esports is an emerging vertical of the gaming space; however, it should not be combined with virtual sports or fantasy sports. It is defined as multiplayer video gaming, played by professional gamers at a competitive level. Technological innovations in the gaming industry is a key growth driver. Advances such as facial recognition, sound recognition, gesture control, graphics, virtual reality (VR), and augmented reality (AR) have completely changed video games and have encouraged gamers to play such games. As technology advances, the thrill of playing games has also increased with a more visual stimulus, creativity, and satisfaction. AR and VR have revolutionized the esports industry. AR provides the audience with a mesmerizing stadium experience of leagues and competitions. With the use of these technologies, participants can enjoy the enhanced experience as they are physically active and involved in the game. VR is expected to be undoubtedly a strong drive for competitive experiences as the technology and software continue to upgrade. Currently, there are a few active competitive leagues that use VR. Therefore, developers are now focusing on AR/VR technology to differentiate games in the market.
- The sponsorship segment will emerge as the leading contributor to the esports industry, observing an incremental growth of over $890 million by 2025
- The increase in audience and participants is a significant factor for esports market growth rate with viewership expected to grow to 644 million, which include 347 million occasional viewers and 297 million esports enthusiasts by 2022
- North America will witness an incremental growth of over $630 million due to increased investments from game publishers, venture capitalists, and traditional media
The global esports market size is expected to grow at a CAGR of over 16% during the period 2019–2025.
This industry analysis report includes a detailed segmentation by revenue, games, e-platform, and geography.
INSIGHTS BY REVENUE
The esports market has shown tremendous growth in terms of revenue and viewership in the last few years. In 2019, out of the total esports revenue of $1.1 billion, sponsorships contributed $667 million in revenue, which was the highest. With player wages rising, the introduction of new sponsors and sponsorship sectors is critical for the future commercial success of electronic sports. Although it’s still in its infancy stage and has an irregular events season structure, sponsorship provides a platform for brands to create their events and become rights holders.
The esports revenue from the media right segment will double by 2024. The segment is likely to become the largest source of esports revenue as massive audiences, and associated advertisement revenue from established online video platforms such as Twitch, YouTube, Douyu, and Huya will support the growth of media rights fees paid to top publishers.
Advertisements generate revenue by displaying content to the viewers. This involves ad formats such as live streams on online platforms, in-between game ads, or ads shown on broadcasting media. The explosive growth in esports includes marketing performed by Arby's, Audi, Coca-Cola, PepsiCo, Gillette, and Bud Light.
ESPORTS MARKET INSIGHTS BY GAMES
Multiplayer online battle arena (MOBA) games have become incredibly popular among video gamers in recent years. MOBAs are witnessing continuous growth in emerging regions, especially in Latin America. Latin America is in the perfect position for a major upswing when it comes to the esports market. The region has 45 million viewers, with profits soaring close to $12 million in 2019.
First person shooter (FPS) games are one of the most popular genres. They have been around for decades. These games offer intense action and are simple to understand and pick up compared to RTS and MOBA games. They have been at the forefront of professional gaming, and they continue to play a big role in the esports industry. The popularity of watching videogame played on YouTube, and Twitch has shown that most videogames are appealing for audience experience.
INSIGHTS BY E-PLATFORM
Personal computers are currently the leading platform in the esports market. PC gaming is fast becoming a favorite choice among gaming enthusiasts, and this shift can be attributed to factors such as the young population, quality of gameplay, affordability, availability of top-end hardware and software, and improved internet bandwidth. With more than 60% of the people below 35 years of age, India has the largest potential market for the gaming segment. The increasing popularity and the acceptance of competitive gaming have attracted hardcore PC users, with many wanting to build their systems.
Consoles are another significant platform for recreational gaming. They are more available, far more straightforward, and cheaper. In the console, the game itself is usually controlled and manipulated using a handheld device connected to the controller. Consoles are finding increasing applications among gamers as they have a large storage capacity, which suits gamers both recreationally and competitively. However, the rise in mobile phone entertainment is gradually capturing the traditional game console market. Two significant factors are contributing to the shift in popularity from PC to mobile gaming: the performance and rendering quality of mobile games that now rival the look and feel of PC and console games, and powerful wireless connectivity performance options such as 5G.
While mobiles provide some benefits, PC and console games still come out to be the ultimate choice for gaming. The cost of using mobiles is significantly less than using a PC or console since mobile devices usually range anywhere from $250 to $1,000. They are portable than PCs or consoles. Electronic sports is a growing market with the inclusion of advanced mobile app technology. The growth trend is helping to develop new industries with new possibilities.
INSIGHTS BY GEOGRAPHY
Countries such as the US, China, and South Korea have been showing impressive growth in the development of esports games, the number of players, audience, and infrastructure. In recent years many arenas have been built across the globe, with well-designed sitting arrangements, and the arenas are well equipped with gaming equipment, lighting, screens, and supporting equipment. China's esports industry has the world's largest number of gamers. Over 600 million people play games on phones, computers, or game consoles. However, the US remains the most important esports market with large average spending per customer, high gaming penetration, and young and responsive demographics. The growth in the US is still strong, with respect to the increasing viewership and audience figures. In recent years, the APAC has emerged as the most potential market with the growing number of gamers as well as tournaments.
Europe has been one of the most important regions in the development of the esports industry. Some of the first organizations that made esports popular, especially in the West, originate from Europe. Electronics Sports League is one of the world’s largest esports organizations, which has its origins in Germany. The company has helped build and shape esports from small community events to record-breaking events, including the Intel Extreme Masters in Katowice and ESL One in Cologne. Europe accounts for almost one-third of all global esports revenues and hosts more than 70 million viewers.
INSIGHTS BY VENDORS
Esports is a booming industry, where skilled video gamers play competitively. As baseball, basketball, and football are competitive, esports encompasses competition across a variety of video games. This industry includes traditional sports-related games such as NBA2K and FIFA and notably games such as League of Legends, Counter-Strike, and Dota. Valve, Activision, Riot Games, and EA have, for many years, brought to gamers some of the most detailed, deep, and competitive multiplayer games. These publishers set the standard and create experiences that are brimming with competitiveness. Blizzard is well experienced in the world of professional gaming. The games such as Starcraft, Warcraft, and now Overwatch makes for some of the entertainment, popular, and lucrative pro-gaming scenes.
- Game Publisher Fee
- Merchandize & Tickets
- Media Rights
- Multiplayer Online Battle Arena (MOBA)
- Player vs. Player (PvP)
- First Person Shooters (FPS)
- Real Time Strategy (RTS)
- Salons & Spas
- PC-based Esports
- Consoles-based Esports
- Mobile & Tablets
- North America
- South Korea
- Latin America
- Middle East & Africa
- South Africa