eSports market to hit $696 million this year - Report

The eSports market appears to be growing in fits and starts. Newzoo today released its annual Global eSports Market Report today, and the market research firm expects the eSports scene to see growth slow in 2017, followed by a period of more rapid expansion through 2020.

Newzoo said it expects to see the worldwide eSports economy hit $696 million in 2017, with that money coming from brands (sponsorship, advertising, media rights), consumer spending on tickets and merchandise, and investment from game publishers. That total is up 41.3% from Newzoo's $493 million estimate for 2016's total market, which it released last August. However, it marks a slowdown from eSports' previous year-over-year growth in both percentage and actual dollars. Newzoo's 2015 report put the eSports market at $250 million, meaning 2016 saw a jump of 97.2% and $243 million, compared to 2017's expected jump of 41.3% and $203 million. Things will apparently pick up a bit in 2018 and beyond, as Newzoo is expecting the global eSports market to reach $1.5 billion in annual revenue by 2020, an average annual increase of $268 million per year over its 2017 projection.

While the eSports audience will also grow over this period, it isn't expected to grow as fast as the dollars. Newzoo puts the 2017 eSports audience at 385 million, with 191 million of those being diehard fans and the remaining 194 million just occasional viewers. By 2020, Newzoo expects the eSports fanbase to grow a total of 50% to 286 million.

"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 said. "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."

Most of the money in the eSports scene right now comes from brands, with Newzoo expecting them to account for $516 million of this year's $696 million market. The biggest chunk of that is accounted for by sponsorships ($266 million), followed by advertising ($155 million) and media rights ($95 million). Consumer spending is expected to make up a relatively small $64 million of the market, while game publishers are projected to put $98 million behind eSports this year, mostly through partnership deals with external organizers.