Esports Revenue Growth Driven by Audience Inspired Brand Investment
The esports industry is expected to be worth as much as $3 billion by 2022. The global esports audience is growing quickly, motivating more and more brand investment into esports. In 2018 sponsorship deals contributed 40% of global esports revenue and brand advertising 19%.
Newzoo puts esports average revenue growth at 30%. In 2016 esports revenue was $493 million, increasing to $655 million in 2017 and $906 million in 2018.
It’s almost certain that global esports market revenue will exceed $1 billion for 2019. As per figures collated by Influencer Marketing Hub, in 2017 brand investment in esports constituted $350 million and in 2018 this figure was $694 million. Marking a notable 48% increase in brand investment between 2017 and 2018.
The number of esports viewers is growing
Esports audiences grew by nearly 20% between 2016 and 2017 with casual viewers and serious enthusiasts the total esports audience reached 335 million. By 2018 the number of esports viewers had reached 380 million.
Newzoo expects audience growth rates to be 14% in the near future and that the total esports audience will reach 557 million by 2021. For streaming platform Twitch, the most popular for esports, the average number of concurrent viewers has risen from nearly 600,000 in 2016 to an estimated 1.28 million in 2019, as per TwitchTracker.
Another interesting metric, hours spent watch esports content, demonstrates esports popularity. In 2013, 2.4 billion hours were spent watching esports, by 2018 this figure reached 6.6 billion.
Broadening awareness of the esports industry, as well as its massive growth, is fuelling viewership. Statista puts the number of people who were aware of esports in 2015 at just 800,000, by 2017 this had risen to 1.28 billion, and in 2019 an estimated 1.57 billion people will be aware of esports.
Big brands see the potential of esports and its reach, and act upon it
Sponsorship deals and brand advertising made up 59% of esports global revenue in 2018. Newzoo predicts that esports revenue will reach $1.65 billion in 2021 with $1.39 billion in revenue coming from a combination of media rights, advertising, and sponsorship.
Brands, and not necessarily sporting or gaming related companies, have a new industry and channel to add into their marketing mix. This is particularly true for brands that hope to reach young, Millennial and Generation Z consumers. Without forgetting the increasingly growing marketing strategy such as in-game advertising.
Esports audiences and their time spent watching esports, whether that’s online or at tournaments, are growing rapidly and this can be at the expense of more traditional sports where viewership is levelling and even falling. Brands need to move with their consumers in order to reach them, sell to them, and convert them. Marketers even recommend that brands move now to the esports industry before it becomes too saturated.
Just one illustration of changing advertising habits as esports grows in popularity is the US Navy’s decision to halt Superbowl advertising in 2020. It is choosing instead to investigate further YouTube, esports, and digital advertising to reach potential new recruits.