Esports for Dummies

Remember those books from back in the day? The big info books titled, “AOL for dummies,” or “the internet for dummies.” Fast forward to the present day, here we are in the year 2020, a new decade. Can you believe that it has been 20 years already since the turn of the millennium? Perhaps we need to base this article on a subject like eSports for dummies. There are many people who do not even know eSports exists. There are some people who know of it but do not have much information to go by. eSports is a form of sport competition using video games, organized multiplayer video game competitions between professional players at the highest level of play that it offers.

For those of you who love statistics, I have a small number to start off with. In the United States alone in 2018, there was an estimated 25.7 million viewers of eSports. That number is projected to grow and rise to an estimated 46 million viewers by the year 2023. It is no secret that the eSports industry has seen an explosion in popularity since 2015 and has grown tremendously each year since. Brands have increasingly invested heavily into eSports simply for the potential of reaching a large and engaged audience. Typically, brand deals went hand in hand with athletes for many years now and recently we have seen players and teams in eSports securing brand deals that were never thought possible before. Here is another set of numbers for all you statistic geeks out there. In 2018, there were 215 million occasional viewers and 165 million enthusiasts, for a total audience size of 380 million viewers. Newzoo predicts that by the year 2021, the annual growth rate will be 14 percent. With the number of casual viewers to grow to 307 million and the enthusiasts to grow to 250 million, for a total audience of 557 million. eSports awareness is on the rise and this contributes to the growth of viewership. In 2015, there were slightly more than 800,000 people who had heard about eSports. By 2017, that number had risen to 1.28 billion and in 2019, an estimated 1.57 billion people. This increased viewership and awareness means good news for brands as well, they have a new channel to target for marketing.

When brands realized the major potential of entering into the eSports market, their investments increased revenue in the industry naturally. There has been an average increase of revenue of more than 30 percent annually, with a large factor coming from brand contributions. In 2016, the total revenue of eSports was $493 million, of which $350 million came from brand investments. Fast forward to 2018, the industry made a total of $906 million in revenue, with $694 million coming from brand investments, both direct and indirect. This was a 48 percent increase of brand investment from the year prior. 

Newzoo predicts by 2021, eSports will generate more than $1.6 billion in total revenue with $1.3 billion coming from brand investments. Let’s quickly break the revenue down for the year 2018, 77 percent came from direct and in-direct investments. Direct investments include sponsorships and advertising. Indirect investments include media rights and content licenses. Sponsorships were the largest contribution at 40 percent of the total revenue. Advertising was next at 19 percent of the total revenue, media rights at 18 percent, game publisher fees at 13 percent and merchandising and tickets at 11 percent. The most interesting of this is media rights as a revenue source is growing the fastest, with an annual growth rate of 49.8 percent between 2016 and 2021. By 2021, it is predicted that revenue from media rights will more than double and become the second biggest contributor to eSports revenue. 

When you look at the prize money for certain eSports tournaments, you might be amazed as to the number it is. Take the Fortnite world cup for example, with the total prize pool being a whopping $30 million. Kyle “Bugha” Giersdorf, a 16 year old from right outside Philadelphia won the Fortnite world cup bringing home $3 million from the tournament. All these numbers and statistics shed light on the rapid growth and expansion of eSports and the possibility of tremendous growth in the future. It is very important for brands to start tapping into the market before it becomes saturated with brands trying to “cash in” on the eSports popularity. Even the average person could tap into the eSports market by sponsoring a team in a tournament or by buying an ad. Former Los Angeles Lakers player Rick Fox has owned a team in the successful and very popular eSport League of Legends and many others have invested heavily into different ventures of eSports as well. Rapper Drake and Scooter Braun both have invested heavily into the popular eSports org and team 100 Thieves which was started and owned by former Call of Duty eSports superstar Matthew “Nadeshot” Haag. The possibilities are endless and eSports keeps growing tremendously each year that passes. With the Overwatch League and now recently with the new Call of Duty league, 2 eSports giants that have changed the landscape of eSports by establishing teams based in different cities around the globe and using the model set by traditional sports teams have garnered major success.

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