THE EXPLOSIVE GROWTH OF ESPORTS AND WHY IT MATTERS TO EVERYONE
C A SUAL G AME S SEC T OR REP OR T 2016
CGA. CGA.
THE EXPLOSIVE GROWTH OF ESPORTS Rapid Growth in Revenues & Audience Continues Global Esports Audience Growth 2014-2019 +11.2%
OCCASIONAL VIEWERS
CAGR
ENTHUSIASTS
2014-2019
+11.2%
+13.3% YoY
YoY
114
111
90
MILLION
125 MILLION
MILLION
MILLION
115
165
131
180 MILLION
MILLION
MILLION
MILLION
2014
2015
2016
2019
Key Facts • The global esports audience was 226 million and the number of Esports Enthusiasts reached 115 million in 2015, a YoY growth of 27.7% • Global revenues in 2015 reached $325 million, a growth rate of 67.4%. North America accounted for $121 million of this. • In 2019, esports revenues will have surpassed $1 billion and the audience will have grown to 435 million worldwide. • Trends behind esports are redefining the DNA of future successful games and provide new opportunities for game companies big and small.
Source: Newzoo 2016 Global Esports Market Report
Esports Trends Are Redefining The DNA of Games The combination of increasingly sophisticated and immersive gaming experiences, streaming technologies and social media platforms is transforming the video games industry. The personal gaming experience is being supplemented or even replaced by a community experience, and moving from personal entertainment to spectator sport. This shift in consumer behavior is creating new and exciting opportunities all along the gaming value chain, from the way games are developed and commercialized to enabling gamers themselves to monetize content streamed via their own channels and to their own audiences. These underlying trends that are driving the growth of esports are redefining the DNA of games and digital media as a whole and accelerating the disruption of traditional media.
THE GROWTH OF ESPORTS
Six Trends Behind Esports Growth
BUSINESS 1. Games as a service 2. Cross-screen entertainment
TECHNOLOGY 3. Creator & live streaming tools 4. Video platforms & communities
CONSUMER 5. Creation & Involvement 6. Consumers entertain consumers
Esports Revenue Growth 2014-2019 | Global
+40.7%
MEDIA RIGHTS, MERCHANDISE & TICKETS, ONLINE ADVERTISING, BRAND PARTNERSHIPS, ADDITIONAL GAME PUBLISHER INVESTMENT
CAGR 2014-2019
+42.6% +67.4%
$1072 MILLION
YoY
YoY
$463 $194
$325
MILLION
MILLION
MILLION
2014
The coming year will see the Esports Economy grow to $463 million, a year-on-year growth of 43%. North America will strengthen its lead in terms of revenues with an anticipated $175 million generated in 2016. China and Korea together will represent 23% of global esports revenues, totaling $106 million in 2016.
2015
2016
2019
The market will continue to experience rapid growth, crossing the $1 billion mark in 2016.
Source: Newzoo 2016 Global Esports Market Report T H E G R O W T H O F E S P O R T S | CA S UA L G A M E S A S S O C I AT I O N   3
Average Spend Per Fan Grows
38%
Comparing esports and traditional sports makes sense to a certain extent. As the Esports Economy matures, draws more advertisers and increases its merchandise and ticketing revenues directly from consumers, the average annual revenue per fan will continue to rise toward that of traditional sports.
Of global revenues in 2016 come from North America with 23% from China & South Korea
This coming year, we anticipate $3.5 per fan, still almost five times lower than that of basketball ($15 per year) but up from $2.2 in 2014. Using a conservative scenario, we estimate the annual average spend per esports fan will reach around $6.0 by 2019.
44% Of the esports audience In 2016 comes from APAC
ESPORTS GROWTH Esports Revenues PerSCENARIOS: Enthusiast |REVENUE 2012-2020PER ESPORTS ENTHUSIAST Based on Annual Average Revenue per Enthusiast
$20
>$2Bn
The average annual revenue per fan of the NBA
$11
$15
TOTAL ESPORTS REVENUES
$1.0Bn
The average annual revenue per fan of basketball
2013 GLOBAL NUMBER OF ESPORTS ENTHUSIASTS
$3.5
$2.2
$0.46Bn
4
© 2016 Newzoo
90M
REPORT SCENARIO
>$1Bn
AVERAGE REVENUE PER ENTHUSIAST
2014
$6.0
$7.6
TOTAL ESPORTS REVENUES
$0.19Bn 2012
ALTERNATIVE OPTIMISTIC SCENARIO
2015
2016
131M
2017
2018
2019
2020
180M Source: Newzoo 2016 Global Esports Market Report
Source: Global Growth of Esports Report Premium | January 2016 | www.newzoo.com/esportsreport
NUMBER OF MAJOR EVENTS & TICKET 2% 4%REVENUES Split Per Region | 2015
NUMBER OF MAJOR EVENTS & TICKET 2% 4%REVENUES
8%
Split Per Region | 2015
NUMBER OF MAJOR EVENTS & TICKET 2% 4% REVENUES Split Per Region | 2015
NUMBER OF MAJOR EVENTS & TICKET 4% 2%REVENUES
8% 8%
Split Per Region | 2015
Events at the Heart of the Esports NUMBER OF MAJOR EVENTS & TICKET REVENUES 2% 4% Split Per Region | 2015
8% 8%
11%
8% 8%
THE GROWTH
112 37% 2%
OF 11% ESPORTS
112 37% 0%
events
0%
