The eSports industry has seen tremendous growth over the years, both in terms of viewership and revenue. The increasing viewership is what mainly contributed to the revenue growth – and it's not just because those viewers are generating revenue. Seeing the potential of reaching a large and engaged audience, brands are investing in eSports marketing, both directly and indirectly. This has contributed to rapid revenue growth in the industry, only slowed down by COVID limiting large public eSports events.
eSports has also experienced growth in several other aspects, with many of them interrelated in one way or another. In this post, you will learn more about just how much the eSports industry is growing so you can understand how to leverage it.
Leverage the Growth of eSports (With the Stats Associated):
eSports Viewership is Growing
Since 2016, there has been a significant increase in eSports viewers – both occasional viewers and enthusiasts, i.e., viewers who watch it regularly. Between 2018 and 2019, there was a 12.3% increase year over year. In 2019, there were 245 million casual viewers and 198 million enthusiasts, making the total audience 443 million.
By Feb 2020, the year-over-year growth rate had slightly dropped to 11.7%, although that's still a sizable increase. In 2020, there were 272 million occasional viewers and 223 million enthusiasts. So, the total audience size grew to 496 million, almost half a billion eSports followers.
By 2023, Newzoo predicts that the annual growth rate will be approximately 10.4%. They also expect that the number of casual viewers will grow to 351 million. And that there will be 295 million eSports enthusiasts, making the total audience 646 million.
Newzoo has also released statistics highlighting the growth in the European audience for eSports. The total audience for eSports in Europe was 79 million in 2018, growing to 86 million in 2019 and 92 million in 2020.
As you can see, there has been a steady growth in eSports viewership, and the trend is likely to continue in the coming years. The increase isn't just limited to dedicated eSports fans; there also seems to be an increase in people who view it casually. This is likely a result of increasing awareness about eSports and ease of access to the internet.
Also, viewing platforms like Twitch and YouTube have seen growth in their users. That's another contributing factor to eSports audience growth. You will learn more about these factors later on in this post.
However, there is one proviso regarding expectations of future growth. The above predictions for future growth were made before COVID had such an impact on the world. Newzoo recognizes that "the eSports audience is not smaller (meaning there's no decrease in demand), and the number of organizers is not fewer (so there's no decrease in supply)." However, this year has seen eSports events postponed and cancelled, and if this continues, it may impact future growth.
eSports Awareness is Increasing
One of the main reasons why there has been growth in eSports viewership is because more people are learning about it. There has been a tremendous rise in awareness of the eSports industry since 2015. Back then, there were slightly more than 800,000 people who had heard about it. These numbers soon changed, and by the next year, more than a billion people had learned about eSports.
These numbers continued to increase in the following years, by a few hundred thousand annually. By 2017, eSports awareness had risen to 1.28 billion, and it reached 1.43 billion by 2018. Statista doesn't appear to have continued recording these figures since then, but they predicted that by 2019, an estimated 1.57 billion people were likely to be aware of eSports.
We can, however, glean additional information on eSports awareness from Newzoo's report. They indicated that the global awareness of eSports in 2019 was actually 1.8 billion, and they expected this to rise to 2.0 billion in 2020. Newzoo expects that 530.4 million of these will be Chinese.
So what does this increase in viewership and awareness mean for brands? For the most part, it says that they have a new channel to target in their marketing mix. It also says that they have more people to reach within the eSports industry. So, eSports marketing will help them expand their reach and deliver their marketing messages through engaging channels.
The rise of Platforms Offering Live eSports Coverage
It's no surprise that more people watch eSports videos and events considering how online platforms now make watching eSports content more accessible. eSports streamers use these platforms to broadcast live coverage of events and their own gameplay. This makes it easier for fans to participate in their favorite events and engage with their preferred eSports athletes.
So, you can see an increase in the number of viewers and broadcasters on these platforms as well. Although not all the viewers and broadcasters on these platforms are relevant to the eSports industry, this increase still likely affects the industry.
Streamlabs made some interesting observations in their Q3 2020 report. The majority of streamers still prefer Twitch. It represents 91.1% of the market share for hours streamed, up 14.5% from Q2 2020. The reason for this significant increase was because of Microsoft's shutting down of Mixer. However, Facebook Gaming also saw an increase in market share, up 1% over the quarter to 3%. YouTube Gaming hasn't benefited much from Mixer's end, dropping 1.2% to have a market share of 5.5%.
