The Esports Industry to Date | Newzoo

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The eSports Industry to DateThe Drivers Behind Current and Future Growth

Emily SouzaClient DirectorSan Francisco

9 SEPTEMBER 2015 | SAN FRANCISCO


Weekend of 22/23 AugustAnother Landmark Moment in Esports History


ESL ONE COLOGNECS:GO

LANXESS ARENA, COLOGNE

LCS EUROPE FINALSLEAGUE OF LEGENDS

HOVET ARENA, SWEDEN

LCS NORTH AMERICA FINALSLEAGUE OF LEGENDSMADISON SQUARE GARDEN, NYC

OGN MASTERSHEARTHSTONEYONGSAN ESPORTS STADIUM, SEOUL

>100THOUSANDATTENDEES

>50MILLIONVIEWERS



What’s Special?

$1.2M Per Player is more than the

2014 Soccer World Cup 3rd Place Prize

Money.

What’s Special?

$16M Was CrowdFunded by $2.50 of every $10.00 donation, making Valve $54M

$18MPrize Pool

$6MWinning Team

New Direct Esports-Related Revenue Streams


-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

700,000

800,000

900,000

1,000,000

Average Daily DotA 2 Players Average Weekly DotA 2 Players DotA2 Twitch Viewership

ORIGINAL ESPORTS DRIVER: GET PEOPLE PLAYING

SOURCE: GLOBAL GROWTH OF ESPORTS REPORT PREMIUM | Q3 2015 UPDATE


Sizing The Esports Economy Without inflating the potential amidst all the buzz 9 SEPTEMBER 2015 | SAN FRANCISCO

www.newzoo.com© 2015 Newzoo © 2015 Newzoo

NEWZOO

SAN FRANCISCO AMSTERDAM SHANGHAI

Emily SouzaClient Director

[email protected]

We are an innovative global market research and predictive analytics firm with a primary focus on games. We provide our clients with a

mix of market trends, financial analysis, revenue projections, consumer insights, data modelling solutions and predictive analytics

services across all continents, screens and business models. Newzoo works for the majority of top 25 public companies by game revenue

globally, many independent game developers as well as leading global hardware and media companies.

The Experts On All Things Games. THESE COMPANIES CURRENTLY SUBSCRIBE TO NEWZOO’S SERVICES

http://www.google.nl/url?sa=i&rct=j&q=microsoft+logo&source=images&cd=&cad=rja&docid=9T4Qaa2_scv4IM&tbnid=k40BnFUGuVJ_RM:&ved=0CAUQjRw&url=http://www.theverge.com/2012/8/23/3262517/microsoft-new-logo&ei=PTRcUb-3J5OR0QWvxIGgBQ&bvm=bv.44697112,d.d2k&psig=AFQjCNEVVFiVirVxFyrJ5hYc72o-Cceu2g&ust=1365083571732542

http://www.google.nl/url?sa=i&rct=j&q=microsoft+logo&source=images&cd=&cad=rja&docid=9T4Qaa2_scv4IM&tbnid=k40BnFUGuVJ_RM:&ved=0CAUQjRw&url=http://www.theverge.com/2012/8/23/3262517/microsoft-new-logo&ei=PTRcUb-3J5OR0QWvxIGgBQ&bvm=bv.44697112,d.d2k&psig=AFQjCNEVVFiVirVxFyrJ5hYc72o-Cceu2g&ust=1365083571732542

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http://www.google.nl/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=ELC17G8u5HQvBM&tbnid=cPguOFObixWHTM:&ved=0CAUQjRw&url=http://forum.alternativaplatform.com/&ei=3P07UrrNIe6T0QWV74D4DQ&bvm=bv.52434380,d.d2k&psig=AFQjCNEu9wkCaSJjHYIflSWpF0haOeX63Q&ust=1379749720551579

http://www.google.nl/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=ELC17G8u5HQvBM&tbnid=cPguOFObixWHTM:&ved=0CAUQjRw&url=http://forum.alternativaplatform.com/&ei=3P07UrrNIe6T0QWV74D4DQ&bvm=bv.52434380,d.d2k&psig=AFQjCNEu9wkCaSJjHYIflSWpF0haOeX63Q&ust=1379749720551579

http://www.google.nl/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=cdX_Lng3LULajM&tbnid=GC014_4b3NYOAM:&ved=0CAUQjRw&url=http://www.interactive.org/about/corporate_links.asp&ei=tk-LUuGJMOnE0QWghYCoCQ&bvm=bv.56643336,d.d2k&psig=AFQjCNGf030AamRnl3hWlgXU8JeKgryvKA&ust=1384948014615847


