Market research agency Ovum has predicted that the value of the global esports market will reach $1.9 billion in 2022.
This represents a compound annual growth rate (CAGR) of 20.7%, up from an estimated $733 million in 2017.
Ovum’s new report titled ‘Esports Revenue Forecast: 2017–22′ states that esports was worth less than $100 million in 2013, illustrating the pace of change in the market. It analyses trends presented by Ovum’s esports forecast data.
“A wealth of opportunities remain as the developing market, which has been described by at least one observer as a ‘Wild West’, looks for a business model and structure that benefits all parties,” Ovum said in a statement.
“The benefits of involvement – whether that be as broadcaster, streamer, infrastructure provider, tech platform, or simply a company eager to tap a youthful demographic with high discretionary spend – could be spectacular. Those looking to enter the fray need to understand where best to make a difference – and they should act quickly.”
Here’s a selection of data from the report:
Ovum’s 4 predictions
- Media rights will be fiercely contested. With such a desirable demographic at stake, expect multiple major TV and internet players to compete for rights to key tournaments and games
- Sponsorship revenue will lead the way, reaching $578m in 2022, to account for more than 30% of total revenue. Advertising revenue will be derived primarily via sponsorship of teams or tournaments, as brands clamor to carve out a niche in esports. But streaming ad revenue will grow at a faster rate, encouraged by concurrent viewership exceeding 10 million for the biggest events.
- Ticket sales revenue is set to soar at a 21.1% CAGR. Increased investment in infrastructure will lead to a rise in the number of arenas suitable for esports, while a steady pipeline of new games provides further opportunities. Consumer contribution to prize pots will rise sharply too but will remain small compared with games companies’ overall take from the likes of League of Legends.
- Mobile esports will drive revenue to 2022 and beyond if the industry grasps the opportunity. Games that require a simple smartphone rather than a fast PC could lead to exponential growth in esports player bases, leading to huge revenue opportunities in all aspects of the medium.
Ovum’s 4 recommendations
- Platform providers: Strive for exclusivity. Those seeking to stream or broadcast esports need to have unique, compelling content that will guarantee viewers – and advertisers. With rights beginning to be snapped up, companies need to understand current and new opportunities in terms of the esports gaming world.
- Tech companies: Platform providers will need you. Rights players will need intuitive end-to-end platforms to ensure frictionless access, faster servers to cope with the rapid rise in bandwidth requirements, and overlays such as betting options to complement their content. There is plenty of opportunity for those suitably equipped.
- Tech companies: Help scale and monetize spectators. While gameplay will require extremely robust, low-latency connectivity and servers, the greater opportunity for vendors will lie in supporting spectating, by providing rights holders with managed services to spin up live video coverage at scale; drive discovery and social engagement; and integrate payments, advertising, betting, and other monetization features.
- Mobile players: Be alert to opportunity. The owners of a smart mobile interface for esports – an app or other mechanism to make playing in tournaments as easy as poker is now – will be very well placed to benefit as smartphone games continue to lure sponsors, players, and prize money.
For more information or to acquire the full report, email Ovum managing editor Dom Tait