Twitchtracker provides some interesting statistics about Twitch's progression over the years. COVID lockdowns have led to many people increasing their time on Twitch. 889 billion minutes have been watched over the last year, up from 660 billion minutes in 2019. Similarly, there are now 4.4 million monthly streamers in Twitch in 2020, compared to 3.64 million in 2019.
The platform has also seen a steady increase in the number of channels simultaneously broadcasting live. This number increased by 20% in 2019, with 49,500 average concurrent live channels. In 2020, the increase so far has been 69%, with 83,900 average concurrent live channels. So, there is a ton of activity on these platforms, signifying that eSports fans are highly active and engaged with relevant content.
People are Spending More Time Watching eSports
Audiences watched over 7.46 billion hours of content across all live-streaming platforms in Q3 2020, slightly down from Q2's 7.71 billion hours. Surprisingly, considering its fall in market share, YouTube Gaming experienced the most growth for hours watched with an increase of 156M hours from Q2 to Q3. Facebook Gaming exceeded 1 billion hours watched for the first time.
However, although Q3 2020 saw a small drop in hours viewed, it still represents a 91.8% increase on the 3.89 billion hours watched in Q3 2019.
Streamlabs also included some data about the top eSports watched during the quarter (Q3 2020). LCK (League of Legends Champions Korea) saw 33,310,312 hours watched. This was closely followed by the PUBG Mobile World League 2020, with 33,179,000 hours watched, and League of Legends European Championship, with 28,957,234 hours watched.
Since consumers spend so much time on eSports, this means that brands need to meet them where they're at by adopting eSports marketing. This could be through ads, reviews, product positioning, influencer marketing, and more.
eSports Revenue Growth and How Brands are Contributing to It
Realizing the potential of tapping into the eSports market, some brands have already made significant eSports marketing investments. So, the industry has seen an impressive increase in revenue in recent years.
According to the previously cited Newzoo analysis, there was an average revenue increase of more than 30% annually until 2018. The rate of increase decreased at this point; however, eSports revenue in 2019 was $957.5 million, still a 23.3% YOY growth (and slightly greater than what Newzoo had predicted). Yet, COVID has had a noticeable impact on eSports revenue, and Newzoo has revised its 2020 eSports revenue estimates downward from $1100.1 million (as predicted in February 2020) to $950.3 million globally. If this is accurate, it will represent a fall of 0.8% in YOY revenues. This fall in revenue will predominantly occur because there is currently almost no in-person attendance at eSports events, with restrictions on large gatherings. As we have seen elsewhere, eSports and gaming are more popular than ever – there are, however, COVID-related restrictions on revenue streams at the moment.
Newzoo’s latest estimates of eSports revenue streams, suggest that the $950.3 million is likely to be made up as follows: sponsorship $584.1 million (up 7.5%), media rights $163.3 million (up 3.3%), publisher fees $108.9 million (down 11.6%), merchandise & tickets $52.5 million (down 50.3%), digital $21.5 million (up 60.9%), and streaming $19.9 million (up 44.9%). The effects of COVID are obvious when you look at the relative changes in the revenue streams.
Visible Growth in eSports Tournaments
There's little doubt that with so much growth in many of these statistics, there would also be growth in eSports tournament prize money and player earnings – at least until COVID arrived. In 2018, the total prize money for 4579 tournaments was $164,829,763. So, the mean tournament prize pool was $35,997. With 23,020 active players at these tournaments, the mean earnings for each player were $7,160.
In 2019, the total prize money for 5288 tournaments was $234,433,656, up 42%. So, the mean tournament prize pool was $35,997. With 27,279 active players at these tournaments, each player's mean earnings were $8,594, up 20%.
Unfortunately, COVID has seen a considerable drop in both the number of tournaments and total prize money offered. As of late October, the mean earnings per player plummeted to $3,975.
These stats showcase eSports' rapid growth until the recent temporary reduction due to the effects of COVID on large-scale events. Gamers are spending more time than ever on the streaming platforms at the moment; however, they have less competitive content to view.
But this will only be temporary. The reduction in eSports events is considerably less than many traditional sporting occasions. Many competitive eSports continue. You can still sponsor teams at tournaments (remember that sponsorship has continued to rise, despite the effects of COVID). Perhaps you could also partner with influencers in the industry and have them promote your brand or review your products. There are tons of opportunities you can seize to ride the wave of eSports' popularity.