February 27, 2020
Newzoo reports that, for the first time, eSports revenue will surpass $1 billion this year, even without including broadcasting platform revenues. By revenue, China is the largest market ($385.1 million), with North America coming in second, with $252.8 million. Although Newzoo has been criticized for hyping eSports, the research company said it has re-evaluated the size of the market with better methodologies. It stated that the total global eSports audience will grow to 495 million in 2020.
VentureBeat reports that, “eSports Enthusiasts (people who watch more than once a month) make up 222.9 million of this number” and 272.2 million are Occasional Viewers. In 2020, said Newzoo, “2.0 billion people will be aware of eSports worldwide, an increase from 2019’s 1.8 billion.”
This year, global eSports economy is due to generate revenues of $1.1 billion, a year-on-year growth of 15.7 percent. Of that, sponsorship and media rights account for 74.8 percent, totaling $822.4 million, a 17.2 percent increase from last year. Tickets and merchandise will total $121.7 million and game publishers’ investments (via tournament support through partnerships or white-label projects) will account for $116.3 million. Average revenue per eSports Enthusiasts in 2020 will be up 2.8 percent from 2019, to $4.94.
“As the eSports market matures, new monetization methods will be implemented and improved upon,” said Newzoo head of eSports Remer Rietkerk. “Likewise, the number of local events, leagues, and media rights deals will increase; therefore, we anticipate the average revenue per fan to grow to $5.27 by 2023.”
Mobile is also trending in emerging markets, with regions such as Southeast Asia expected to show 24 percent compound annual growth rate (CAGR) in 2018-2023, followed by Japan (20.4 percent) and Latin America (17.9 percent).
According to Rietkerk, Newzoo’s “data highlights that 2019 was a seminal year for many teams, with tremendous growth in traditional revenue streams such as sponsorship.” “Meanwhile, leagues have been moving toward a ‘homestand’ system in which teams play at their own venues,” he said. “This potentially opens the door to increased matchday revenues for teams, including returns from ticketing and concessions, as well as larger merchandise revenues.”
He also pointed out that, “innovative revenue streams [are] starting to develop, such as streaming and digital goods.” “These are new ways to monetize that are not available to traditional sports,” he said. “They also demonstrate a growing understanding of the competitive advantages eSports has over sports.”
In 2019, 885 major eSports events took place, generating “$56.3 million in ticket revenues, up from $54.7 million in 2018” and total prize money reaching $167.4 million, “a slight increase from 2018’s $150.8 million.” VB reports that, “the League of Legends World Championship was 2019’s biggest tournament by live viewership hours on Twitch and YouTube, with 105.5 million hours … [and] the Overwatch League was the most-watched league by live viewership hours on Twitch and YouTube, generating 104.1 million hours.”