Newzoo, the global leader in esports, games, and mobile intelligence, is today announcing the release of its 2018 Global Esports Market Report. This is the fourth edition of Newzoo’s annual report, which provides an in-depth look at the esports economy, globally and per region, and a realistic estimate of its future potential in terms of trends, viewers, franchises, and revenue streams. The high-level takeaways from the report have been made available in a complimentary version that you can download here.

In the coming year, the global Esports Economy will grow to $905.6 million, a year-on-year growth of 38%. The majority of this, 77%, will be generated directly (sponsorships and advertising) and indirectly (media rights and content licenses) through investments made by endemic and non-endemic brands that will spend $694 million, an impressive 48% increase since last year. This can be broken down into $174 million on advertising, $359 million on sponsorship, and a further $161 million on media rights and content licenses. Media rights will see the biggest jump year on year, up 72% since 2017. Consumer spending on tickets and merchandise will total $96 million, while another $116 million will be invested by game publishers into the esports industry through partnership deals with white-label organizers. You can learn more about the scope of our Esports Economy estimates at the end of this article.

The 114-page annual report announced today is part of our Global Esports Market Report service that includes quarterly trend and forecast updates and a granular audience and revenue forecast dashboard. The service is subscribed to by the majority of global games, media, and hardware companies, as well as esports teams, organizers, and sponsors.

Newzoo CEO Peter Warman: “As a consumer phenomenon, esports continues to grow its huge base of passionate fans across the globe. As a business, esports is now entering a new and critical phase toward maturity. Big investments have been made, new league structures have been launched, sponsorship budgets have moved from experimental to continuous, and international media rights trade is starting to heat up. At the same time, player salaries have soared and the esports ecosystem and viewership hours still very much rely on a select number of globally operating teams and game franchises. Profitability and return on investment is, for many organizations at the heart of the Esports Economy, a challenge.”

Global esports viewers will total 380 million this year

The global esports audience will reach 380 million this year, made up of 165 million Esports Enthusiasts and 215 million Occasional Viewers. Based on our audience and revenue expectations for 2018, the average revenue per Esports Enthusiast in 2018 will be $5.5, up 20% since 2017. As the esports industry matures and the number of local events, leagues, and media rights deals increases, we anticipate the average revenue per fan to grow to $6.6 by 2021. Our audience numbers are slightly lower than previously reported for two reasons. Firstly, an in-depth analysis of esports viewership among rural and urban populations in growth regions such as India, Southeast Asia, and the Middle East and Africa led to a minor downward correction. Secondly, the numbers now reflect only the viewers of professional esports content, leagues, and events. Previously, participants in amateur (online) competitions, such as ESL Play, Toornament, and FACEIT, were also part of the Esports Enthusiast group. However, a notable share of these active competitive gamers does not watch professional esports content. Due to the increasing importance of media and viewership in the esports industry, and hence a sharper focus on pure viewership numbers, this group is no longer included in our audience estimates.

The Future of Esports

An industry survey that we performed late last year found that the majority of respondents from teams expect esports to take another five to 10 years to mature fully as a business. The same research showed that brands and agencies expect the ecosystem to be fully professionalized in three to five years. This illustrates the current status of the market: great expectations from outside and more conservative views from people within. This year will be pivotal in determining the pace at which esports becomes the global multi-billion-dollar business we all envisage. Several key factors will influence the speed of its growth, including whether esports can engage new fans through new formats and franchises, the growth of mobile esports, the success of the franchising structure, and team profitability.

On its current trajectory, we estimate the esports industry will reach $1.4 billion by 2020. If any of these factors accelerate, a more optimistic scenario places revenues at $2.4 billion.