts). North America represented over 12% of eSports enthusiasts in 2019. Additionally, It is predicted that the global eSports scene will have a total audience size of 645 million in 2020 (347 million occasional and 297 million eSports enthusiasts). Moreover, in 2016, Youtube is considered to be the most popular source for eSports content while Twitch was considered to be the second most popular source for eSports content.

Popular Games

When it comes to popular games in eSports, League of Legends is considered to be the most popular and has the most significant number of registered players. In August 2017, a report showed the number of players breakdown by game with League of Legends having the highest player count with 100 million, Call of Duty taking second place with 28.1 million, and Hearthstone with 23.9 million. DOTA 2 is still in the list of popular games in eSports with 12.6 million players, and World of Tanks with 12.3 million players. Additionally, in 2015, 36 million viewers watched the League of Legends World Championships online. This helped increase eSports viewers by 33% from the previous year. MOBA (Multiplayer Online Battle Arena) is considered to be the most popular eSports genre on Twitch in 2015 and represents about 58%of time spent watched by viewers on Twitch.

Market Leaders

One of the market leaders is DOTA 2 who had the highest prize pool in 2018. When it comes to player count, League of Legends leads the way with the highest player count worldwide in 2017. While in 2015, Call of Duty is considered to be the second most popular eSports game in the US.

When it comes to player earnings, Saahil Aurora or “UniVeRsE” is considered to be one of the highest earning American professional gamer. In 2012, he played on a team known as Evil Geniuses in the game DOTA 2 and in 2013 he played on team Dignitas representing the team in DOTA 2’s The International 3 (this is the world championship scene for DOTA 2). Another high earning eSports player is Peter Dager, who earned $2.62 million in 2016. For women eSports player, Sasha Hostyn, also known as “Scarlett” earned an overall profit of $171,000.

The major industry players in the market include Activision, Blizzard, Nintendo Co. Ltd., Electronic Arts Inc., Disney Interactive Studios, Inc., Valve Corporation, Rovio Entertainment Corporation, and Tencent Holdings Limited.
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ESports Insights - Participant Perspective

Some of the insights gained on the esports industry from a participation point-of-view revolved around the increase in esports gaming interest and involvement. As an example, the National Association of Collegiate Esports' (NACE) membership has grown from just six university members to 104 in just a span of two years due to the increase in gamers' participation. More than 475 colleges have offered club esports programs to increase students' participation. Around 50 US colleges offer esports scholarships to increase their varsity players. The varsity esports program of Canton State University of New York (SUNY Canton) onboarded an additional 40 students after implementing several esports initiatives. The growth of the esports industry can also be attributed to the increase in the availability of streaming services such as Twitch, a platform that has streamed more than 241 billion minutes of esports contents to its 10 million daily active visitors.

ESports Insights — Participant Perspective

The following are the details of the insights gathered on the esports industry from a participation perspective:
Ashland University in Ohio offers esports scholarships worth $4,000 and is one of the increasing number of educational institutions that is adopting this type of game into their varsity programs. These institutions have also become members of the National Association of Collegiate Esports (NACE). NACE's membership has grown from just six university members to 104 in just a span of two years, representing around 1,500 esports gamers. These universities have been luring in huge numbers of esports students and viewers. As an example, 500 potential students have signified their intent to enroll in Ashland after Good Morning America featured the school's esports program.
Outside of NACE, more than 475 colleges also offer club esports programs which became stepping stones for an increasing number of varsity groups. Around 50 colleges also offer esports scholarships to attract more esports athletes.
Meanwhile, others continue to build more esports facilities to attract more gamers. The University of Akron has recently inaugurated its 5,200-square-foot esports gaming center, the largest in the world. In the case of Ohio State University, the school has deployed several esport programs that has gaming, degrees, research, and other aspects.
The Canton State University of New York (SUNY Canton) is also involved in varsity esports as one of the avenues to connect more with their online students. The online students represent around one quarter of its total student population. SUNY also got an additional 40 interested students after announcing their esports programs.
In the case of Southwest Baptist School, its students helped organized a six-hour esports event that became featured in the Twitch streaming platform. The live event was able to garner a record 70,000 views for this scale.
The University League of Legends (LoL) Esports College Championship in 2017 saw eight competing teams. This was twice the number of all the teams that competed during the first three years since this contest started. This was seen as an indication of the increasing popularity of both collegiate and professional esports gaming.
In other esports games, Blizzard Entertainment, the creator of "Heroes of the Storm, Overwatch and Hearthstone," has collaborated with the Tespa organization to launch massive contests for those games. Tespa began as an esports association at the University of Texas. Since then, the group has grown in size and already has 220 chapters.
The increasing popularity of collegiate esports is also propelled by the support of the universities involved. These institutions have been promoting esports teams via their official communication mediums.
Technological advances have propelled the esports popularity. Currently, there are around 4,000 esports gaming events annually for the key game titles. The technical skills of the gamers have also improved as a result of regular game involvement, being spectators in several esports events, and being active gaming community members. These factors have also resulted to a massive community involvement and growth in the esports gaming industry.
The rise of online streaming services has also driven the popularity of esports gaming. Twitch, an online streaming service, regularly streams well-known esports contests. In July 2017, the platform has streamed more than 241 billion minutes of esports contents to its 10 million daily active visitors and more than 100 million unique monthly viewers.
Furthermore, the increasing proliferation of gaming platforms and devices has also contributed to the growth of the industry. Based on Business Insider report, Sony was able to sell more than 60 million PS4 consoles, while Microsoft's Xbox One consoles have around 26 million units sold.

From Part 01
  • "The eSports market is experiencing a rapid growth, despite being in its formative stage. In 2016, worldwide revenues generated in the eSports market amounted to 492.7 million U.S. dollars. By 2020, the market is expected to generate over 1.48 billion U.S. dollars in revenues, which indicates a compound annual growth rate of 32 percent."
  • "In 2016, the number of eSports enthusiasts and occasional viewers totaled 323 million. The number of viewers who regularly follow the industry and tune in to watch international competitions is projected to nearly double by 2020. "
  • "In terms of title popularity, the League of Legends takes the lead, especially when looking at the number of registered players. As of mid-2015, the game had a player base of 67 million. That same year, 36 million individuals streamed the League of Legends World Championships online, which represented a 33% increase from 2014. "
  • ""According to the source, 74 percent of respondents had watched eSports via YouTube, while 34 percent used Twitch for that purpose." "