Esports Net Worth 2020: The Billion Dollar Opportunity of Esports

Last Update on March 20th, 2020

We’ve heard it and said it. The nascent esports industry is growing rapidly and it’s worth millions, in fact no, the esports industry is set to be valued in billions.

Esports companies, esports teams, and even esports players, are worth millions. The games played in esports tournaments are worth millions. Some argue the potential value of esports net worth could one day outstrip the value of some of the most popular traditional sports like football, basketball, and boxing.

For millennial generations and younger it’s natural to play, be a fan, and for those old enough its quite normal to gamble on esports. So, what is esports net worth, today and tomorrow? And how does that so far compare to other traditional sports? What too, will be the impact of the coronavirus on esports in 2020?

Billion Dollar Opportunity of Esports - TI9 Dota 2

© The International

A $1 billion valuation for 2020

Newzoo’s Global Esports Market Report 2019, published in February last year, estimated the revenue value of the esports market would reach $1.1 billion in 2019, up over 26% year-on-year. And, that the number of esports viewers will reach over 450 million, consisting of over 200 million esports “enthusiasts” and over 250 million “occasional” watchers. Newzoo estimated that at current growth rates, the esports market will generate $1.8 billion in revenue by 2022.

Newzoo has just published its 2020 report, confirming actual esports net worth in 2020 was $950.6 million. That’s just under 50 million off Newzoo’s prediction, and not too shabby at all.

For 2020, the market intelligence firm puts esports net worth at an estimated $1.1 billion giving the industry year-on-year growth of 15%. Of this, Newzoo expects around three-quarters of the esports industry’s value to come from media rights and sponsorship. The company also expects esports audiences to continue their growth, to 495 million with year-on-year growth of 11.7%.

The latest report also confirms that mobile esports is growing quickly, especially in markets like Southeast Asia, India, and Brazil.

Esports net worth $3 billion by 2022

A Goldman Sachs report from late 2018 estimated the esports market would reach a total value of $3 billion by 2022. It pointed to Fortnite’s first-year prize pool of $1 million and streamer Ninja’s $1 million valuation, as well as the $90 million deal Activision Blizzard signed with Twitch for Overwatch.

Fast forward to 2019 and Epic Games set a $30 million prize pool for the Fortnite World Cup alone. The Fortnite Solo’s winner, Kyle “Bugha” Geirsdorf, walked away from the Fortnite World Cup with $3 million in prize money, he was just 16 years old.

Bugha, winner of Fortnite World Cup

© Mike Stobe | Getty Images

Traditional Sports versus Esports

To contrast with traditional sports, KPMG’s Football Benchmark compares the earnings of football club FC Barcelona which alone reported record revenue of the equivalent of nearly $1 billion for the 2018/2019 season.

If esports reached a $5 billion industry in the next five years, it would still only be equivalent in value to the top 15 teams in the English Premier League. However, that’s no mean feat and esports is in a fast-growth phase, traditional sports markets, though growing, are not growing as fast.

There is also the added problem for traditional sports that viewers, especially younger ones, are exiting towards esports. A survey of young Americans found 75% of 21-35-year olds said esports took them away from traditional sports patronage.

It’s all going the right way for fast-paced and fast-growing esports

Another player, Johan Sundstein (NTtail), has earned $7 million playing Dota 2. Cloud9 became the most valuable esports team in 2018, reaching a $310 million valuation according to CNBC and Forbes. Forbes also said at the time that nine esports teams had exceeded a valuation of $100 million each. In comparison, the highest value traditional sports team is the NFL’s Dallas Cowboys worth $5 billion, but in fairness, the team was established 59 years ago.

For game developers, owners, and their parent companies, China’s Tencent topped the revenue charts with 2018 earnings of $8.3 billion in 2019. Activision Blizzard, with Overwatch as its best-selling game, generated $3.5 billion in revenue in 2018 but then a massive $6.49 in revenue during 2019.

Activision Blizzard certainly wasn’t worried about the esports market’s long-term prospects. It invested $50 million into esports in 2018 and considers the real return on this investment could take up to 10 years.

Opportunities and challenges for esports net worth in 2020 and beyond

We’re updating this article from one published in 2019. As the esports industry matures new opportunities and spin-off revenue generators are appearing.

In the past few months, Astralis Group became the first esports team to publicly list and sell its shares on the stock markets. As we moved into 2020 the opportunity of esports stocks was realised by many. It’s now possible for investors to hedge their bets buying shares in esports teams and companies as well as game publishers. Legendary stock market investors like George Soros aren’t missing out on the esports opportunity either, he put $45 million into Activision Blizzard stocks in 2019.

Astralis Anounced first team IPO

© Astralis Group

Players and fans can take a different kind of gamble on esports too. Online bookmakers are increasingly offering esports bets. There are also many fantasy leagues. And, blockchain technology and cryptocurrencies are offering a secure and transparent integration of digital assets, gaming, and betting. These companies and gambling companies are all looking to engage Millennials and Generation Z.

At the time of writing, the tragic and troubling impact of the coronavirus is being felt around the world. Traditional sporting events, leagues and tournaments have been canceled in the US, Europe and elsewhere.

Physical esports tournaments have been canceled too but as esports began online the industry can potentially revert back to its routes to protect against losses and continue to entertain players and fans alike. What also could happen is that traditional sports fans look to online esports matches as an alternative to their usual sporting fix.

In fact, as countries and fans isolate and quarantine, they are turning to video games and streamers for entertainment. Revenue from live events may fall but the online opportunity for the esports industry and its sponsors is still immense.

Esports organization Gen.G, as per The Washington Post, has seen an 18% increase in Chinese viewers in the past two months. The CS:GO ESL Pro League this March saw a 27% increase in viewers versus last year. And, game platform steam reached an all-time high number of gamers on March 15 with 20 million users online and 6.2 million in-game. Sensor Tower is also reporting massive growth in the number of Twitch application downloads in Europe.

2020 is going to be a difficult year for everyone, the stock markets are tumbling, and traditional sports are on hold. Online esports and gaming is offering safe entertainment to fans stuck at home right now.