Why 2020 was a Good Year for Esports
Finally, 2020 is gone, but what will it be remembered for? Pandemic, lockdown, and hundreds of hours spent within the walls of the house: working, watching TV, and playing games. Yes, there were many games, and even more, hours spent streaming on Twitch.
Now, with all the statistics and numbers in hand, we can surely say that 2020 has become the best year for the esport industry.
In 2020, the global esports market was estimated at just over $950 million. According to some sources, its revenue may reach nearly $1.6 billion in 2023.
Most of this revenue comes from sponsorship and advertising while the rest comes from publisher fees, merchandise, and tickets, digital technology, and streaming. In terms of revenue, Asia and North America represent the two largest esports markets, with China alone accounting for nearly a fifth of the market.
According to the NewZoo report, the global esports economy will generate $1.1 billion in revenue in 2021, up 15.7% over the same period last year. Most of this revenue (74.8%) will come from sponsorship and media rights — $822.4 million, up 17.2% from the previous year.
Consumer spending on tickets and merchandise will total $ 121.7 million, with an additional $ 116.3 million coming from publisher investments in the esports venues via support for tournaments through partnerships or white label projects with professional tournament organizers.
In 2020, the global esports audience will reach 495 million people, of which 222.9 million are esports enthusiasts and another $272.2 million are «occasional» viewers.
The median income per esports enthusiast will be $4.94, up 2.8% from 2019. As the esports market develops, new monetization methods will be introduced and improved. Likewise, the number of local events and leagues will increase. The average income per fan is expected to grow to $5.27 by 2023.
Another rapidly growing trend is the mobile games market. In addition to the growing interest in traditional esports gaming in some markets including Vietnam, games like PUBG Mobile and Garena Free Fire have become very popular and have it's esports teams.
As such, emerging esports markets will have the highest CAGR (2018-2023). At the same time, regions such as Southeast Asia (+ 24.0% CAGR), Japan (+ 20.4%), and Latin America (+ 17.9%) will accelerate to close the gaps between themselves and the more developed eSports markets.
Brand building will be critical in the coming years, as the strongest will gain the most fans and thus gain the most influence in the business. New monetization methods, content formats, and competitors, as well as changes to content packages and broadcast rights, should shake up the esports business.
In 2020, China will remain the largest eSports market with $385.1 million in revenue. These revenues will grow at a CAGR (2018-2023) + 17.0% and will reach $540.0 million by 2023. Most of this revenue will come from sponsorships, which will grow from $187.1 million in 2019 to $222.4 million in 2020.
Digital goods will become the fastest-growing revenue stream by 2023, increasing from $7.1 million in 2020 to $17.2 million by 2023.
North America will be the second-largest region in terms of revenues with $ 252.5 million, followed by Western Europe to come in the third, most profitable region at $ 201.2 million in 2020.
China will have the largest esports audience in 2020 at $162.6 million, followed by North America with $57.2 million.That being said, some would argue that the above analysis is slightly unfair. After all, «esports» is not a standalone game, but countless games in various genres from MOBA to RTS. Furthermore, the audience can vary by discipline, as is the case with traditional sports. While Dota 2 is geared towards an Asian audience, CS:GO has a notable base in the EU.
However, one could easily argue that all of this only expands the potential common target market and the longevity of the phenomenon of esports.