The esports industry will surpass the $1.5 billion mark in global revenues over the next two years. A report by British multinational professional services firm Deloitte has revealed that the global esports industry is expected to rake in over $1.5 billion in revenues with a fanbase of 600 million gaming enthusiasts by 2020.
The inflection point has been mainly attributed to the mushrooming interest in competitive gaming, successful esports leagues, increase in online viewership and venue audience, support from sponsors and broadcasters and overzealous interest from social media and streaming services platforms to acquire the exclusive rights to broadcast esports events across the globe.
The exponentially rising financial might of esports will then reach the valuation of the French top-tier football – Ligue 1 and nearly a third of the size of the NBA.
The report has particularly noted the launch of the NBA’s esports league, the massive audiences drawn by Valve’s 2017 International DotA 2 Championships and the Overwatch League – including a sold-out Barclays Center in Brooklyn for the finals – and the financial investment of business luminaries like the former Hewlett Packard CEO as signs of continued acceleration.
“Even in the past three or four months, it feels like it’s hit another gear,” Giorgio, who leads the Deloitte’s U.S. sports practice, said. “There’s a level of professionalism and just a level of business that’s associated with [esports] that we hadn’t seen before. When Meg Whitman comes out and becomes part-owner of an esports team, that’s real business.”
In 2017, Nielsen Media had reported that two-thirds of esports fans, who are predominantly young males, watch live streams and 37 percent had attended an esports contest. Deloitte research found that half of Generation X plays video games at least weekly, which is close to the level for Gen Z and millennials.
From team-based battles and first-person arena combat to digital versions of professional sports and mixed martial arts, eSports are drawing large audiences of fans with a passion for competitive video gaming—both as participants and as observers through platforms such as Twitch. And many big companies across the media and entertainment industries are getting involved, vying for access to an audience that’s moving beyond the reach of traditional media.
Some of the popular game titles have created a watershed moment for the global esports. Only eight months after its release, Epic Games’ Battle Royale genre shooter game Fortnite: Battle Royale counted 40 million users logging in to play each month. In addition, Fortnite has swiftly become the most-viewed title on Twitch, with more than 4,500 user channels streaming the games—and an average of over 140,000 viewers at any given time watching players and their commentary.
Similarly, in just one week in June 2018, viewers on Twitch spent 17.7 million hours watching players compete in League of Legends matches. The overall numbers of eSports viewers and hours are large and growing, raising the stakes for businesses looking to get involved either in front of or behind all those screens, states the report.
The global eSports market is expected to generate $1.5 billion in annual revenues by 2020, primarily from sponsorships and advertising to an estimated global audience of 600 million fans. Marketers bestowed more than 600 brand sponsorships on eSport titles and events in 2017 alone. Additional money comes from betting, ticket sales, and merchandise.
Revenues and engagement from eSports are increasingly driving top gaming publishers’ valuation and sales. In its Q4 2017 earnings announcement, Electronic Arts reported 18 million players engaged in competitive gaming on its FIFA 18 and Madden NFL 18 titles, up 75 percent over the previous year. Ubisoft followed suit in its FY 2017 earnings, citing record eSports viewership with Rainbow Six Siege. The report has also noted that more popular game titles are shifting to offer competitive multiplayer experiences.
Social media and streaming platforms are also among the growth drivers who are betting millions to acquire exclusive broadcast rights to some of the top-notch esports leagues and competitions. Facebook has bagged exclusive rights to livestream tournaments of four popular eSports organizations, including Valve’s Counter-Strike: Global Offensive Pro League. Amazon’s streaming service, Twitch, has acquired exclusive rights to stream Blizzard’s Overwatch League games.
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