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Esports – The Rise to Primetime; A Primer on the Global #Esports Phenomenon $GMBL $ATVI $TTWO $GAME $ $TCEHF $ $

Posted by AGORACOM-JC at 10:04 AM on Wednesday, August 29th, 2018

Viewership growth  could see  esports  at  the  #2  spot,  behind  NFL,  by  2021.  In the  US,  esports viewership on  key  streaming platforms  like  Twitch,Youtube, and TV with TBS, ESPN, etc. already exceeds the NHL and is expected to  surpass the NBA by 2019 and MLB by 2021 to  take the #2 spot behind the NFL. For further contrast, the viewership of   the League of   Legends World Championship saw 60mm unique viewers in 2017,  vs  . the 2018 NBA Finals At 18mm and the 2017 MLB World Series at 28mm, and compared to  the 2017 NFL Super Bowl at 111mm.

The global esports audience is forecasted to reach 380mm in 2018 (+14% y/y), of which 165mm are esports enthusiasts (i.e., regularly watch professional esports), with the remainder being occasional viewers. By 2021, the global audience is expected to grow by nearly 50% to 560mm, representing a 14% CAGR, with enthusiasts growing faster than occasionals but still less than half of the total at 250mm. When considering top, long-standing global esports titles League of Legends, Counter-Strike: GO, or Dota 2, Newzoo observed that nearly half (42%) of viewers do not play the games they watch – an interesting statistic that points to the significant entertainment value with esports.

Valuable  millennial demographic.  Esports caters  to   a  predominantly  young  and  affluent  audience  that  are  digital-first and  largely  unreachable  via traditional media making them increasingly attractive to brands . Newzoo estimates that half of   eSport enthusiasts are aged between 21-35 with 71% being men. Over 60% of   esports enthusiasts have a full-time job and 50% belong to  households with a high household income. 53% are from APAC, with18% from EU, 14% from NA, and the remainder from RoW.

The largest esports tournaments attract multimillion dollar prize pools. With growing esports viewership, tournament prize pools have been setting new records every year. Dota 2’s “The International” tournament hosted by publisher Valve since 2011 set another record prize pool of $25.5mm for 2018 with the International 2018 held in Vancouver last week. Recently, Epic Games announced that it would fund $100mm in prize pools for the first year of Fortnite tournaments, which is nearly the total amount of prize money awarded in 2017, thus ensuring 2018 will be a new record.

Esports outlook strong but still <1% of global games market. Newzoo estimates the total global esports market to grow from $906mm in 2018 (+38% y/y) to $1.65bn in 2021 , representing a 27.4% CAGR. Compared to the broader global games market (PC, console, and mobile gaming), which is expected to grow from $140bn in 2018 (+13% y/y) to $180bn in 2021 representing an 11% CAGR, the addressable esports market will continue to account for <1% of the total global games market despite its large and growing audience. Note, Newzoo forecasts do not include revenue from esports-related betting, which is believed to be larger than the esports market itself.

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