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| Playable media & games market research

ESPORTS
THE MARKET BRIEF
2015

Photo: Helena Kristiansson, ESL

| Playable media & games market research

Executive summary
Korea and China continue to dominate $612M

global eSports market. The ongoing investment


in N. America and Europe by digital-only
publishers drives overall growth and audience
expansion.

The global eSports audience is 134 million

strong, and growing. Investment in innovative

business models, platforms and derivative


businesses further spurs growth in competitive
gaming.
Competitive gaming is a marketing strategy,

not a revenue driver. In addition to traditional


marketing efforts, organizing events and
streaming content improves awareness and
retention.

Thirteen percent (13%) of live-stream viewers

watch eSports. Almost half of eSports viewers


in the U.S. use Twitch.tv, the worlds largest
live streaming site for game content. Roughly
the same amount of eSports viewers
participate in some type of competitive
gaming, mostly through online platforms.

Corporate sponsorships total $111 million in

North America (2015E). Brand owners and

advertisers are expected to adapt to emergent


forms of entertainment, which will grow
sponsorship deals across the segment.
Following the lead of early movers, we
anticipate an increase in ad spending by
consumer packaged goods, automotive and
technology brands.

eSports Market Brief, May 2015 | Copyright 2015 SuperData Research. All rights reserved. | www.superdataresearch.com

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Note from the analyst


Competitive gaming is a spectacular phenomenon that is changing game
publishing. Valued at $621 million, most of the worldwide revenues today
come from advertisers and corporate sponsors. But eSports also offers
publishers an opportunity to expand the touchpoints around their games
and give fans news way to engage with their favorite characters and enter
into a deeper experience.

eSports is something that we have not seen before.


In many ways competitive gaming seems, at least at first glance, to
resemble traditional sports. But to think that a new phenomenon like
eSports can be described in terms of the old is to misunderstand it
entirely. The intersection of technology, fandom and interactive
entertainment is presenting us with new ways of sharing experiences on a
global scale. And with 134 million eSports enthusiasts worldwide, this is
no longer a niche activity, but a shift in the way people consume games.
In this report we map out the industrys fundamentals, identify key value
chain participants and take a look at the shape of things to come.
joost@superdataresearch.com

eSports Market Brief, May 2015 | Copyright 2015 SuperData Research. All rights reserved. | www.superdataresearch.com

| Playable media & games market research

Korea and China continue to dominate $612M global eSports market

The ongoing investment in N. America and Europe by digital-only publishers drives overall growth and audience expansion.

Worldwide market for eSports by region, 2015E

Total worldwide market for


eSports, 2015E

Europe

$72

N. America

$143

million

million

Asia

$374
million

Rest of World

$24

million

$612M
Asia still leads the global
eSports market with $374
million in annual revenues
(61%). In the coming year,
we expect to see the
fruits of the continued
investment in North
America, Western and
Eastern Europe by game
companies like Riot
Games and Wargaming.

eSports Market Brief, May 2015 | Copyright 2015 SuperData Research. All rights reserved. | www.superdataresearch.com

| Playable media & games market research

The global eSports audience is 134 million strong, and growing

Investment in innovative business models, platforms and derivative businesses further spurs growth in competitive gaming.

eSports value chain participants


PARTICIPANTS

PUBLISHERS
TEAMS
LEAGUES
PLATFORMS
BRANDS

DESCRIPTION

EXAMPLES

The various games in which competitive gamers compete, ranging from shooters Titles: League of Legends, (Riot Games), World of
to multi-player online battle arena.
Tanks (Wargaming), SMITE (Hi-Rez Studios), Call of
Duty (Activision Blizzard), DotA 2 (Valve).
Professional teams that compete in tournaments. Members practice up to 8
hours a day and receive earnings through endorsement deals or by becoming a
professional for a particular game.

Teams: NewBee, Evil Genuises, Natus Vincere,

Organizers: Host both off- and online competitions, and generate revenue

Organizers: Major League Gaming, ESL (Turtle

Invictus Gaming, Fnatic.

through corporate sponsorship, membership fees, merchandise and ticket sales. Entertainment).

eSports Betting: Facilitate real-money betting on the outcome of eSports events. eSports betting: Alphadraft, Vulcan
Channels: Facilitate the (live) broadcast of competitions and pro-player videos.

