Newzoo has released the Q3 update to the “Global Growth of eSports Report,” the first ever comprehensive eSports report launched in January. Newzoo is publishing quarterly updates to keep its clients and the industry up to date on the latest trends and developments in the eSports economy. Based on recent research and analysis, Newzoo estimates a higher year-on-year growth rate for eSports revenues than previously anticipated. Revenues are now expected to reach $278 million in 2015, up 43.1 percent from 2014. The number of eSports Enthusiasts worldwide has also grown slightly more than anticipated, from 89.7 million last year to 116.0 million in 2015. The eSports economy’s growth is fueled by a stack of KPIs: growing global connectivity, awareness, audience, engagement and revenues per Enthusiast. Newzoo’s Global eSports Audience and Revenues Model combines a variety of data sources and validation methods to track all these KPIs to come to a realistic and clear understanding of why and how fast eSports is growing on a regional and global scale.

Online Advertising is Fastest Growing Revenue Segment

ESports revenues for 2015 are anticipated to grow by 43.1 percent to reach $271 million (compared to the previously expected growth rate of 29.6 percent). As mentioned in a previous post, Newzoo’s revenue estimates take into account the eSports crisis in Korea in the period 2008-2012, which impacted the global eSports economy as a whole and has been overlooked by other research companies. Online advertising is the fastest growing revenue segment, up 64.2 percent on a global scale compared to 2014. The North American eSports online advertising business is expected to almost double this year as more and more brands benefit from the enormous video content generated by eSports and the competitive gaming scene. Media rights will continue to take a higher share of revenues as the economy matures, pushing overall eSports revenues up to $765 million in 2018. The 2014-2018 Compound Annual Growth Rate (CAGR) of eSports revenues is 40.9 percent.

Occasional Viewers Evolving into eSports Enthusiasts

In 2015, the number of eSports Enthusiasts worldwide is expected to reach 116.0 million, a year-on-year growth of 29.3 percent. Of these Enthusiasts, 18.5 million are in North America, 16.8 million in Europe and 53.9 million in China. The majority of consumers that now engage with eSports more than once a month (eSports Enthusiasts) have migrated from the Occasional Viewer audience. In turn, Occasional Viewers show a 3% decline. Combined, this results in a 12.4 percent growth of the total global eSports audience. In 2018, the number of eSports Enthusiasts is expected to grow to 165.1 million.

Newzoo’s Global Esports Audience and Revenue Model

The methodology for Newzoo’s eSports data consists of three levels: 1) Data Input, 2) Predictive Modeling and 3) Result Validation. For Data Input, extensive primary consumer research across the globe sizes and profiles eSports awareness and engagement. Newzoo also continuously tracks and analyses company revenues, live event audience figures, prize money, and video content viewer data. In the graph below, for example, Newzoo’s Twitch data and Steam API data were used to track viewership and players during Valve’s multimillion dollar DotA2 event ‘The International’. Predictive Modeling uses parts of Newzoo’s Global Games Market predictive model, which consists of several complex databases combining numerous data streams, financial analysis, primary research, as well as population and economic census data. Result Validation is done in two ways: through additional research and by discussing findings with companies including game publishers, eSports teams, global streaming companies and local media companies.