Brace yourself for an explosion of growth in eSports in the next few years.
Competitive gaming is already growing into a lucrative industry, generating an estimated $748 million in revenue worldwide in 2015E, according to a SuperData Research report. The growth is attributed to the brands and advertisers that entered the market this year, which contributed a total of $579 million in sponsorships and advertising.
SuperData analysts forecast the explosive growth in the eSports industry will become a year-on-year phenomenon.
Stephanie Llamas, director of research and consumer insights at SuperData, said the market will grow to over $1.9 billion by 2018, driven mainly by the U.S. and Europe, which are expected to rapidly invest in the space as the Asian market approaches stagnation.
Today, Asia leads the eSports market with over $321 million in revenue, followed by North America at $224 million. Europe came at third with $172 million, while the rest of the world account for $29 million.
Competitive gaming started in South Korea in the late 1990s and grew following the formation of the Korean eSports Association, which oversees more than 25 titles. From there, the success of eSports in South Korea spread throughout Asia, culminating in what are now considered big eSporting events such as Riot Games’ League of Legends World and Blizzard Entertainment’s Blizzcon, featuring StarCraft II and World of Warcraft, among other games.
“eSports are becoming more mainstream and that has attracted traditional media channels like TBS and ESPN. So far, fans have had to seek out platforms to watch tournaments and players, but now people can stumble upon eSports while flipping through channels,” Llamas said in a note.
For now, however, most of the money is coming from brand sponsorships.
“Brands have taken notice of eSports’ popularity and many have become sponsors quicker than projected,” according to the report. “By year’s end, sponsorships of tournaments, players and eSports-related sites will exceed $578 million, just 28 percent less than this year’s NBA sponsorship total.”
Sponsorships currently makes up about 77 percent of all eSports revenues, while the remaining 23 percent are from daily fantasy sports sites, prize pools, tournament pools, merchandise and ticket sales.
Tickets are by far the lowest contributor at $15.9 million, prompting organizers to find other means where they can make the bulk of their money.
“Investors inject over $150 million of capital into new platforms like eSports betting and fantasy sites, but these sites fall short of expectations and earn $56 million this year. Fans remain more comfortable wagering virtual gaming content over cash, causing real-money sites to gain traction slower than anticipated,” according to the report.