Examples: Twitch (Amazon), Azubu, YouTube.


Tournament infrastructure: Offer necessary platforms to host both amateur and
professional tournaments.
Brand holders and advertisers that pay teams, league organizers and publishers
in exchange for displaying their logos, products, or naming a competition.

AUDIENCE

Channels: Twitch (Amazon), Azubu, YouTube,


MobCrush, Hitbox.

2015E

134,287,236
eSports viewers
worldwide

Infrastructure: Xfire, Battlefy


Consumer Packaged Goods: Coca-Cola, Red Bull
Automotive: Nissan, Volkswagen
Technology: Razr, Intel, NVIDIA
Consumer Electronics: Logitech, Samsung, HTC

The combination of competitive gamings rising popularity and recent acquisitions has triggered investments across scalable market
segments. The current market for eSports knows a wide variety of participants that each bring their own specialization. As the overall
business model begins to solidify, the market will see more vertical integration and consolidation.

eSports Market Brief, May 2015 | Copyright 2015 SuperData Research. All rights reserved. | www.superdataresearch.com

PUBLISHERS
TEAMS
LEAGUES
PLATFORMS
BRANDS
AUDIENCE

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Competitive gaming is a marketing strategy, not a revenue driver

In addition to traditional marketing efforts, organizing events and streaming content improves awareness and retention.

We lose a lot of money on eSports. It's something, currently, that we do to drive


return or profitability if we bring value to our players, they'll reward us with
engagement.

Marc Merrill, Co-Founder and President of Riot Games

Most viewed genres by preference (US)


Other

14%
MOBAs

16%

FirstPerson
Shooters

52%

Sports

18%

Top viewed franchises in eSports (US)


Call of Duty
League of Legends
Halo
Madden
Battlefield
Warcraft
NBA
FIFA
Counter Strike
Starcraft

FPS and Sports games are growing as eSports thanks to Western audiences.
While real-time strategy (RTS) and multiplayer online battle arena (MOBA) games
dominate eSports worldwide, new genres are emerging with changing demographics. In
the US, only 5% of viewers follow RTS games while more than half follow first-person
shooters (FPS). Call of Duty, which began hosting official tournaments in 2013, is
currently the most popular franchise among American eSports viewers.

9%
8%
8%
7%
6%
5%
5%
4%
3%

28%

Riot has invested over $10 million in prize pools in just


two years. Operating at a loss, publishers like Riot and
Activision Blizzard have continued to host costly tournaments
and devote large resources develop eSports. Their continued
support for competitive gaming has elevated the industry and
helped sustain interest in their games.

eSports Market Brief, May 2015 | Copyright 2015 SuperData Research. All rights reserved. | www.superdataresearch.com

PUBLISHERS
TEAMS
LEAGUES
PLATFORMS

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Publishers invest in competitive gaming for long-term retention


Offering an expanded user experience that crosses into both digital and physical improves the bottom line.

BRANDS
AUDIENCE

Last year, fans of Dota 2, a popular


multiplayer online battle arena game, added
$9,331,105 to its annual championships
base prize pool of $1.6 million.
Going beyond the mere development of a
game, companies like Valve have made a
substantial investment in hosting tournaments
to expand the user experience. This has
allowed both its monthly active user base to
grow, and fans to reciprocate by enlarging the
championship prize pool, thereby further
feeding the games exposure and marketing
buzz.

Monthly active
PRIZE POOL user base at time
of tournament
2012
2013
2014

$1,600,000
$2,874,407
$10,931,103

751,758
6,218,943
9,640,848

For the 2015 championship, fans have already


contributed 23% more than they did at this
point last year.

eSports Market Brief, May 2015 | Copyright 2015 SuperData Research. All rights reserved. | www.superdataresearch.com

PUBLISHERS
TEAMS
LEAGUES
PLATFORMS

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Teams and players build massive audiences, and earnings follow


Individual players with a large fan base earn more from endorsements than top performers do from prize money.

BRANDS

While top players can earn millions in prizes, only 40% of professional players make a
living off of gaming. Since prize pools only go to a small portion of teams, most players

AUDIENCE

earn a modest salary ranging from $12,000 to $40,000 a year. Players are required to
practice eight hours a day, but can drill up to 16 hours a day before a major event. Low
salaries contribute to a high burnout rate, as many players quit to pursue other careers.

Top players world wide by prize earnings (millions)

One-third of US players
consider teams the most
important factor when
deciding which eSports
matches to watch.
Veteran teams like Evil
Geniuses and Fnatic have
become recognizable
brands, offering consistency
and longevity to viewers
and sponsors alike. Most
teams are supported by a
handful of endorsements;
however, corporations like
SK Telecom and Samsung
have assembled company
teams that receive funding
from a single sponsor.

Hao (Chen, Zhihao)


Banana (Jiao, Wang)
SanSheng (Wang, Zhaohui)
Mu (Zhang, Pan)
xiao8 (Zhang, Ning)
Puppey (Clement Ivanov)
Dendi (Danil Ishutin)
XBOCT (Oleksandr Dashkevych)
UNiVeRsE (Saahil Arora)
ppd (Peter Dager)

$1,194,357
$1,192,049
$1,186,074
$1,174,610
$1,146,794
$667,332
$606,839
$603,893
$586,149
$581,748

Top teams world wide by prize earnings (millions)


Newbee
Evil Geniuses
Natus Vincere
Invictus Gaming
Fnatic
SK Telecom T1
Vici Gaming
Samsung
Alliance
SK Gaming
Cloud 9

$4,189,076
$3,571,494
$3,002,033
$2,686,964
$2,615,720
$2,487,139
$2,181,955
$2,100,947
$1,931,063
$1,819,079

$5,525,714

Former professional
player Wei CaoMei
Han-Dong now earns
over $800,000 a year by
streaming.
Even as sponsorship deals
continue to grow, popular
players can earn more by
live-streaming their
gameplay. In 2014,
professional League of
Legends player Wei
CaoMei Han-Dong retired
from eSports and signed a
contract with ZhanQi TV to
stream 90 hours a month in
exchange for an annual
salary of 5 million RMB (over
$800,000 USD).

Earnings source: www.esportsearnings.com

eSports Market Brief, May 2015 | Copyright 2015 SuperData Research. All rights reserved. | www.superdataresearch.com

PUBLISHERS
TEAMS
LEAGUES
PLATFORMS
BRANDS
AUDIENCE

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Merchandising offers a valuable revenue stream for eSports teams


Apparel is proving particularly popular among eSports fans, including hoodies, T-shirts, hats and jackets.

Apparel purchased by eSports fans in Germany, France, the UK and the US,
organized by clothing size

$42.30
The average size of a transaction
on eSports merchandise across
key Western markets breaches
$40. Loyal fans support specific

teams and make regular purchases,


thereby providing teams a welcome
additional revenue stream. Topselling categories include apparel,
headphones, mice and mousepads.

Shown: Apparel sizes for clothing purchased by eSports enthusiasts in the United States, Germany,
France and the UK in January, 2015. Total sample size n=10,076. All currencies recalculated to USD.
eSports Market Brief, May 2015 | Copyright 2015 SuperData Research. All rights reserved. | www.superdataresearch.com

PUBLISHERS
TEAMS
LEAGUES
PLATFORMS
BRANDS
AUDIENCE

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After 15 years, pro eSports organizations break into the mainstream

Tournament organizers, broadcasters and leagues serve as industry advocates, playing a central role in eSports popularity.

Leagues organize and host a variety of competitive gaming events both on and
offline, broadcasting tournaments via online streaming. The ESL (Europe),
Major League Gaming (N. America) and the Korean eSports Association
(South Korea) all promote and organize eSports events in return for a
share of the marketing spend by brand holders and advertisers. In
addition, league organizations also generate revenue via merchandise and
ticket sales.

MLGs recently opened 14,000 square foot stadium in Columbus, Ohio.

$203M

Total advertising earnings


for Korean eSports
television broadcasters
Ongamenet and MBC Game
Advertising revenue represents
the bulk of income for television
cable companies (63%), in
addition to subscription fees
(29%), according to the Korea
eSports Association (2007). By
comparison IP-based television
earned only $4.3 million in the
same year.

eSports Market Brief, May 2015 | Copyright 2015 SuperData Research. All rights reserved. | www.superdataresearch.com

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PUBLISHERS
TEAMS
LEAGUES
PLATFORMS
BRANDS
AUDIENCE

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Live streaming provides eSports with a global audience

The introduction of live streaming has allowed the global eSports audience to expand more than eight-fold.

Thirteen percent (13%) of all live-stream viewers watch


eSports. Almost half of eSports viewers in the U.S. use

Twitch.tv, the worlds largest live-streaming site for game


content. Most spectators are active participants in the
eSports community: roughly half of eSports viewers
participate in some type of competitive gaming, mostly
online through platforms like MLGs GameBattles portal.

The games that are popular today [in


eSports] were designed to be fun to play,
and not necessarily fun to watch.
The decision to use live streaming and eSports as a
central component of a games marketing strategy
changes the design requirements. Broadcasting digital

video content live over the Internet, called live streaming,


has become so central to competitive gaming that titles
like SMITE have this functionality built into the game.

Most visited streaming sites among US


eSports viewers
Twitch.tv
36%

ESL.tv
6%
MLG.tv
7%

Dailymotion
13%

GamingLive.tv
12%

Hitbox.tv Azubu.tv
7%
9%

Ustream.tv
9%

TITLE

Online viewers during most


recent championship

SMITE
League of Legends
DotA2

2.9M
20M
27M

eSports Market Brief, May 2015 | Copyright 2015 SuperData Research. All rights reserved. | www.superdataresearch.com

11

PUBLISHERS
TEAMS
LEAGUES
PLATFORMS
BRANDS
AUDIENCE

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Brands fund the bulk of eSports revenue through sponsorships

Despite strong direct consumer monetization via merchandise and events, indirect revenues account for 81% of market.

Corporate sponsorships total $111 million in North


America (2015E). Brand owners and advertisers

Indirect and direct revenue generated from


eSports enthusiasts, 2015E: NORTH AMERICA

are expected to adapt to emergent forms of


entertainment, which will grow sponsorship deals INDIRECT (81%)
across the segment. Following the lead of early
movers, we anticipate an increase in ad spending
by consumer packaged goods, automotive and
Corporate
technology brands.
sponsorships*

In 2014 eSports fans of DoTA 2 contributed more


than two-thirds to the prize money for its annual
championship. The sale of merchandise both via

$111.1M

DIRECT (19%)

N. America

$143
million

eCommerce and at events generates $11 million


in the US this year. Ticket sales are the smallest
category of direct consumer revenue with $4.5
million.

Prize pool
contributions
$11.8
Merchandise
$11M
Ticket sales
$4.5M

* Corporate sponsorships calculated on a cash basis (rather than on a value basis) to


accurately reflect the total amount of sponsorship money currently flowing into the North
American eSports market. The total figure includes sponsorship deals, advertising on digital
channels like Twitch and YouTube, publisher-incurred marketing expenses and other forms of
eSports advertising. In assessing this number for the US market, SuperData spoke with
companies that are actively sponsoring eSports events.

eSports Market Brief, May 2015 | Copyright 2015 SuperData Research. All rights reserved. | www.superdataresearch.com

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PUBLISHERS
TEAMS
LEAGUES
PLATFORMS
BRANDS
AUDIENCE

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As prize pools grow, so too does the number of eSports viewers


Accessibility and continued investment in competitive gaming is beginning to shape a strong global audience.

Global VIEWING AUDIENCE for competitive


gaming (all channels) and PRIZE POOLS
As more people
watch eSports,

2015E

134

the stakes
get higher

million
2015E

$42

million
2010

2011

73K
ATTENDEES AT THE
2014 INTEL EXTREME
MASTERS FINALS

2012

2013

72%
PERCENT OF US
ESPORTS FANS WHO
ATTEND LIVE EVENTS

2014

2015E

per
year

NUMBER OF TIMES US LIVE


SPECTATORS ATTEND AN
ESPORTS EVENT

More than 12 million people attended live


events in the US and Western Europe in 2014. As
eSports crowds grow, events have begun
cropping up at conferences like PAX,
GamesCom and even ComiCon. In addition,
dedicated eSports venues, or arenas, have
been built in South Korea, China, England,
Ukraine, Sweden and the United States.

