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.
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.
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.
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.
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.