Crucial year for esports development

Crucial year for esports development

Monday, September 5, 2016 Posted by Andy McCarron
Revenue projections for esports this year have jumped 7%

Newzoo released its latest quarterly update of its 'Global Esports Market Report' last week with the biggest revelation being that its projection for esports revenues for the year has risen 7%.

The new projection estimates a total revenue figure of $493m (£371.5 m) in 2016, which is up from the $463m (£348.8 m) predicted at the beginning of the year.  

This puts the year-on-year growth at a sizable +51.7%. The new figures are largely the result of Newzoo’s continuous effort to quantify the impact of recent developments and investments and to integrate the latest actuals in its proprietary Global Esports Audience and Revenue model.

Peter Warman, Newzoo CEO, spoke to about the latest update. He said: “This year is crucial for esports. As the initial buzz dies down a bit, the focus has shifted to overcoming the challenges of  making esports into a mature and sizeable global business. New local and global initiatives are all aimed at this goal but are not aligned yet.

“One of the most interesting aspects in this phase is the position of the teams, particularly in relation to the publishers. Already we see teams group together to claim a (higher) share of revenues generated by leagues and championships. Ultimately, the fan base of teams could outgrow the number of gamers of an individual title creating a power shift from publishers to teams. That esports will be a multi-billion dollar business is 100% sure. At what pace remains the big question.”

The current Newzoo prediction is that as an industry esports will break the billion dollar mark in 2019. This assessment leaves out betting on esports for which a separate report is created.

Sponsorship and brand revenue continues to be the major fuel of the esports economy. The revenues generated by brands in 2016, consisting of advertising, sponsorship, and media rights, is expected to total $350m (£263.6m) according to Newzoo.

This accounts for a considerable 71% of the esports economy. The remaining 29% has been generated by consumers via merchandise and ticket sales, as well as publisher fees spent on organisers and other service providers.

Totally Gaming says: Full steam ahead for the esports industry. Peter Warman’s assessment that it is a case of when, not if, this becomes a billion dollar industry seems to resonate pretty strongly. With Overwatch on its way to joining the ranks of the Tier 1 titles, its success alone could have considerable impact on the 'if' part.

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