Newzoo ups its esports revenue estimates for 2016

 

NewZooEsportsLatest-Aug2016

Newzoo has released its latest quarterly update of its assessment of the esports industry, the ‘Global Esports Market Report’.

Here are the key takeaways:-

  • Esports revenues for 2016 will grow toward $493 million in 2016, up 7% from the $463 million projected at the start of the year.
  • This puts esports revenue growth at a year-on-year growth of +51.7%
  • The slight increase in esports revenues is mainly due to a higher-than-anticipated investment by publishers and a faster uptake of the media rights business model within the esports economy

The report shows that esports revenues for 2016 will grow towards a projected $493 million in 2016. This is up a significant 7% from the $463 million projected at the beginning of the year.

This puts the year-on-year growth at a huge +51.7%. The new figures are the result of Newzoo’s continuous effort to quantify the impact of recent developments and investments and to integrate the latest actuals in its proprietary Global Esports Audience and Revenue model. Before publication, the new figures have been validated by key players in the industry, including teams, organisers, investors, publishers, and media platforms.

The increased involvement of game publishers has been a vital part of this boost in terms of increasing overall awareness and growing the audience. Publishers are looking to add an esports element to compete with other games and ensure maximum longevity of each title they release.

A case in point is the news from Konami that the esports element of Pro Evolution 2017 would be thoroughly enhanced; this is doubtless in a bid to match FIFA 17 for which EA announced a $1.3m prize pool for competitive gaming.

Publishers are also working more and more with third party tournament organisers, and this is a market which is growing considerably. Gfinity, a tournament organiser with an arena in London, has worked with the likes of Gillette and Konami for its PES tournament, and is hosting a Rainbow Six Siege competition featuring Jme and his team next week.

Newzoo estimates that by the end of 2016 publishers will have paid close to $100 million to organisers to help them set up a tournaments. It is this figure, which is higher than expected at the start of the year, that has contributed to the 7% increase in this quarterly report. Another factor is a faster uptake of the media rights business model within the esports economy, creating a shift from direct advertising income to media partnerships comparable to traditional sports.

It is revenues from brands however that are the key component of the esports economy, and will define the pace of growth going forward. The revenues generated by brands this year, consisting of advertising, sponsorship, and media rights, is expected to total $350 million.

This represents 71% of the esports economy, with the other 29% generated by consumers through merchandise and ticket sales, as well as publisher fees spent on organisers and other service providers.

The esports revenues expected in 2019 now stand at $1.1 billion. Betting on esports, which itself is growing at a fast rate, is not taken into account in these figures.