ESports revenues to break through $1bn barrier next year, says report
ESports revenues are on track to exceed $900 million this year and to break through the $1-billion barrier next year, according to a new industry report from Futuresource Consulting.
Adam Cox, senior analyst - imaging & pro video at Futuresource Consulting, said: “ESports has been around for a while, but is now really starting to enter the mainstream. It’s riding a rising wave of consumer awareness, as celebrities and traditional sports teams get involved, household brand names take a piece of the sponsorship pie, and the likes of Turner, BBC and Sky invest in content acquisition and production.
“Key events such as Dota 2 are now enjoying viewing figures comparable to major conventional sporting events. As a result, securing exclusivity of major eSports tournaments will become increasingly strategically important for both traditional sports broadcasters and established eSports platforms such as Amazon-owned Twitch.”
The report points out that established eSports audiences in Asia are now being matched by growth in North America and Europe, which are contributing significant revenues because of their higher levels of spending power.
Cox said: “ESports currently caters for a global audience of approximately 410 million fans. As organisers seek to attract older demographics and more females to the sector, we expect global audiences to almost double by 2023. This will result from a rise in popularity in emerging regions, as well as wider appeal in established markets.
“Sponsorship accounts for the majority share of industry income, contributing to over 40 per cent of total revenues. With all the buzz around the sector and the promise of mainstream success, established eSports sponsors such as Intel, Razer and HyperX are now being joined by non-incumbent brands such as Coca Cola, McDonalds and Mercedes Benz.
“This is triggering significant tournament prize pools, with global prizes totalling $205 million for the 4,000 plus events hosted last year. In comparison, men’s tennis ATP Tour’s prize pool for 2018 totalled $135 million. We’re seeing a virtuous circle that can only increase the exposure and profitability of esports.”
Discussion over eSports joining the Olympic programme was recently stoked by reports that International Olympic Committee officials have held talks with senior executives at Intel, the computer technology giant that is a top-tier ‘TOP’ Olympic Games sponsor over the issue.
Scott Gillingham, head of gaming and eSports at Intel UK said: “"We don't have a view on whether it should be [included] or not but we’re totally open and have been talking to the Olympics to let them understand what eSports is and what potential there could be for it, but ultimately it is down to the Olympic committee on whether they decide to bring it on.”
Cox commented: “With rumours in the IOC suggesting that eSports could be an official Olympic sport as early as 2024, the social acceptance and resulting industry returns are very much heading in the right direction. It’s a great time to be involved in eSports, with plenty of opportunities making themselves known across a range of tech and creative industries.”
Meanwhile, the owner of the New York Mets, a team in US baseball's National League East, is throwing its weight behind a new eSports organisation called Andbox, that will organise and operate teams from New York City in multiple games and eSports leagues.
Andbox is officially backed by Sterling.VC, an investment fund controlled by the umbrella company Sterling Equities. The latter firm was co-founded by Fred Wilpon, the Mets owner, and is now the full owner of the Mets franchise.
Sterling.VC already backs New York Excelsior, the eSports team competing in the Overwatch League, and in May this year paid what was reported to be a $25 million fee to buy a space in the upcoming Call of Duty league for a New York team. According to reports, Andbox will now take over operational control of both teams.
Andbox branding will be used for both New York sides too.
Andbox’s backers have said it will also host additional eSports events in New York City, as well as creating its own range of lifestyle and apparel merchandise.
Scott Wilpon, an Andbox co-founder (and chief operating officer of the Mets), said: “We are excited by the possibilities Andbox unlocks to represent New York in the world’s pre-eminent esports leagues, and we’re continually on the lookout for new opportunities.”
Sterling Equities also owns the SportsNet New York television network.