Esports to Grow 43% in 2016 to $463 Million Global Revenues; Will Reach $1.1 Billion by 2019
After a landmark year that saw 112 major eSports events in 2015 generating $20.6 million in ticket revenues, the global eSports market is expected to grow 43 percent from $325 million in 2015 to $463 million in 2016 according to the latest report by games market researcher Newzoo.
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In 2015, the eSports market grew by 67.4 percent with North America accounting for $121 million of the total revenue. By 2019, Newzoo projects that eSports are expected to grow to $1.1 billion.
The total prize money of all eSports events held in 2015 reach $61 million, up 70 percent from a year ago.
As a spectator sports industry, the eSports audience grew to 131 million Esports Enthusiasts (a growth of 27.7 percent) with another 125 million Occasional Viewers who tune in mainly for the big international events, according to the 80-page report.
Although the growth rate between 2015 and 2016 is slower (a 67.4 percent vs. 42.6 percent), the market size for eSports is getting bigger overall.
2015 saw the entry of many investors entering the industry and upping their involvement with eSports. An increasing amount of traditional media companies which include New York Times, ESPN and Turner Broadcasting Network saw the value of engaging audiences in the eSports sphere and formed their own eSports divisions.
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Locally, INQUIRER, Rappler and TV5 have also began their own initiatives in entering the new media space.
THAT’S A BIG PIE. The eSports pie continues to increase and mature. By 2019, market projections predict that the industry will grow to $1.1 billion in revenues (Photo by Newzoo).
North America to lead
According to the report, Newzoo predicts that North America will solidify its lead in terms of revenues with an anticipated $175 million generated through merchandise, event tickets, sponsorships, online advertising and media rights.
In a statement, Pieter van den Heuvel, eSports analyst for Newzoo said that: “A significant part of these revenues flows back to the game publisher, but across all publishers, more money is invested into the esports economy than is directly recouped by their esports activities.”
He added, “China and Korea together will represent 23 percent of global esports revenues, totaling $106 million in 2016. Audience-wise, the situation is different, with Asia contributing 44 percent of global esports enthusiasts. Growth in this region is, for a large part, fuelled by an explosive uptake in Southeast Asia.”
Of particular note is gaming publisher and corporate giant Activision Blizzard who, in the fourth quarter of 2015, bought out North American eSports organization Major League Gaming. It is expected that Activision Blizzard will focus their attention into creating a more robust eSports broadcasting and tournament environment for their own gaming titles.
Last October, Activision Blizzard brought on former ESPN CEO Mike Sepso to lead the Activision Blizzard Studio — a media outfit dedicated to broadcasting tournaments for Blizzard games.
A GROWING POPULATION. eSports audiences continue to grow year on year. eSports audiences are particularly attractive to outside investors as the typical enthusiast is reasonably wealthy (Photo by Newzoo).
In a statement, Peter Warman, CEO at Newzoo said that 2016 will be a pivotal year for eSports.
“The initial buzz will settle down, and the way forward on several key factors, such as regulations, content rights and involvement of traditional media, will become more clear,” Warman said. “The collapse of Major League Gaming (acquired by Activision) was a reminder that this market still has a long road to maturity and we need to be realistic about the opportunities it provides.”
“In that respect, it is in nobody’s interest that current market estimates differ so strongly. Luckily, when zooming in on the highest market estimates of more than $700 million, the difference is explainable by an in-depth look. This estimate only differs in the revenues generated in Asia (Korea in particular) and by taking betting revenues into account,” he added.
Newzoo does not take into account eSports betting sites and their revenues, explaining that the money does not flow directly back into the eSports economy. It is for this exact reason that sports market reports do not take into account reveneues from sports betting sites.
Online advertising is the fastest growing revenue segment within esports, up 99.6 percent on a global scale compared to 2014. Average annual revenue per esports enthusiast was $2.83 in 2015, and that is expected to grow to $3.53 this year.
By comparison, basketball generates revenue of $15 per fan per year. The esports audience is a valuable demographic, skewing toward consumers with full-time jobs and high incomes.
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The 80-page report is a follow-up to Newzoo’s PC gaming esports report in October 2013. Newzoo monitors esports engagement in 27 countries and uses predictive modeling algorithms cross-referenced with sports industry analysis in generating their reports.
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