A new report by Newzoo has given some interesting insight into how big esports has become in terms of revenue, revealing that esports revenues will reach $696 million USD this year, with the opportunity to reach $1.5 billion by 2020.
The 2017 Global Esports Market Report, as it's known, is the third edition of Newzoo's annual report on esports, and a free version can be accessed here. In the report, it's revealed that this esports economy growth the $696 million represents a 41.3% growth year on year, and brans are expected to spend $516 million. This is broken down into $155 million in advertising; $266 million on sponsorship; and $95 million on media rights. Consumer spending this year (like merchandise and tickets) will reach $64 million, and in terms of the future, brand investment looks set to more than double by 2020, hence the estimated figure of $1.5 billion.
Peter Warman, CEO of Newzoo, said: "Esports is not only growing exponentially as a new independent business and industry, it is also accelerating the convergence of various established industries. For brands, media, and entertainment companies, esports provides a chance to capitalize on the favorite pastime of digital natives and Millennials: playing games and watching game content. With the arrival of live streams and events, gaming has entered the realm of broadcasters and media that can now apply their advertising business model to a market previously out of reach for them."
The report also gives insight into audience, as esports will reach 385 million this year, broken down into 191 esports enthusiasts and 194 million occasional viewers, with the figure expected to grow another 50% by 2020 to 286 million. As of right now the revenue per fan is totalled at $3.64, but by 2020 it'll reach $5.20.
Newzoo also explained why betting isn't included: "Betting on esports is the hottest topic in the real-money gaming industry as betting companies see esports as a huge "blue ocean" opportunity. Betting on esports has been around for many years as it does not require the involvement of any esports companies to organise. Three years ago, a traditional betting company stated that esports was already its seventh-biggest sport worldwide in terms of betting volume, positioning it above golf and tennis for instance. Traditional sports market reports do not include betting or fantasy league business models, let alone sponsorships from these betting companies. The two industries are separate for obvious reasons. Moreover, sports betting is a far bigger business than sports media rights, sponsorship, and consumer revenues put together. As an example, the NFL generated $13 billion last year but betting and fantasy leagues around the NFL games are supposed to have made north of $50 billion. With most big betting companies already embracing esports betting on a global scale, it's possible that esports betting alone is larger than the esports economy itself."
Lastly, the report also revealed that North America is the largest esports market, with revenues of $257 million this year, again set to more than double to $607 million by 2020, with most of this coming from sponsorships.
Is esports set to stay around for a long time then?