The competitive video gaming industry’s ad business is thriving.
U.S. online ad revenue for e-sports, including sponsorships, is expected to grow 25% to a record $178.1 million this year, research firm eMarketer said Thursday.
That money will come from digital ads, but does not include ad or sponsorship revenue collected by traditional television, which broadcasts a number of major tournaments.
“E-sports was once an under-the-radar activity for enthusiasts of multiplayer online games,” eMarketer principal analyst Paul Verna said in a statement. “Just a few years later, it’s a multimillion-dollar business in the U.S., with implications for game developers, players, leagues, teams, live venues, streaming platforms, TV networks, audiences and marketers.”
E-sports has exploded in popularity with the rise of now major players like the Overwatch League, run by Activision-Blizzard, and the NBA 2K League, run by game publisher Take-Two Interactive and the NBA. In addition to ads and sponsorships, e-sports generates revenue from media rights deals, ticket sales, and merchandising.
The digital ad component is expected to pass the $200 million mark in 2020, a 20% gain from 2019.
In another sign of growth, the number of online viewers of e-sports is expected to increase significantly. The audience, who watch on sites like YouTube and Twitch at least once a month, will grow 18.1% in 2019 to 30.3 million, according to eMarketer.
By 2023, viewership will grow 50% to 46.2 million, eMarketer added.