Esports Market Size, Share & Trends Report

Esports Market Size, Share & Trends Analysis Report By Revenue Source (Sponsorship, Advertising, Merchandise & Tickets, Media Rights), By Region, And Segment Forecasts, 2020 - 2027

  • Published Date: Jun, 2020
  • Base Year for Estimate: 2019
  • Report ID: GVR-4-68038-647-9
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2018
  • Number of Pages: 118

Report Overview

The global esports market size was valued at USD 1.1 billion in 2019 and is expected to expand at a compound annual growth rate (CAGR) of 24.4% from 2020 to 2027. The increasing audience reach and engagement activities, formidable investments, rising live streaming of games, and increasing infrastructure for the league tournaments are key factors driving the market growth. The professionalization in the industry has created lucrative opportunities for game developers, gamers, influencers, and event organizers. Millennials are considering esports as a professional career owing to the increase in popularity of the gaming tournaments, impressive international prize pools, streaming revenues, and one-to-one sponsorships. Moreover, universities and colleges are starting a dedicated esports curriculum to develop skilled professionals.

U.S. Esports market size

Virginia's Shenandoah University, Becker College in Massachusetts, and Ohio State University have started the esports degree course. In the U.S., more than 100 high schools have started esports programs alongside traditional soccer and other games. Apart from offering sports programs, academic institutions are also offering scholarships to players to boost growth. The University of California Irvine offers scholarships to the top six players.

Limited tournament infrastructure and less number of organizations have restricted the market growth. Such limitations resulted in fewer revenue streams for players and team owners in the past few years. However, in 2017, Riot Games created the League of Legends for North America and Europe region, giving a structured format to the tournament. Later, in 2018, Activision Blizzard, Inc. launched overwatch league, creating requisite infrastructure and monetization of the esports tournaments. Thus, the league model in the tournaments has created various revenue streams for the esports ecosystem, boosting the overall market growth.

The changing gaming landscape has further fueled market growth. Fortnite, Dota2, Counterstrike: Global Offensive and Overwatch, and League of Legends are the pillars of the gaming industry. The video gaming industry is changing rapidly from being a casual hobby to a professional career opportunity. Immense esports tournaments engage millions of fans watching in fixation, the same way as in conventional sports. As a result, these tournaments are attracting sponsors and investments from international brands to celebrities resulting in overcrowded stadiums and live streaming.

Increasing investments in the past two years are creating new growth avenues. Investments in this industry have made significant strides in recent years as the ecosystem offers diverse investment opportunities across a range of subsectors. The investment is mainly driven by traditional venture capital firms, followed by private equity, and strategic investors. In 2018, the market witnessed the impressive investments of over USD 4.5 billion, which was twice the investment in 2017. The investments are likely to increase with more franchise-style leagues, the continued growth of the audiences, and growing esports traction. The rising level of interest by various investors indicates the steady growth of the market over the forecast period.

The free-to-play gaming model has proven successful with significant in-game microtransactions driving the companies’ revenue, thereby boosting the industry growth. The games in this model have no upfront costs, but it charges for additional or featured content, which makes the game interesting. This microtransaction has a significant impact on the gaming industry, resulting in driving the overall revenue of the market. Fortnite, League of Legends, and Counter-Strike: Global Offensive are few games that feature microtransactions. Thus, the free-to-play game model helps to grow the overall gamer pool, bringing young gamers into the esports ecosystem and promoting diversity amongst the gaming population.

Revenue Source Insights

The sponsorship segment dominated the global esports revenue, with a market share of 39.9% in 2019. Sponsorship offers a sizeable opportunity for various brands to directly reach to the target audience through offline and online media channels. Booths, posters, interactive advertising, video displays, freebies, and many other creative methods facilitate the brand to target millions of fans. Many endemic brands such as Intel Corporation and Nvidia Corporation have already well-established sponsorship deals with esports teams and leagues. These deals have proven to be a great investment as they are able to increase their market share and brand recognition by selling gaming related products.

Additionally, the industry has seen an up stick from non-endemic brands such as Volkswagen Group, Daimler AG (Mercedes Benz), McDonald's Corporation, Tinder, and Vivo Communication Technology Co. Ltd. as a key sponsor for the esports tournaments and teams. There have been nearly 76 deals by non-endemic brands for Q1 2019, which includes prominent brands such as The Coca-Cola Company; AT&T Inc.; Nissan Motor Co., Ltd.; and Nike, Inc.

The media rights segment is one of the substantial revenue-generating streams and is estimated to expand at the highest CAGR of over 25.5% over the forecast period. Media rights include all the revenues paid to event organizers, teams, and leagues in order to secure the rights to broadcast esports content on a channel. esports consists of more than thousands of individual leagues, events, and championships for which the media rights deal is expected to generate a substantial amount of revenue in the coming years. Twitch is one of the prominent streaming platforms used by fans to watch major tournaments.

Global Esports market share

Recently, Twitch announced that in a single month of December 2019, 1.18 million viewers spent nearly 880 million hours watching videogames and other sports content. In 2018, Twitch signed a two-year deal worth USD 90 million with the Overwatch League for the exclusive digital broadcasting rights in English, French, and Korean. This was one of the biggest deals in esports history, accumulating 85 million hours watched. Tech giant Google LLC also entered the esports media rights business by announcing the multi-year partnership with Activision Blizzard, Inc. to broadcast esports league on YouTube. These M&A activities show media rights trend is expected to elevate at a larger scale over the next few years.

