SuperData Report Indicates Esports Revenues and Audiences Will Hit New Heights

[toc]SuperData, a firm that provides market data and insight on digital games and playable media, has issued a short report on the future of esports ahead of an upcoming esports conference in London.

The company says esports revenues will hit $1.36 billion by the year 2019, with a global audience reaching 330 million by the same year.

Publishers to push esports revenues past $1 billion this year

As industry revenue grows, SuperData says competition will become stiffer in a limited market. With an increase of about $233 million this year, limited growth should result in some new players being boxed out.

“Initiatives by large and small Western publishers, like Activision and Psyonix, will grow Europe and North America’s combined revenue by 27 percent in 2017,” said the report.

Global revenue will amount to $1.13 billion, up by 27 percent year-over-year. This figure is forecasted to grow to $1.24 billion in 2018 and $1.36 billion in 2019. This leads to a three-year CAGR of approximately 15 percent.

As for the geographic split, Asia will lead with $406 million, or 36 percent of the global split, with North America following closely with $392 million, or 35 percent. Europe will account for roughly $300 million, or 26 percent, with the rest being contributed by other areas around the world.

Direct revenue will grow by 36 percent in 2017

Direct revenue, like ticket sales and betting proceeds, account for approximately 26 percent of the overall revenue, says SuperData. As prize pools are increasing (up by 27 percent YoY), more funds are flowing into the industry. The combined direct stream of monies is expected to grow to $231 million this year, a growth of 36 percent YOY.

“Game makers and third-party organizers are running more tournaments with large in-person audiences,” the report stated. “As a result, ticket and merchandise sales grow to $74 million, up from $53 million last year.”

Indirect revenue streams, such as sponsorships and advertising, account for the remaining 74 percent of the market size.

Many mainstream sponsors have recently shown interest in the esports industry and its popularity among young adults. These include major brands like Adidas, Coca-Cola, Visa, and more. SuperData predicts that by year’s end, sponsorship of tournaments, players, and esports-related sites will reach $839 million.

To put this into perspective, this figure is five percent higher than the NBA’s sponsorship total for the 2015-16 season.

Global audience will keep growing

For 2017, SuperData forecasts worldwide esports viewership will increase by 21 percent.

The growth will be driven by more tournaments and platforms where enthusiasts can become part of the esports crowd. Moreover, as popular games like Rocket League and Hearthstone emerge (titles with lower barriers to entry), casual games have an easier time getting involved in the industry.

While the esports fan base is expected to hit the 300-million-fan milestone by 2019, the report points out that more fans don’t necessarily result in higher revenues.

“The relationship between viewership and ROI is still unclear, so added viewers are not necessarily indicators of revenue growth,” the report stated.

Companies looking for alternative ways to attract young viewers

TV networks, like ESPN, are moving into esports to reach a viewership that prefers competitive gaming to traditional sports.

Not only has ESPN launched a dedicated esports section, but ESPN2 now also airs tournaments for popular esports titles, like Heroes of the Storm.

Facebook is also putting in effort to capture the young and engaged esports audience. The social network is cooperating with esports industry organizations to steer more popular content to its platform. Additionally, as a mainstream platform, Facebook lowers the barrier to entry for online esports viewing.

“Aspects of Twitch (like its lightning-fast chat feed) intimidate newcomers, but Facebook’s features are well-known,” SuperData’s report stated. “Users can come across esports streams in Facebook feeds without actively seeking out game content.”

Don’t miss eSCon Europe – The Esports Conference

For those interested in generating connections and insight into building a thriving industry, keep an eye on the eSCon Europe esports conference, which will run April 5 and 6 at Le Meridien Piccadilly in London.

Read also: How to open a Betway account

It’s the perfect destination for interested organizations and individuals looking to get involved in the esports industry or expand their existing networks. More details and registration info can be found on esports-europe.com.