Watching other people play video games could soon be a billion dollar industry
Could people enjoy watching video game competitions more than watching professional sports? Yes.
According to new research from Newzoo and Repucom, professional video gaming (named eSports for electronic sports) is growing at a record pace—with a projected global audience of over 335 million fans (145 million active fans and an additional 190 million casual fans) by 2017. In comparison, the NFL today has a global fan base of 151 million, including 100 million American fans.
The report shows that on a global scale, there are 2.2 billion sports fans that each generate an average of $56 per year. ESports fans currently generate an average of $2.2 per person per year, without game revenues taken into account. Newzoo’s current eSports revenue projections use a conservative $3.2 average revenue per fan figure for 2017. With growth mainly driven by a larger audience, global eSports revenues will still rise to $451 million in two years from now.
“This renders eSports comparable to a Top 10 sport, or globally renowned leagues like the NFL or Champions League,” Peter Warman, CEO of Newzoo, says. “If the average revenue per enthusiast grows faster and jumps to $7, eSports will be a billion dollar business by 2017 with even more growth potential going forward.”
As eSports continues to grow at a record pace, Warman believes it’s just a matter of time before big leagues like the NFL begin worrying about eSports as serious competition to sponsors.
“As the eSports market matures, its revenue mix will closer resemble that of traditional sports, which saw 57% of revenues come from sponsorships and selling media rights in 2014,” says Warman.
Big brands like Intel, Coca-Cola, American Express, Duracell, HTC, Nvidia, and Benq have already tapped into the eSports audience. And as this audience grows, more brands that sponsor traditional sports will be investing in eSports. Warman says a lot of these companies are already talking to his research firm about the best ways to connect with eSports fans.
“The nice thing about traditional sports is that it is so organized and completely geared towards brand exposure and advertising,” Warman says. “ESports as a whole is fragmented, global, and for the most part completely online. Big brands find it hard to fit their traditional sports sponsorship and advertising models onto eSports.”
Warman says brands will have to embrace consumer participation across all digital channels if they want to reap the benefits of the low entry that now exists.
One of the big differences between traditional sports leagues and eSports is the popularity of user-generated content via livestreams on Amazon-owned Twitch and YouTube videos.
“ESports, including the amateur competitive gaming scene, already generates more video content and viewing minutes than the NFL,” Warman says. “It is not the top eSports championships that are a threat to traditional sports like the NFL, but the larger trend of consumers watching each other play competitive games. The amount of content is endless, as consumers love to create and share experiences, as well as organize themselves in communities around this content.”