Regional Insights

North America captured the largest revenue share of over 39% in 2019 with the U.S. at the forefront. The region has consistently dominated the market for decades, with PC gaming serving a more niche group of consumers. With the franchised North America League of Legends Championship Series (NA LCS) and Overwatch League, investment and growth are expected to continue in the coming years. esports is a multimillion-dollar business in the U.S. with the involvement of the game developers, players, leagues, TV networks, and streaming platforms. North America Scholastic esports Federation (NASEF) is working on the development of the ecosystem by arranging students’ tournaments, helping high schools to set up esports clubs, and provide coaching and mentorship. Recently, in 2019, NASEF formed a strategic partnership with Japan High School esports Federation (JHSEF) to work together on the development and promotion of esports as an educational platform in Japan and the U.S.

Asia Pacific is expected to dominate the market over the forecast period. The growing penetration of mobile gaming and internet usage in the region has accelerated the growth of esports. In 2003, China declared esports as an official sport, and after 13 years, it was declared as a national industry providing esports operators and professionals’ jobs in the country. South Korea is also a renowned country for esports space, providing conventional infrastructure to gamers, including their gaming-house, coaches, cooks, and analysts. Recently, in 2019, South Korean telecom operator SK Telecom Co., Ltd. partnered with Comcast Corporation to form an esports company. Such developments and initiatives are expected to propel the industry growth over the forecast period.

Impact of COVID-19

The COVID-19 health crisis is impacting countless aspects of everyone’s day-to-day lives and is set to influence various business sectors. The industry is no exception with many tournaments and leagues been canceled, postponed, or altered as a result of the coronavirus spread. In some instances, the organizers are hosting the event in a closed stadium, streaming it online for the audiences. Amidst COVID-19, only 8% of live events are canceled, 26% have been postponed, 13% remains on schedule, and a sizeable 53% are shifted to the online platform. Under these circumstances, the industry is expected to witness modest growth in 2020. After 2020, the market is presumed to remain unchanged and witness steady growth.

For instance, the Pokémon Championship Series, Combo Breaker, EPICENTER Major 2020, and many other tournaments scheduled between March and May are canceled. As a result, the revenue from merchandise and ticket sales is expected to witness a downward trend in the first half of 2020. Several tournaments such as ESL One Rio 2020 Counter-Strike, California Overwatch League, ESL Americas Pro League, and others events have been postponed till the situation improves. As a result, even the slightest change is expected to be noticed in sponsorship and publisher fees. Nevertheless, most of the events have been shifted to online mode owing to the global quarantine and mandated lockdowns, which has led to higher viewership on streaming platforms.

Key Companies & Market Share Insights

The companies possess a notable history of creating intellectual games such as Call of Duty, World of Warcraft, StarCraft, FIFA, and Candy Crush Saga. The market is highly competitive in nature, and thus, is witnessing several M&A activities over the last few years. Tencent Holding Limited is gaining the upper hand in the esports industry by investing in several companies such as Riot Games, Inc.; Supercell Oy; Epic Games, Inc.; and Kakao Corp. Activision Blizzard, Inc. is at the forefront in creating organized esports leagues that attract professional players, broadcast partners, and advertisers. Overwatch League and Call of Duty League are the two most significant events organized every year by Activision Blizzard, Inc. Some of the prominent players in the esports market include:

  • Activision Blizzard, Inc.

  • Valve Corporation

  • Tencent Holding Limited

  • Electronic Arts Inc.

  • Gameloft SE

  • Nintendo of America Inc.

  • NVIDIA Corporation

Esports Market Report Scope

Report Attribute

Details

Market size value in 2020

USD 1.48 billion

Revenue forecast in 2027

USD 6.81 billion

Growth Rate

CAGR of 24.4% from 2020 to 2027

Base year for estimation

2019

Historical data

2016 - 2018

Forecast period

2020 - 2027

Quantitative units

Revenue in USD Million and CAGR from 2020 to 2027

Report coverage

Revenue forecast, company ranking, consumer behavior analysis, leading regional games, competitive landscape, growth factors, and trends

Segments covered

Revenue Source and Region

Regional scope

North America; Europe; Asia Pacific; Latin America; and MEA

Country scope

U.S.; Canada; U.K.; Germany; Spain; Poland; France; Italy; China; Japan; South Korea; Australia; Brazil; Mexico

Key companies profiled

Activision Blizzard, Inc.; Valve Corporation, Tencent Holding Limited, Modern Times Group (MTG), Electronic Arts Inc.

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Free report customization (equivalent up to 8 analysts working days) with purchase. Addition or alteration to country, regional & segment scope.

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Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global esports market report based on revenue source and region:

  • Revenue Source Outlook (Revenue, USD Million, 2016 - 2027)

    • Sponsorship

    • Advertising

    • Merchandise & Tickets

    • Publisher Fees

    • Media Rights

  • Regional Outlook (Revenue, USD Million, 2016 - 2027)

    • North America

      • The U.S.

      • Canada

    • Europe

      • Germany

      • The U.K.

      • Spain

      • Poland

      • France

      • Italy

    • Asia Pacific

      • China

      • Japan

      • South Korea

      • Australia

    • Latin America

      • Brazil 

      • Mexico

    • Middle East and Africa

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