Tuesday, January 26, 2016 : E-SPORTS REVENUES TO PASS $1 BILLION BY 2019?
Latest Newzoo study predicts vertical's revenues will boom 43 percent to $463 million this year…and that does not include betting.
The research company Newzoo reports in its latest eSports survey that 2016 will be pivotal for the vertical, and that non-betting revenues will rise 43 percent to $463 million, continuing to surge until at least 2019, when they will top $1 billion.
Newzoo says this correlates with an audience of 131 million eSports enthusiasts and another 125 million "occasional viewers who tune in mainly for the big international events."
The study found that investment and advertising associated with eSports continues to grow, commenting:
"This year has been dominated by the amount of investors getting involved in eSports. An increasing amount of traditional media companies have become aware of the value of the eSports sphere and have launched their first eSports initiatives. With these parties getting involved, there will be an increased focus on content and media rights. All major publishers have increased their investment into the space, realizing that convergence of video, live events and the game itself are providing consumers the cross-screen entertainment they desire from their favorite franchises."
On the advertising front, Newzoo found that online activity in eSports has been particularly vibrant, rising a remarkable 99.6 percent yar-on-year on a global range, with North America especially active.
Researchers at Newzoo predicted:
"In 2016, North America will strengthen its lead in terms of revenues with an anticipated $175 million generated through merchandise, event tickets, sponsorships, online advertising and media rights. A significant part of these revenues flows back to the game publisher, but across all publishers, more money is invested into the eSports economy than is directly recouped by their eSports activities."
Newzoo's eSports Analyst, Pieter van den Heuvel, said that China and Korea together will represent 23 percent of global eSports revenues, totalling $106 million in 2016.
"Audience-wise, the situation is different, with Asia contributing 44 percent of global eSports enthusiasts. Growth in this region is, for a large part, fuelled by an explosive uptake in Southeast Asia," he revealed.
At present eSports is primarily a volume business, with average annual spend per eSports player just $2.83 in 2015, which is expected to rise to $3.53 this year…that's lower by a factor of four than mainstream sports activity on traditional sports like basketball, which generates revenues of $15 per fan per year.
Peter Warman, CEO at Newzoo observed in his report: "The initial buzz will settle down and the way forward on several key factors, such as regulations, content rights and involvement of traditional media, will become more clear. The collapse of MLG was a reminder that this market still has a long road to maturity and we need to be realistic about the opportunities it provides. In that respect, it is in nobody's interest that current market estimates differ so strongly.
"Luckily, when zooming in on the highest market estimates of more than $700 million, the difference is explainable by an in-depth look. This estimate only differs in the revenues generated in Asia (Korea in particular), and by taking betting revenues into account. At Newzoo, we believe betting on eSports should not be mixed into direct eSports revenues as the money does not flow into the eSports economy. Similarly, sports betting is not reported in sports market reports."