E-sports is a Booming Industry Netting $905.6 Million
According to a new report researching the global E-sports economy, the industry is set to be worth $905.6 million by the end of 2018. This is largely due to the huge increase in brand investment that has grown by a staggering 48% this year. E-sports seem to be everywhere and are now even making their way onto the blockchain.
The current growth in the industry year-on-year is now said to be 38% according to Newzoo. Of that amount, 77% of the revenue is actually coming from sponsorship deals, which when you start to look at the number of people watching E-sports, comes as no surprise. Brands that are looking to gain more exposure in the general public are always looking for a new angle and as of late E-sports has been a major target.
Companies such as Red Bull and computer hardware brands are all getting in on the act. They have come to realise that gamers treat these new e-sport athletes as idols in the same way people admire their famous sports stars.
Another advantage of advertising within the E-sports industry is early brand exposure to the younger generation. With most e-sports fans naturally being less than 40, the chance for brands to advertise via sponsorship is just too good an opportunity to pass up.
Figures suggest that sponsorships make up for $359 million of the total e-sports economy; while, advertising is going to contribute another $174 million. Tickets, as well as merchandise, will generate $96 million and on top of this, there is predicted to be another $116 million that is purely for investment coming from game publishers.
Then there are media rights, which suddenly companies such as Amazon who own Twitch are looking to gain exclusive rights to televise E-sports over the internet. This will bring in yet another $161 million.
These figures make up for a 38.2% rise.
To get an idea of why e-sports are being targeted so heavily, we can compare it to real life sporting events. Football and other sports are heavily televised with millions of sports fans watching the game either by attending or on TV. As a result, advertisers and sponsors know that their brand will gain huge exposure.
With research marketers always having their fingers on the pulse, it comes as no surprise that someone spotted the fact that e-sports is a booming industry on the online gaming scene.
Financial figures such as the latest viewership for e-sports will most certainly have tickled the interest of a number of brands that see advertising or sponsoring the e-sports industry the perfect match.
This year alone 380 million people will watch e-sports events. Remember, this is not people playing e-sports games! This is people that will come online specifically to watch professional e-sports players and teams participate in major tournaments.
Out of those 380 million people, 165 million will watch e-sports as much as a sports fan will watch their favourite sports event. The other 215 million will be occasional viewers. Overall, the average revenue that will be generated per fan watching e-sports is said to be $6.6 million in 2021. At present, that figure stands at $5.5 million, which is a 20% increase since last year.
It is important to note that advertisers are mostly targeting those viewing e-sports. Those actually playing in the game for fun are unlikely to be hit with advertisements for the time being. Although, the e-sports game developers might end up allowing advertising within their games eventually. Whether this would be welcomed by players is another matter.
As it stands, most games will show the fact that players can watch the pros play using live streams. The success of encouraging those that play the e-sports games to watch the pro games is exactly why the e-sports industry is booming. Even if some of these players that do decide to watch the pro tournaments do so only occasionally.
Regional e-sports Viewership
At the moment, the most popular region for e-sports audiences is Asia or APAC. Asia is well-known for being a gaming hot sport and especially in South East Asia where there is still a flurry of internet cafes that are designed to attract online gamers. At the moment Asia takes up a whopping 53% of the 165 million viewership of e-sports worldwide. That is a massive 77 million people in Asia, which for sponsors and advertisers is a market the size of the UK’s population.
The EU has the second largest viewership in the world. However, it is very much eclipsed by Asia with the EU only making up for 18% meaning only 38.7 million. Next is North America with only 14% of the total viewership, which is 20.3 million viewers in this region. Finally, the rest of the world makes up for just 15% of the 145 million watching e-sports coming in at 21.75 million viewers, so slightly above North America.
The reason so many people around the world are able to watch e-sports is that of the ease of being able to access tournaments being played. Sites such as Twitch TV can be accessed from around the world.
On top of this, commentators make the games feel so much more like a sporting event. A single e-sports game, especially if it is very a very popular game, will have multiple commentators from around the world. Therefore, a Thai viewer will be able to watch the stream and choose Thai language commentators.
With the option of being able to select the language of the commentator you want on the game, you are watching is the reason why e-sports viewerships have gone global. In the past, most of the time the languages were English, Japanese, Korean for the most part. Now we see Russian, Chinese, Arabic, a handful of European and South East Asian language commentators.