An interesting view on eSports potential
News on 14 Jan 2016
News on 14 Jan 2016
Respected business and professional services analysts Deloitte Global has issued an interesting perspective on eSports, predicting that this increasingly important and popular genre will generate global revenues of $500 million in 2016, up 25 percent from about $400 million in 2015, and will likely have an audience of regular and occasional viewers of close to 150 million individuals.
“The very idea that people may be willing to watch other people play competitive video games for big money prizes may surprise some.” the study comments. “These skeptics often under-estimate the global annual market size as being in the millions of dollars only. Conversely, eSports advocates overestimate the current market size, believing annual revenues are already in the billions, and comparable to major league sports.”
Today, a major eSports event may attract 40,000 people watching live, and tens of millions watching over the Web. This could be interpreted as meaning that “eSports is bigger than basketball”. That may be true when measured by audience size for an individual event. However, there are far fewer major events for eSports than for traditional sports, which means that in dollar terms eSports is not yet playing in the big leagues, the report notes.
“Revenues for e-Sports are predicted to grow 25 percent in 2016, which is better than most mature sports, but not especially impressive for a new entertainment market. However, some believe eSports is approaching an upward inflection point: one American analyst predicts that eSports in the US alone will leap from $85 million in 2014 to $1.2 billion in 2018: a 94 percent compounded growth rate, which is triple the projected 2016 growth over 2015.
Deloitte does not believe the annual growth rate of eSports revenues is about to triple, but even if it does it will still only represent one percent of global sports revenues. That being said, eSports does reach tens of millions of people on a regular basis, and over a hundred million occasionally – making it comparable to some traditional sports.
Tech and media companies are paying attention to eSports, for both growth opportunities and because it appeals to a narrow and desirable demographic: 75 percent are millennials aged 18-34, and 82 percent are men.
Amazon acquired Twitch for just under $1 billion in 2014, while 2015 saw Swedish media company Modern Times acquire a majority stake in ESL, the oldest eSports company for $87 million. Russian investors have committed $100 million. Canadian motion picture exhibitor Cineplex is spending $15 million to acquire an eSports company and create a new gaming league that will take place in its theatres, and the first dedicated eSports venue has been opened in the UK in partnership with a cinema chain. Although e-Sports might not match or surpass traditional sports any time soon, its potential business value is clearly too significant to ignore.
The perspective continues with detailed graphics and numbers and is well worth a read here:
