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Report: eSports revenues to hit $465m in 2017

By Dan Pearson

Report: eSports revenues to hit $465m in 2017

Tue 17 Feb 2015 4:30pm GMT / 11:30am EST / 8:30am PST
eSportsInsights

Newzoo expects market to more than double, compares audience size to NFL

Newzoo

Newzoo is the global leader in games, esports and mobile intelligence with offices in Amsterdam, Shanghai...

newzoo.com

The esports market, already worth $194 million per year, is set to more than double in size by 2017 according to a "conservative scenario" from research firm Newzoo, which pins a predicted value of $465 million on the sector within two years.

Released as part of a free preview to its new report "The Global Growth of Esports: Trends, Revenues and Audience Towards 2017", the figures equate the growth of esports to that of analogous athletic sports like Ice Hockey and American Football, estimating that there could be as many people watching esports in 2017 as there are watching the NFL now. Extrapolating from that growth, the report estimates that there could be as much as $1 billion worth of revenues being generated by esports within two years.

"In terms of audience, the number of esports Enthusiasts will jump from 89 million last year to 145 million in 2017," the report reads. "Another 190 million will watch esports competitions occasionally, showing that competitive gaming has evolved to a Spectator Sport with a fan base comparable to that of Volleyball, American Football or Ice Hockey. Following a year of explosive growth in audience and money involved, 2015 will be pivotal in determining the future of esports."

growth

Key to the growth analogy between esports and traditional spectator sports is the evolution of the market and the influx of capital - in particular, the establishment of esports as a genre which pulls in cash from external markets, sponsors and directly from customers itself, rather than just the publishers of the games involved.

"The revenue mix of esports and sports is a key differentiator between the two markets," the report continues. "Esports, which is a product of a digital age, gets 34 per cent of its revenues from online advertising and still relies on the investment of game publishers. This money is indirectly recouped by the publishers through spending on or in their games. Now, esports is quickly evolving into a business of its own. Many sponsors are jumping on board and consumers are contributing to championship prize pools and paying to attend online or real-life events. As the esports market matures, its revenue mix will closer resemble that of traditional sports which saw 57 per cent of revenues come from sponsorships and selling media rights in 2014.

"Total sports and esports revenues are currently miles apart. At the same time, the $124 billion sports industry is comparable to the total global games market which will reach $107 billion on 2017. Comparing all sports with gaming and esports with individual sports makes a fair comparison."

sport

Indeed, the estimated global sport-playing population is around 1.6 billion. The global gaming community is around 1.7 billion - around 89 million of which consider themselves esports enthusiasts. That's comparable to the 79 million who would regularly watch swimming, or the 94 million who watch ice hockey. Newzoo expects the number of esports fans to grow to 145 million by 2017, close enough to the American Football audience of 151 to bear comparison.

However, esports fans don't generate revenue at the same level as people who watch the NFL or the EPL. Currently, it's estimated that they will directly contribute just $2.2 a year each, compared to the $20 a year which a sport could expect from its fans. Nonetheless, that still adds up to significant revenue gains if Newzoo's lower end growth estimates are met.

billion

Recent growth in esports has largely been driven by the west - which means that the growth could be extremely rapid if it hits critical cultural mass in Europe and North America. Potentially, that could see even faster acceleration as it attracts brands and sponsorship looking to reach the extremely valuable marketing demographic which esports seems to attract.

For the free preview of the report see here. The full, 68 page document is available now from Newzoo.

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