North America and Europe are nascent but fastgrowing markets. Since 2011, eSports have
been growing in the west exponentially. In
addition to live-streaming sites and online
console devices, organizations like Major
League Gaming in the US and the Electronic
Sports League in Europe have helped provide
the necessary infrastructure for the space to
thrive.

eSports Market Brief, May 2015 | Copyright 2015 SuperData Research. All rights reserved. | www.superdataresearch.com

13

PUBLISHERS
TEAMS
LEAGUES
PLATFORMS
BRANDS
AUDIENCE

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eSports fans spend $200 a month on games and hardware


The core audience that regularly watches competitive gaming consists of young, affluent men.

American eSports fans purchase three full games per


month. Viewers also spend more than half of their

monthly gaming budget on additional content and


peripheral devices like headphones and controllers. On
average, US viewers spend $125 a month on games
and in-app purchases and $58 on peripherals.

Audience profile
eSports viewer spend
by category (US)
Full games
In-game purchases
Peripheral devices

Over half of adult eSports viewers are younger than 35.

The novelty of online gaming has attracted younger


viewers, including teenagers that are more immersed in
online video content. However, as generations grow up
with video games, eSports will appeal slow bing to
appeal to an older demographic.

Only two of the top 200 grossing eSports players are


female. To address gender disparity, a growing number
of organizations like Blizzard and the International
eSports Federation have begun hosting women only
leagues to create a more welcoming environment for
female players and spectators.

32%

$200

Monthly spend
on games and
hardware

44%

24%

87%
male

13%

female

$76k 89%

AVERAGE HOUSEHOLD
INCOME

eSports Market Brief, May 2015 | Copyright 2015 SuperData Research. All rights reserved. | www.superdataresearch.com

VIEWERS WHO BUY AT LEAST


ONE GAME A MONTH

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About the Analysts


Joost van Dreunen is CEO and co-founder of SuperData Research.
As one of the first academics to study video games, Joost also has over fifteen
years of commercial research experience in interactive entertainment and
technology industries. Before receiving a doctorate from Columbia University on
the topic, Joost worked as an analyst on both the financial and consumer-side of
the games industry for a variety of research outfits. Anticipating the shift to digital
games early on, he founded SuperData in 2009.Joost is a recurrent speaker at
major industry events such as GDC, CES and Casual Connect, and is regularly
quoted in both industry publications and mainstream press.
In addition to his business adventures, Joost teaches at the NYU Game Center
and the Stern School of Business.
joost@superdataresearch.com

Senior Analyst, Consumer Insights

Research Associate

Stephanie Llamas

Carlos Sanmiguel

eSports Market Brief, May 2015 | Copyright 2015 SuperData Research. All rights reserved. | www.superdataresearch.com

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Company summary
SuperData provides relevant market data and insight on digital games and
playable media. Founded by veteran games industry researchers,
SuperData covers the market for free-to-play gaming, digital console,
mobile, PC downloadable, gaming video content and eSports.
Monthly analyses and industry reports using digital point-of-sale data.
Using digital point-of-sale data received from publishers, developers and
payment service providers, we base our analyses on the monthly spending
of 37 million paying digital gamers, worldwide.
Understand what people play, connect to and spend on. Our research combines
transaction-level data with qualitative consumer insight. Our leadership
team has experience spanning across major research firms, including NPD,
Nielsen, DFC Intelligence, Comscore, Experian, Jupiter and Forrester.
A next gen approach for next gen entertainment. Our customer base includes
legacy publishers (e.g. Activision/Blizzard, Ubisoft), digital-only publishers
(e.g. Nexon, Tencent, Wargaming), media companies (e.g. Google, CocaCola) and industry service providers (e.g. PayPal, Visa, GameStop).

eSports Market Brief, May 2015 | Copyright 2015 SuperData Research. All rights reserved. | www.superdataresearch.com

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Contact

CEO
Joost van Dreunen, Ph.D.
joost@superdataresearch.com

Senior Analyst, Consumer Insights


Stephanie Llamas
stephanie@superdataresearch.com
401 Park Ave South, 10th Floor
New York, NY 10016
+1 (646) 248 5240
www.superdataresearch.com
Twitter @_SuperData
eSports Market Brief, May 2015 | Copyright 2015 SuperData Research. All rights reserved. | www.superdataresearch.com

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