Earlier this month, a report on the eSports industry was released by the world leading market research firm, SuperData Research. Besides outlining the annual revenues for the field, the report also noted year over year growths in several sectors and looked to answer many important questions.
Key findings of the report include:
- The number of viewers eSports reached in 2016.
- Projected viewership and revenues for the future
- Global revenue for the worldwide eSports market and year over year growth figures
- Current leaders of the eSports market
- Viewer demographic
The report also looked to answer few questions for interested parties.
- How do I understand the opportunity of eSports for me?
- Who is the eSports audience?
- How to interpret opportunities in eSports.
- How to target the eSports audience?
- How to predict and understand the changes in the market over the next few years?
Number of ESports Viewers
According to the SuperData report, in 2016, the viewership for competitive digital gaming or eSports reached more than 213.8 million people. The number of eSports viewers for this year showed a drastic increase compared to last year. Global viewer number for 2015 was recorded at 188 million. This reflected a 13.8 per cent year over year increase across the world.
The numbers seemed to also agree with the 2016 Nielsen eSports Report. The report stated that viewership of eSports contests amongst people aged 13 and over in the USA grew 14 per cent in 2016. The Nielsen eSports Report is a comprehensive look into consumer interaction with one of the fastest growing past- times in the United States of America.
This growth can be attributed to several actions that have been taken by publishers. Examples of this include the conversion of popular titles like Rocket League, Hearthstone and League of Legends into eSports. Valve, the American video games developer and digital distributor, also rewarded its Dota 2 players by releasing contents for the game to raise The International prize pool.
However, the research company cautioned that the added number of viewers does not necessarily indicate a growth in revenue for the industry.
ESports Revenues for 2016
According to SuperData Research, the total revenue for the global eSports market was reported at USD 892.8 million in the 12 months of 2016. This represented a 19 per cent year over year gain compared to the previous calendar year.
Consumers from the Asian markets made the largest contribution. A total of USD 328 million was reported in profits for the Asian market. They continue to lead the sector of the industry. Most of this input came from the countries – Korea and China. League of Legends, which has been recorded as the top grossing PC game, has its top teams from Korea. Another popular eSports game, Dota 2 has the largest eSport prize pool provider. The title too has a prominent number of teams from China.
The markets in both North America and Europe have also shown significant growth in 2016. Both the markets generated similar revenues. The North American market reported profits of USD 275 million, while the European market reported revenues of USD 269 million for the year of 2016.
Breakdown of Revenues
The SuperData report also revealed that only 26 per cent of the revenues came from direct consumer contributions. ESports enthusiasts spent USD 231 million on tickets, merchandise and prize pool contributions. Out of which only nine percent of the reported revenue came from tournament prize pools. This amounted to a sum of or USD 78 million. Four percent of revenues came from ticket sales; that also amounted to a sum of USD 34 million. Despite the low contribution, direct consumer revenues, saw a year over year growth of 36 per cent.
The largest contribution to the overall eSports revenue for 2016 came from indirect sources, namely sponsorships and advertisement. ESports betting sites, amateur tournaments and merchandise sales were responsible for 74 per cent of the overall revenues from last year.
Most eSports Participants are Young Male
It is probably unsurprising but the report also confirmed a large majority of eSports viewers and players are from the young male demographic. An overwhelming 85 percent of eSports audience and players from the US are males. Nearly half of which, 46 per cent to be exact, are between 18 and 25 years in age. It has been further reported that the average annual income of the American eSports consumer is USD 45,000. This makes the group a very desirable target for associated businesses. The gaming industry has struggled to find a hook to entice younger players to their casinos and sites in recent years, with their dated offerings. However, eSports might provide the answers to how to engage the coveted millennial male demographic.
ESports could be equally attractive to female viewers and players. Unfortunately, it is only the online toxicity that discourages female gamers from becoming professionals, according to SuperData.
This is evident in the case of the first pro female player Maria “Remilia” Creveling. During each off season in League of Legends, the most popular game in competitive eSports gaming, two teams from the Challenger series get the chance to play into the LCS. One such team in 2015 was the Renegades, which features Maria “Remilia” Creveling. She was a lauded Thresh player. Creveling, who is a transgender female, was both the first female and transgender player to compete professionally in League of Legends. Unfortunately she later dropped out of the pro league due to online harassment. Unfortunately widespread bullying discourages more girls from entering the areana.
ESports Entering the Mainstream
It is hard to tell whether eSports is gradually entering the mainstream due to its growing popularity, or whether its popularity is growing due to its entry into the mainstream. However, it is undeniable that eSports have gained so much stature in recent years that even the big traditional media channels like TBS and ESPN are starting to taken note of the sport. Until recently, fans would have to seek out platforms in order to watch tournaments and players. However, now with the mainstream channels looking into broadcasting their games, people can stumble upon eSports while flipping through channels. Even old- fashioned brands are taking notice of the sport. There has been a growing interest from advertisers as eSports allow them access to the young male millennial demographic like no other platform does. The large year over year revenue growth that was witnessed in 2016 was also a result of more brands and advertisers entering the market.
Future of ESports
The eSports market is growing quickly and according to SuperData, the market is set to reach USD 1.1 billion by the year 2018. The overall growth will be a result of direct revenue sources as well as indirect sources like betting sites and amateur tournament platforms.
It has also been projected that the global viewership of eSports will reach a staggering 303 million by the year 2019.
Comments from SuperData Research
According to SuperData Research, they have been working with publisher clients and brand owners over the course of 2016 to map out the market for competitive gaming and help them identify key areas and opportunities. In addition, they have also been looking at the overall market and its trends. The Spring 2016 eSports Report demonstrated a breakdown of the revenue distribution between direct consumer monetisation, such as fantasy and betting sites, merchandise and indirect revenue, such as advertising.
About SuperData Research
SuperData Research is the world’s leading provider of market intelligence. They cover the entire video game market across mobile, PC, and console. Founded by veteran games industry researchers, SuperData offers quantitative and qualitative insights on free-to-play gaming, digital console, mobile, PC downloadable, streaming media, eSports and virtual reality.
Through proprietary data partnerships, they collect point of sale and instance data from publishers, developers, and payment service providers. This allows them the opportunity to analyse the monthly spending of more than 78 million unique, paying digital gamers from around the world. This also makes them the only provider to offer insights into the age of personal media using transaction level data that is truly comprehensive and cross platform.
SuperData believes media is becoming more personal, creating a cross- platform world of immersive and interactive experiences. With their data and insights, they can guide the strategy of major publishers, developers, brands, hardware makers, venues, investors, and everyone else with a stake in the evolving consumer. SuperData boasts a working relation with everyone in the broader gaming industry.