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http://www.google.nl/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=hpODAeC8Bv3i0M&tbnid=giwTIUg-K1rzaM:&ved=0CAUQjRw&url=http://www.3nter.nl/nieuws/turtle-beach-gaat-de-officiele-headsets-maken-voor-wii-u-en-3ds/&ei=D_WAUrSsOeqr0QWykYGYBQ&bvm=bv.56146854,d.Yms&psig=AFQjCNGYipKjciyAx6u5bBIzM4WjNArPdg&ust=1384269451700192

www.newzoo.com© 2015 Newzoo © 2015 Newzoo

SAN FRANCISCO AMSTERDAM SHANGHAI

Emily SouzaClient Director

[email protected]

We are an innovative global market research and predictive analytics firm with a primary focus on games. We provide our clients with a

mix of market trends, financial analysis, revenue projections, consumer insights, data modelling solutions and predictive analytics

services across all continents, screens and business models. Newzoo works for the majority of top 25 public companies by game revenue

globally, many independent game developers as well as leading global hardware and media companies.

The Experts On All Things Games. THESE COMPANIES CURRENTLY SUBSCRIBE TO NEWZOO’S SERVICES

NEWZOO










EVOLUTION OF THE ESPORTS TREND | 2013

“PC gamers have grown to expect a high quality game, with the ability to invest oneself long term, due to persistent profiles, online worlds, a way to play with friends etc. PC game developers have always understood that and delivered the type of experience that keeps gamers playing their games for month even years at a time.” - Donovan Duncan, VP Marketing, Curse Inc.



“As one of the fastest growing sports in the world, eSports only lacks exposure and deeper understanding. Newzoo has been significant help to eSports in that regard. Their reports have the shaped initial understanding of the market as their information is clear and allow deep insight in a rather unexplored business.” - Fabian Mallant, Manager Unicorns Of Love



“Publishers will want to take a strategic look at their video sharing infrastructure based on the convergence of games and video. The business opportunities are just beginning to emerge, but clearly this new surge in gaming creativity will demand tremendous scalability and innovative solutions.” - Anne Blanchard, Gaming Solutions, Limelight Networks,


The eSports Economy TodayCompanies, Audience, Revenues 9 SEPTEMBER 2015 | SAN FRANCISCO


THE ESPORTS ECONOMY

© 2015 Newzoo

e.g.

e.g.

e.g.

e.g.

e.g.

e.g.

© 2015 Newzoo




37% 34%GLOBAL

$252M+30% YoY

NAM

$93.2M+32% YoY

APAC

$85.2M+28% YoY

Revenues 2015 | Esports| Global, NAM , APAC

Esports Enthusiasts

147M70M25M17M

2014JAN-MAY

$7.9M

2015JAN-MAY

$15.7M

$36M+82% YoY

$71M+97% YoY

113M+27% YoY

2014

2015e

Occasional Viewers

Prize Money2014 vs 2015e | Esports | Global

Audience | 2015 | Esports | Global

(>once a month) (>once a month)

Source: Newzoo, The Global Growth of Esports: Trends, Revenues & Audience Towards 2017

29%

ESPORTS AUDIENCE AND REVENUES IN 2015

Of all eSports viewers

40%does not play

the games themselves

KEY FACT

Spectator Sport


53%Have a

full-time jobvs. 37% of the total population

30%Is in the high

income bracket vs. 22% of the total population

eSports Sponsors

30%Are

femalevs. 48% of all gamers

55%Is between 21

and 35 years oldvs. 33% of all gamers

HUGE GROWTH POTENTIAL FOR A VALUABLE AUDIENCE

ESPORTS ENTHUSIASTS ARE A VALUABLE TARGET GROUP IN TERMS OF DEMOGRAPHIC PROFILE & ARE BIG DIGITAL MEDIA SPENDERS

© 2015 Newzoo | Source: Global Growth of Esports Report Premium


Device used towatch online video

© 2014 Newzoo, Graph generated in and exported from the Newzoo Data Explorer

eSports EnthusiastsThat watch online video

Occasional ViewersThat watch online video

Total PopulationThat watch online video

10.1 Million 13.0 Million 120.7 Million

United States

34%of Esports enthusiasts use a tablet to

watch online video content versus 22% for the average American aged 10-65

OFFERING ENTERTAINMENT ACROSS ALL SCREENS


SNEAK PREVIEW ESPORTS QUARTERLY UPDATE

$252M$194M

$278M

$452M$520M

YoY GROWTH

+29.6%

YoY GROWTH

+43.4%

2014 2015e 2017e

2014-2018 CAGR

+38.9%

NEW

Q3UPDATE

NEW

Q3UPDATE

SOURCE: GLOBAL GROWTH OF ESPORTS REPORT PREMIUM | Q3 2015 UPDATE

Biggest Audience KPI Growth: Occasional Viewers Becoming True Esports Enthusiasts


2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e

$9.7M

$3.6M $4.4M $6.1M $6.4M$3.5M $5.2M

$13.1M

$19.8M

$36.0M

$71.0Me

+97%YoY

-48%YoY

2009: Korea’s Esports Scene Takes a Blow

Legislations in South Korea implementing bans and curfews on gaming, a feud between the Korean Esports Association and Blizzard, and the falling popularity of Starcraftcontributed to the dip in prize money in South Korea between 2008 and 2012. Since then, esports broadcaster MBC was discontinued and OnGameNet is a much smaller operation whose content is no longer broadcasted on TV ….

