Is Esports A Billion Dollar Industry?

The esports industry is growing rapidly and is on track to become a billion dollar industry. But what exactly is esports? And what is driving this growth?

Introduction

The global esports economy will reach $696 million in 2017, a 41.3% increase from last year. This is according to a new report from esports research firm Newzoo.

This marks the first time that the esports economy has exceeded $700 million. It is also the first time that North America has generated more than $300 million in revenues, with a total of $345 million this year. Europe remains the second largest region with $257 million in revenues, followed by China with $127 million.

Interestingly, though, the majority of revenues (62%) still come from sponsorship deals, with 26% coming from advertising and 12% from media rights deals. This means that there is still a lot of room for growth in other areas such as ticketing, broadcasting, and merchandising.

With so much money flowing into the industry, it’s no wonder that some people are wondering if esports is a billion dollar industry. And while it’s not quite there yet, it’s definitely on track to reach that milestone soon.

The Numbers

Global Revenue

The global esports economy will grow to $1.1 billion in 2019, a year-on-year growth of 27.4 percent, according to a new report by research firm Newzoo.

This marks the first time that the industry has eclipsed the $1 billion mark, and it is largely thanks to increased investment from brands and advertisers. Brand investment in esports will total $694 million this year, up from $463 million in 2018.

“With over 3 billion fans worldwide, esports is one of the fastest-growing entertainment genres among Gen Z and Millennial consumers,” said Newzoo CEO Peter Warman. “Thanks to its online nature, global reach, and millennial appeal, esports provides a unique opportunity for brands to reach these valuable consumer groups.”

Other key findings from Newzoo’s report include:
-The Asia-Pacific region will generate 39 percent of global esports revenues ($419 million) in 2019, followed by North America (34 percent; $364 million) and Europe (22 percent; $241 million).
-The majority of esports revenues ($696 million or 63 percent) will come from sponsorship deals this year. Media rights (19 percent; $208 million) and merchandise & tickets (10 percent; $116 million) are also significant revenue streams.
-There are 2.2 billion gamers worldwide, with nearly half (46 percent) watching esports regularly. Of these viewers, 183 million can be considered Esports Enthusiasts who watch esports content more than once a week.

Audience Statistics

It’s no secret that esports is on the rise, but just how big is the competitive gaming industry? Newzoo’s Global Esports Market Report attempts to answer that question by providing a comprehensive overview of the scene, including audience figures, revenue estimates, and more.

Here are some of the key takeaways from the report:

-The global esports audience will reach 380 million this year, up from 335 million in 2017.
-Of those viewers, 165 million are “esports enthusiasts” who watch competitive gaming regularly.
-The remaining 215 million viewers are “occasional viewers.”
-The esports audience is predominantly male (64%) and young (70% are under the age of 35).
-North America and Europe are the two largest markets for esports, with audiences of 68 million and 67 million respectively.
-China is a close third with 65 million esports viewers.
-Revenue from esports will reach $906 million this year, up 38% from 2017.
-Sponsorships and advertising account for the lion’s share of that revenue (42%), followed by media rights (19%), game publisher fees (16%), merchandise and tickets (11%), and betting and fantasy sites (10%).

Most Popular Games

There are different ways to measure the popularity of video games, but one metric is the number of unique players. That’s the number of people who play a particular game at least once during a given period of time. Here are the 10 most popular video games based on unique players in 2019:
-Fortnite: 78.3 million players
-PlayerUnknown’s Battlegrounds (PUBG): 58 million players
-League of Legends: 55 million players
-Minecraft: 48 million players
-DOTA 2: 32 million players
-Apex Legends: 25 million players
-Call of Duty: 25 million players
-Overwatch: 23 million players
-Counter-Strike: Global Offensive (CS:GO): 21 millionplayers
-Hearthstone: 20 million players

The Future of Esports

The industry of Esports has been around for almost two decades and has only continued to grow in recent years. With the rise of live streaming platforms such as Twitch and the growth of mobile gaming, the Esports industry is showing no signs of slowing down. In fact, according to a recent report, the industry is on track to generate a total of $1.65 billion in revenue by 2021.

Growth Predictions

The esports industry is predicted to grow rapidly in the next few years. According to a report by Newzoo, the industry is expected to reach $1.79 billion by 2022. This would be a huge increase from the $696 million that it was worth in 2017. The report also predicts that the esports industry will have a global audience of nearly 454 million people by 2022.

New Tournaments and Leagues

There are a number of new tournaments and leagues cropping up in the esports world. While some of them are one-off events, others are part of a larger circuit or even a permanent fixture. Here are some of the most notable recent additions to the competitive landscape:

The Overwatch League is one of the newest and most prominent esports leagues. It is operated by Blizzard Entertainment, the developer of the popular first-person shooter Overwatch. The league debuted in January 2018 and featured 12 teams from across the globe competing in regular season play. The inaugural season ended with the Philadelphia Fusion defeating the London Spitfire in the Grand Finals.

The NBA 2K League is another recent addition to the world of esports. It is a professional esports league that is co-operated by the National Basketball Association and Take-Two Interactive, the developer of the NBA 2K series of basketball video games. The league debuted in May 2018 with 17 teams from across North America competing in regular season play. The first season ended with Knicks Gaming defeating Heat Check Gaming in the Finals.

The ELEAGUE is a professional esports league that is operated by Turner Broadcasting System, a division of WarnerMedia. The league was founded in 2016 and has featured a number of different games over its three seasons, including Counter-Strike: Global Offensive, Overwatch, and Street Fighter V. The most recent season concluded with Team Liquid defeating Evil Geniuses in the Counter-Strike: Global Offensive finals.

Increased Sponsorship and Investment

The global esports market is expected to reach $1.65 billion by 2021, up from $696 million in 2017, according to research by Newzoo. This rapid growth is being driven by an increase in investment and sponsorship from some of the world’s biggest brands and organizations.

Manufacturers such as Alienware and Razer aresponsoring numerous professional teams and events, while tech giants like Amazon, Google, and Microsoft have all invested in the industry through their own gaming platforms

With more traditional sports organizations and athletes also getting involved, it’s clear that esports is here to stay and is only going to continue to grow in popularity. This infrastructure development will be essential to support the future growth of the industry.

Conclusion

Yes, esports is definitely a billion dollar industry. In fact, it’s probably even bigger than that. According to a report by Superdata, the global esports economy was worth $696 million in 2017. And it’s only going to grow from there. By 2020, the esports economy is expected to be worth $1.5 billion.