The dramatic growth of eSports has continued strongly into 2016, and a number of moves show the sheer power of this transformative take on game play. So far in just the last few months we’ve seen both Activision and Electronic Arts create entire new divisions around eSports, and other traditional publishers like Ubisoft and TakeTwo embrace eSports as well. Newzoo’s latest eSports market report shows the revenues from eSports jumping to $463 million in 2016, a leap of 43 percent over 2015. That’s reaching an audience of 131 million enthusiasts with an additional 125 million occasional viewers. So, it’s easy to see why every game maker is interested in the idea of eSports and what it can do for them.
Though multiple companies are jumping into eSports or expanding efforts already under way, it’s not clear whether there’s room for everybody in this pool no matter how fast it’s expanding. The nature of the market growth, and how it maps onto a particular company’s games and marketing efforts, is extremely important. Newzoo identified five factors as being important to the growth of the eSports market, including a diversity of game genres, geographic expansion of leagues, regulation of competitions, ownership of media rights, and finally how digital and traditional media are aligned.
Right now the eSports market is dominated by League of Legends, which according to SuperData Research’s estimate realized over $1.6 billion in revenue last year. Other games like DotA 2, Hearthstone, Counter-Strike: Global Offensive and others are notching great viewership numbers as well.
It’s not just new games that are investing in eSports. Many of the top competitive games of years gone by, some of which had strong amateur competitive scenes or even a presence with professional organizations like Major League Gaming, are finding new ways to emphasize eSports. Microsoft is bringing its powerful Halo franchise back to its eSports roots with Halo 5 Guardians, where the gameplay has been returned to a much more eSport-friendly competivie balance – and Microsoft has added in a million-dollar professional tournament as well.
Capcom has taken its venerable Street Fighter franchise, a long-time favorite of competitive gamers, to a new eSports level with the release of Street Fighter V. The company is putting a lot of faith and marketing muscle into the belief that Street Fighter fans love to compete, and that they love to watch professional gamers take this fighting game to a whole new level of play.
Will the current market leaders remain in the top slots? How much room exists for new entrants to either expand the audience or to take share from existing games? It’s a high-stakes strategy game with hundreds of millions of dollars being wagered by the games industry’s biggest publishers, as well as new startups.
We spoke with some of the top games industry leaders and analysts about the unfolding eSports market and just what we can look forward to in 2016 and beyond as massive growth continues.
Ian Sharpe, CEO of Azubu:
How will the eSports landscape change this year and next?
eSports is hitting the mainstream. When a top German soccer club signs an Official Gamer, you know the boundaries between the real and virtual are breaking down.
Are new eSports likely to be a significant factor in the near future?
To truly become crowned as an eSport, a game needs to be designed as such – and embraced by the community as well-balanced and nuanced. But to truly persist, it helps to be an established brand and intellectual property. Big names are key to mass sales and adoption of games, so expect to see new takes on beloved old franchises seizing the day. Hearthstone is a good example of playing in the same universe in a different way.
Both EA and Activision have set up new divisions specifically for eSports. How do you see their efforts changing the eSports market?
See the answer above. Activision has a way to go to tackle CS:GO (and CrossFire in Asia) as king of the eSports shooters, and you can’t just co-opt a community. My old stomping ground, EA Sports, will doubtless be thinking about how you make FIFA truly, madly and deeply competitive – right now, competitive matches aren’t really fun to watch.
Joost van Dreunen, CEO, SuperData Research:
How will the eSports landscape change this year and next?
The eSports landscape is set to consolidate over the course of the next 18-24 months, as publishers seek to vertically integrate their competitive gaming efforts and retain control.
Are new eSports likely to be a significant factor in the near future? Or will the current leaders continue to dominate for the foreseeable future?
In 2015 around $579 million was spent on eSports sponsorships, worldwide. The biggest titles are obviously the ones that command the bulk of this. Specifically, companies like Activision and Riot Games leverage their scale and visibility to capitalize on the growing willingness of brands and advertisers to spend on competitive gaming. Second-tier games will likely get a much smaller piece of the advertising action, but still succeed in expanding their own presence and cultivate loyalty among their fans.
Why should marketers care about eSports?
Marketers should care about eSports because it currently has the gaming audience’s attention, allowing to reach a large number of people at relatively low cost. Moreover, this audience tends to be very tech-savvy and doesn’t adhere to traditional patterns of media consumption. Sponsoring competitive gaming gives marketers a new channel to build a relationship with a highly desirable demographic.
Seems like everyone is focusing on eSports: Activision and EA have new divisions devoted to eSports, and TakeTwo and Ubisoft are pushing eSports with some of their games. Is there room for lots of new eSports to expand the audience, or are these efforts heading into tough competition?
Wherever people play, they will also want to compete. So even if a publisher’s eSports effort does not evolve into a global phenomenon, it still builds goodwill and loyalty among a game’s fan base. Investing in a long-term connection with your customer base is integral to the strategy of any publisher that is in part or in its entirety focused on games-as-a-service.
We continue this in-depth look at eSports tomorrow with insights from Twitch and Newzoo!