2014: US & China Lead

Source: Newzoo, The Global Growth of Esports: Trends, Revenues & Audience Towards 2017

Korea has never fully recovered, rendering the US today’s #1 in the accelerating esports market, with China close on its heels ....

IT IS EASY TO OVERESTIMATE THE MARKET ….

In 2007,MBC Game and OnGameNet

reportedly made $200M in esports revenues, mainly

through broadcast TV


Betting & Fantasy LeaguesWhere there is competition, there is betting… 9 SEPTEMBER 2015 | SAN FRANCISCO


ESPORTS BETTING ALREADY HOT

EXAMPLES OF START-UPS AND TRADITIONAL FORCES JUMPING ON THIS GROWING NICHE

© 2015 Newzoo

eSports is Pinnacle’s

7th Biggestmarket in terms of

volume, bigger thanGolf & Rugby


Eilers Research estimates:$250 million now


SPECIALIST STARTUPS ARISE: BETTING & FANTASY LEAGUES

Eilers Research estimates:$23 billion (!?) in 2020.


PLAYING FOR REAL MONEY IN ONLINE CASINO’S | US | 2015 BETTING/WAGERING ON REAL-TIME EVENTS (E.G. HORSE/SPORTS) | US | 2015


33% Of Esports Enthusiasts Already is Your Client, vs 15% for Gamers and 8% for All.

© 2015 Newzoo

GOOD NEWS: ESPORTS ENTHUSIASTS LIKE A BET


eSports Versus Sports Does it make sense to compare? 9 SEPTEMBER 2015 | SAN FRANCISCO


2.2Bn

1.7Bn

2.1Bn

SportsFans

Gamers

1.6Bn

Active inSports

2014 201720142014

89M

145M

94M

IceHockey

EsportsEnthusiasts

2014 20172014

151M

American Football

2014

AllSports

AllGamers

IndividualSports

EsportsEnthusiasts

vs. vs.

© 2

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SPORTS & GAMING AUDIENCES EQUAL

THE NUMBER OF GAMERS COMPARE WELL WITH SPORTS FANS, ESPORTS COMPARABLE IN SIZE AS INDIVIDUAL SPORTS



TOTAL ESPORTSREVENUES

Esports Growth ScenariosBased On Annual Revenue per Enthusiast

$1Bn

Report Scenario

AlternativeOptimisticScenario

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

$2$3

$2

$3

$5$7

$15

$1.1Bn

$0.5Bn

$1.0Bn

$3.0Bn

$56

$20

AllSports

IndividualSports

2014 Revenues/FanGlobal Revenues Divided by Fans

$2Esports

AVERAGE REVENUE PER ENTHUSIAST

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TOWARDS A $1BN ESPORTS ECONOMY

REVENUES PER ESPORTS FAN COMPARED TO THOSE OF SPORTS SHOWS POTENTIAL


© 2015 Newzoo


eSports Pace of GrowthOverarching trends push esports to maturity 9 SEPTEMBER 2015 | SAN FRANCISCO


SHARE

PRO PRO

PRO

CONSUMER GENERATED CONTENT & DIRECT

CONSUMER EARNINGS“POWER TO

THE PEOPLE”

ART/DESIGNMade by “professionals”

MOVIES/GAMESMade by “professionals”

ADVERTSING/MAILMade by “professionals”

Enabling Platforms & ToolsCurse, Twitch, YouTube Channels, Fundly, Instagram …

2015

© 2015 Newzoo

EXPERIENCE CREATE

ESPORTS FUELED BY HUGE CONSUMER TRENDS…

NEWZOO REPORTS“Power to the People” | “The Consumer As Producer”


… AND MANY FACTORS DETERMINE PACE OF GROWTH

More Genres & Geographic Depth

Competition Regulations& Content Rights

Alignment of Traditional& Digital Media


WHILE WE SORT THIS ALL OUT….

15TH OF JULY 2015

$20,000 PRIZE MONEY10TH OF AUGUST 2015

$26,000,000 IN FUNDING


FULL 68-PAGE REPORT AVAILABLE NOW. PREMIUM SERVICE INCLUDES QUARTERLY UPDATES. NEXT UPDATE: 15 SEPTEMBER

www.newzoo.com/esportsreport

Emily SouzaClient [email protected]

YOU CAN COUNT ON US TO KEEP TRACK.

The Esports Industry to Date | Newzoo

Data & Analytics

Transcript of The Esports Industry to Date | Newzoo