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eSports – The Billion-Dollar Industry that Conquered the World of Entertainment

10.08.2019

Did you know that almost half a billion people are going to tune in and watch eSports competitions this year? eSports is the newest craze with players from all over the world competing in various gaming events and tournaments. With more than 165 million gamers worldwide in 2018, pro video gaming will soon be bigger than leagues such as the NF.

eSports are no longer just a leisure pastime for people. Today eSports players can make millions of dollars by competing in different eSports tournaments, or by streaming their performances on channels such as YouTube and Twitch.

The eSports industry has become mainstream, and more and more people worldwide opt-in for a pro-gamer career or tune in to watch their favorite games online.

Professional Online Gaming is Now a Billion-Dollar Industry

Professional Gaming has nowadays grown into one of the most dominant forms of entertainment, surpassing even the film and music industry. Future projections for the growth the sector predict its revenue to double from 2018 to 2020, when eSports is expected to reach almost $2 billion in revenue, compared to $906 million in 2018.

In recent years, many companies began realizing the potential of eSports and started to make significant investments in advertising in different tournaments, channels, and more. This made the industry revenue skyrocket compared to previous years.

According to the statistics provided by Newzoo, there’s been an average annual revenue increase of over 30%, with a large part of it coming from brand donations. In 2016, around $350 million out of the $493 million revenue came from brand contributions. In 2017, the revenue reached $655, with brand contributions making up $468 million of the total revenue.

In 2018, the typical year-on-year increase in the overall revenue raised with astonishing 38.2%. From this, $694 million arrived out of new investments by endemic and non-endemic brands. That is a 48% growth in brand investment from the last calendar year.

Global eSports Revenue Growth

Investments in eSports can be direct or indirect. Direct investments come from sponsorships and advertising, while indirect includes media rights and content licenses.

Sponsorships in 2018 made the most significant contribution of 40% of the total revenue. By contributing 19% of the revenue, advertising came second, accompanied by media rights at 18%. The industry also generated a large portion of its revenue from ticket earnings and game publisher fees.

According to Newzoo, earnings from media rights will double and be the most significant contributor to earnings in the upcoming years, while the earnings from game publisher fees are expected to fall by 2020 and 2021.

Global eSports Revenue Streams 2018

eSports Viewership is on the Rise

There has been substantial growth in the eSports audience since 2016 – both occasional audiences and fans or audiences who watch it frequently. The sector saw a 19.3% increase in the audience from 2016 to 2017, coming up to 143 million fans and 192 million occasional viewers watching, or a total of 335 million people watching in 2017.

In 2018, the yearly growth rate had marginally dropped at 13.8%, but that is still a substantial growth. There have been 165 million fans and 215 million occasional viewers watching, meaning the audience size reached 380 million.

For 2021, Newzoo forecasts that the yearly growth rate will likely be roughly 14%. They forecast that the number of occasional viewers will rise to 307 million and that there’ll be 250 million fans, making the audience a total of 557 million.

The steady growth of eSports viewership is very likely to continue in the next several years. The growth is confined to only eSports lovers, the number of casual viewers is also growing. This is thanks to the rising awareness of eSports among people and streaming platforms such as YouTube and Twitch.

Global eSports Audience Growth

The Rise of Streaming Platforms

It is not surprising that more and more people are currently watching eSports tournaments and live streams, taking into consideration the popularity of online platforms such as Twitch and YouTube. They make it easier for fans to keep up with the most popular eSports events live and engage with their favorite players.

Twitch and YouTube have been by far the most popular streaming platforms, with Twitch being home to over 1.13 million streamers and Youtube with 432,000 active streamers per quarter in 2018.

Twitch has seen a continuous audience gain. In 2016, there were approximately 591,809 average concurrent audiences, with the number being forecast to grow to 1.28 million in 2019, based on Twitch Tracker.

eSports Around the Globe

The eSports industry has been gaining popularity, especially in Asia. China was among the first nations to recognize eSports as an official sport back in 2003, and 13 years later in 2016, it was even declared as a national industry. The number of competitive players in the country doubled in 2018, which led online companies such as Alibaba Group Holding and Tencent Holdings to set up venues in China. The best-known Asian gaming market of all is South Korea. South Korea is regarded as the country which started the eSport revolution. Gamers such as Faker, Bang, and Wolf are considered as celebrities in the country. Japan has also experienced massive growth in the popularity of eSports.

Gaming academies are opening in countries such as China, Malaysia, Singapore, and Japan, where students pay up to $975 for a month’s tuition in peruse of their dream of becoming professional players.

The Middle East is also catching up with the trend. The United Arab Emirates is constructing the region’s first dedicated eSports venue, catering for players who can’t get enough of their favorite video games. Countries such as Dubai and Saudi Arabia are enjoying rising popularity of the sector as well.

When talking about eSports, we should not forget to mention the U.S. The country has a history of great passion for eSports for many years now and has created big names such as Ninja, Doublelift, and Hai.

eSports Betting

While betting is not included in the eSports market revenue, it’s a big cash generator. The eSports gambling has existed since the start of eSports but has only recently started to gain momentum. Betting on eSports has nowadays become the seventh most popular activity amongst bettors, making it close in popularity to golf and tennis. Since eSports continues to gain a bigger following, the eSports gambling and fantasy league markets are predicted to continue to grow.

Find the best eSports bookmakers on the market, as well as essential tips and tricks for a better outcome on our website here.

Most Popular eSports Games

League of Legends (LoL)

League of Legends is among the most popular games both for players and viewers. It is a fast-paced, competitive online game which combines the strength of an Real Time Strategy with Role Playing System elements. Two groups of strong champions, each having a unique look and abilities, battle on different maps and match modes trying to take down the opposite team or to kill their nexus.

See our full game review here.

How many people play LoL? 81 million to 100 million

Dota 2

Dota 2 is a spin-off of the popular game Defender of the Ancients for Warcraft 3. It is a multiplayer online fight arena (MOBA) game where two teams of five players each fight against each other, with each player controlling their own legendary hero. The objective of the game is to defeat the opposing team.

See our full game review here.

How many people play Dota 2? 10 million

Hearthstone

Hearthstone is a popular spin-off of Magic: The Gathering. Currently, the game is making its way to the list of the most popular eSports games. This game is played between two players who face each other using two decks of cards, with each card dealing damage is done to the opponent. The goal is to bring your enemy’s life points to 0.

See our full game review here.

How many people play Hearthstone? Over 100 million

Fortnite: Battle Royale

Fortnite is one of the most-watched games on Twitch. Players play in teams, and their primary objective is to survive. The players can find weapons around the map, which they can use to kill their enemies. As time progresses, maps become smaller, and the two teams can find each other more easily. The last standing team wins the game.

See our full game review here.

How many people play Fortnite: Battle Royale? 125 million

eSports Tournaments

2019 Fortnite World Cup

The Fortnite World Cup is the most anticipated eSports event in 2019. It includes a prize pool of $100 million. This is the largest prize pool for any eSports event in 2019. The tournament is organized by Epic Games.

League of Legends World Championship

The League of Legends Championship is organized by Riot Games. Last year, the event was one of the biggest eSports tournaments in the world, with a prize pool of $2.25 million.

The International

The International is the annual world tournament for DOTA 2. It is one of the biggest and most popular eSports events scheduled in 2019, and it offers one of the biggest prize pools in the industry – $25 million.

Call of Duty World League (CWL)

Call of Duty World League is the annual tournament for the popular game. It is organized by Activision Publishing and offers a prize pool of $6 million, making it the largest Call of Duty tournament ever.