After a banner year in 2016 the esports industry is projected to reach new heights in 2017, according to Newzoo’s annual Global Esports Market Report.

In its report released Tuesday, Newzoo, an esports, games and mobile intelligence agency, projects industry revenues to soar from from $492.7 million to $696.3 million - a growth of 41.2% per cent - while audiences are forecast to rise from 323 million viewers to 385 million. Half of the audience is made up of esports enthusiasts (191 million) while the other half is comprised of occasional viewers (194 million).

With a compound annual growth rate of 31.8 per cent, revenues are expected to hit $1.488 billion by 2020 with audiences growing to almost 600 million (CAGR of 15.4 per cent for enthusiasts and 17.2 per cent for occasional viewers).

“Esports is not only growing exponentially as a new independent business and industry, it is also accelerating the convergence of various established industries,” Newzoo CEO Peter Warman sais in a press release. “For brands, media, and entertainment companies, esports provides a chance to capitalize on the favorite pastime of digital natives and Millennials: playing games and watching game content. 

"With the arrival of live streams and events, gaming has entered the realm of broadcasters and media that can now apply their advertising business model to a market previously out of reach for them."

Brands are expected to contribute to the revenue stream through sponsorships ($266 million), advertising ($155 million) and media rights ($95 million) with the potential to double by 2020. 

Viewers also contribute to the industry through spending. Newzoo reports that the average enthusiast will spend $3.64 across all revenue streams and $0.33 for merchandise, tickets or subscriptions in 2017. The average spending per enthusiast is expected to rise to $5.20 by 2020.

The esports viewership demographic is a wide one, however the majority of viewers, both enthusiasts and occasional, are males between the ages of 21 and 35. The next largest demographic is males ages 10 to 20.

Another major talking point in 2016 was the rise in prize pools. Over $93 million was awarded last year and based on year-over-year stats the number should increase in 2017. Newzoo doesn’t have an official projection for the coming year, however prize pools have grown by $16 million (2013-2014), $25 million (2014-2015) and $32 million (2015-2016) in the last three years.

Esports brings together event hosts, broadcasters, endemic and non-endemic sponsors, advertisers and viewers to create an industry that is not expected to slow down any time soon.
 

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