10% 5% 18% 11% NUMBER OF MAJOR EVENTS & TICKET REVENUES 4% Region | 2015 10% events 2% Number of Major Events & Ticket Revenues | Per 12% 11% 5% Split Per Region | 2015 8% 8% 18% 37% 11% 0% 10% 2% events 2% 4% 12%5% 11% 8% 8% 35% 18% 37% 11%0% ticket reve 10% events 2% E-EU 12% 2% 4% 11%NAM 35%W-EU 5% 8% 8% 18% 37% 11% ticket revenues events W-EU E-EU CHINA 12% 10% 11% NAM 8% 35% 5% 18% 36% 8% 11% 37% ticket revenues events W-EU E-EU CHINA S. KOR 12% 10% 11% NAM 18% 36% 8% 11% 35%W-EU ticket revenues events NAM E-EU CHINA S. KOREA RE 37% 12% 18% 11% 36% NAM W-EU E-EU CHINA S. KOREA REST APAC 12% 11% ticket ticket revenues major events 18% 36% revenues events NUMBER OF MAJOR EVENTS & TICKET REVENUES 2% 4% Split Per Region | 2015
NAM
18%
NAM NAM
NAM
W-EU
1120% 2% 37%
2% events
$21M $21M
12%
$21M
$21
$21M
112
12%
112
112
112
112
112
8% 8%
E-EU
W-EU
W-EU
CHINA
E-EU
W-EU
E-EU CHINA
S. KOREA
E-EU
CHINA
CHINA
S. KOREA
S. KOREA
36%
S. KOREA
REST APAC
REST APAC
LATAM
REST APAC
LATAM
LATAM
MEA
MEA
Source: Newzoo LATAM MEA2016 Global Esports Market Report
REST APAC
There were 112 major esports events in 2015 and they generated an estimated $20.6 million in ticket revenues. In terms of the number of events, North America dominated by hosting 37% of all events. This amounted to 42 events throughout 2015. Western Europe followed, hosting 18% of all events. MLG, ESL and Blizzard were the organizers behind the majority of North American events. Dota 2 and CS:GO are the most played games at tournaments. Once again, the biggest prize pool belongs to The International, which topped $18.4 million, with just $1.6 million coming from Valve. The Frankfurt Major, also Valve’s event, awarded Europe’s largest prize pool: $3 million.
$61.0M
Global Growth of Prize Money | 2005-2015
+70%
REVENUES
YoY
$36.0M 31%
SHARE MOBILE REVENUES
$19.8M
$3.6M
$4.4M
$6.1M
$6.4M
2005
2006
2007
2008
Source: Newzoo 2016 Global Esports Market Report
$3.5M
2009
$5.2M
2010
$9.7M
+3.1%
$13.1M REVENUES CAGR 2014-2018
2011
2012
2013
2014
2015
T H E G R O W T H O F E S P O R T S | CA S UA L G A M E S A S S O C I AT I O N 5
Reaching a Valuable Audience Age/Gender of Esports Enthusiasts | Global | 2015
50%
F51-65
Of Enthusiasts have a high income vs. 34% of the total online population
1%
F36-50
7%
M10-20
23%
F21-35
62%
16%
115
F10-20
7%
M51-65
of Enthusiasts participate in team sports vs. 47% of Occasional Viewers
MILLION
65%
M36-50
1%
11%
M21-35
38%
of Enthusiasts participate have a full-time job vs. 48% of the total online population
Source: Newzoo 2016 Global Esports Market Report
Spending on Mobile Games | Global | 2015 Esports entertains a young and desirable demographic with males aged 21-35 representing 38% of the Enthusiast audience. The majority of the audience has a full-time job and a higher average income.
56%
43% 39%
38% 26%
29%
27% 16% 12%
8% 3% 3%
Nothing ONLINE POPULATION
6
Minor Spenders
Average Spenders
OCCASIONAL VIEWERS
This group is also more likely to be spending big on mobile games with 8% of Enthusiasts classed as big spenders. Proof that the esports is a trend relevant to all segments of the games industry.
Big Spenders ESPORTS ENTHUSIASTS
Source: Newzoo Consumer Insights
Mobile Esports: China Leads Surge
THE GROWTH OF ESPORTS
China boasts both the largest esport audience and the largest mobile games market in the world. Perhaps unsurprisingly then, it has become a leader in the mobile esports or competitive gaming scene. Chinese game companies launched more than 30 competitive mobile titles last year and in December 2015, 24% of top 100 grossing mobile games on Chinese Android stores were esports games. Many mobile esports tournaments were organized throughout the year with millions participating both on and offline, making mobile esports the most discussed topic in Chinese game industry last year. The highest prize money so far was recorded as 1 million RMB ($150k) for the national champion of Tencent’s League of Kings. Top Android Esports Titles in China by Downloads | Dec 2015 Game Titles Happy Lord GunZ Dash League Of Kings Speed Up Wefire Quan Min Chao Shen Thunder Fighter Tian Tian Xuan Dou We Shoot King of Fight Long Craft You Long Ying Xiong
Genre Cards Casual (Parkour) MOBA Casual (Parkour) FPS MOBA FPS Action FPS Action Action Action
League of Kings holds #1 on Android’s Top Grossing Ranking.
1.3 million
Viewers of the final of Netease’s Fantasy Westward Journey 2 tournament.
Mobile Esports Games by Publisher | Android | Dec 2015
24% Other companies
42%
Tencent is the dominant esports publisher
Tencent
50%
of Top 100 Grossing mobile games on Android in Dec 2015 were esports titles
Netease
8%
Source: Newzoo/TalkingData China Mobile Games Market Monitor
T H E G R O W T H O F E S P O R T S | CA S UA L G A M E S A S S O C I AT I O N 7
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