Esports Viewership vs. Sports in 2020 | Roundhill Investments

According to Newzoo's 2020 Global Esports Market Report, the total ... “esports enthusiasts” (people who watch professional esports content more than once a ... Learnmoreaboutinvestingin:   EsportsStreaming Learnmoreaboutinvestingin:   EsportsSportsBetting Home Research Esports Current:EsportsViewershipvs.Sportsin2020 ROUNDHILLBLOG EsportsViewershipvs.Sportsin2020 byRoundhillTeam/UpdatedasofSeptember25,2020 There’salotofbuzzaroundesportsthesedays.Inparticular,headlinesaroundtheviewershipnumbersthatmajoreventsaredrawing.Asmajoresportseventscontinuetoreportsteadilyrisingviewershipgoinginto2021,theexactnumbershavebecomeincreasinglyimportantfororganizations,sponsors,andthemediatotakenoteof. Onethingthatmanyesportsfanstakenoteofistheviewershipwhencomparedtothatoftraditionalsportingevents.Inshort,it’ssurprisinglyhigher.Alothigher. Buttherealityis,whencomparingviewershipnumbersforesportswiththoseoftraditionalsports,it’snotalwaysaperfectapples-to-applescomparison.Thereareseveralreasonsforthis,andwhilecreatingaperfectformulaforcomparingindividualdatapointswouldbechallengingatbest,we’rehopefulthatthispieceandtheframeworkitprovidescanhelpthegeneralpublicbetterunderstandtrendsinviewershipdatabyfocusingonhigherleveldata. Source:Newzoo-2020GlobalEsportsMarketReport AccordingtoNewzoo’s2020GlobalEsportsMarketReport,thetotalesportsaudiencewillgrowto495.0millionpeoplein2020,ayear-on-yeargrowthof+11.7%. Newzoosegmentsesportsviewershipinto“occasionalviewers”(peoplewhowatchprofessionalesportscontentlessthanonceamonth)and“esportsenthusiasts”(peoplewhowatchprofessionalesportscontentmorethanonceamonth),whichcanbeanimportantdifferentiationforthoseseekingtoinvestinesportsgiventheoftenpublishedviewershipcomparisonstotraditionalsports.In2020,therewillbe223millionesportsenthusiastsintheaudience,alongwith272millionoccasionalviewers. Newzooestimatesthatby2023,thenumberofesportsviewersgloballywillgrowto646million,with“occasionalviewers”and“esportsenthusiasts”growingfrom245millionto351millionand198millionto295million,respectively,between2019and2023. Anotherimportantconsiderationistheregionalbreakdownofesportsviewers.Whileroughly50%ofviewersconsidered“esportsenthusiasts”byNewzooarelocatedinAsiaPacific,NorthAmerica,Europe,andtherestoftheworldeachrepresentmorearound10%ofthetotalnumber.Unlikemanytraditionalsports–withsoccer,orfootball,asit’smorebroadlyknown,asanotableexception–theaudienceforesportsistrulyglobal. Thisallbeingsaid,manywouldarguethattheaboveanalysisisabitunfair.Afterall,“esports”isn’tasinglegame.“Esports”encompassescompetitiveplayincountlesstitlesacrossanumberofgenres,fromMultiplayerOnlineBattleArenas(“MOBAs”)toReal-TimeStrategy(“RTS”)andeverythinginbetween.Takenastepfurther,theaudiencebygametitlecanvary,similarlytotraditionalsports.WhileDota2tiltstoanAsianaudience,Counter-Strike:GlobalOffensivehasaprominentEUbase.However,onecouldeasilycounterthatthisonlybroadensthepotentialTotalAddressableMarket(“TAM”)andlongevityoftheesportsphenomenon. Related:HowtoInvestinEsports-DiggingDownintotheNERDIndex WhatisEsports? Whiletheexactdefinitionforesportswillvarydependingonwhoyouask,mostwouldagreewiththefollowing:esportsisplayingvideogamescompetitively.Asalludedtoabove,thisincludescountlessdifferenttitles,anumberofgenres,multipletypesofgamingdevices,andvariedstructurestocompetitiveplay. HistoryofEsports Esports,bydefinition,hadtostartaftervideogameswere“invented”.Thefirst“esportsevent”waslikelyheldin1972atStanfordUniversity,whereplayerscompetedinadecadeoldgamecalledSpacewar.Later,esportscrowneditsfirstcelebrityinBillyMitchell,whoatonepointheldrecordsinarcadegamesPac-ManandDonkeyKong(yearslater,Billy’sactivitieswouldretroactivelybecomeesports’firstmajorscandal). Advancesintechnologyacceleratedthegrowthinesports,fromtheNES(NintendoEntertainmentSystem)inthemid-80stotheproliferationofPCgamingwhich,withalittlehelpfromtheInternet,allowedgamerstocompetewithoutbeinginthesamelocation. TheriseinPCgamingsawtheadventofthefirstesportsleagues,aswellasesportseventsthatlookalotmoreliketoday’seventsthantheydidatStanfordin1972.Oneevent,forapopulargamecalledQuake,caughtthepublic’sattentionwheneventualvictorDennis“Thresh”FongtookhomeaFerrari328GTS. Technologicaladvancescontinuedtomovetheindustryforward,culminatingintheintroductionofvideostreamingtechnology(nottobeconfusedwithgamestreaming)whichhashadatremendousimpactonesports,andgamingmorebroadly,leadingustotoday’smanifestationofthecompetitivegamingindustry. Historyof“traditional”sports “Traditional”sportshaveamuchlongerhistory,hencetheclaimonbeingthe“traditional”ones.Nearlyeveryancientcultureenjoyedsomeformof“sport.”PerhapsbestknownisthesportinghistoryofAncientGreece,whichgavebirthtothebi-annualsportingfestivalcommonlyknownastheOlympicGames.Youknowtheones.Thegamesthemselveshaveevolvedovertime,withsomepastimesshowingstrongerstayingpowerthanothers.Forexample,wrestlinghasexistedinsomeformoranotherfor5,000years,whileothersdevelopedcomparativelylater,likesoccer(2,000yearsago)andbasketball(130yearsago). Manyoftherecenttechnologicaladvancesthathavehelpedenabletherapidgrowthinesportshavealsoaffectedtraditionalsports,aswell(thinkgoalcams). FivedifferencesbetweenEsportsandSports Whileit’simpossibletohighlightallofthedifferencesbetweenesportsandsports,therearesomekeydifferencesworthnoting: Esportsareadigitallynativephenomenon. The“game”isintellectualpropertythatbelongstoacompany. Streamingoffersanalternativefortalentedgamerstocompetitiveplay. Fan-basesarenottraditionallylocation-specific(Activisionistryingtochangethis). Mostesportstitlesmonetizetheirfan-baseatalowerratethantraditionalsports. EsportsPrizePools Formanybigesportstitles,theprizepooldollarsaremeaningful-andabovethatofvarioustraditionalsports.Dota2’sflagshipevent,TheInternational,haslong-heldandannuallybrokentherecordforlargestsingle-eventesportsprizepool,mostrecentlytotaling$34.3million(andgrowing)in2020.Thisbeatsallotheresportsandsportsevents,includingeventheSuperBowl,whereeachwinningplayerseesalittleover$118,000. Tencent-backedEpicGames’recenthittitleFortnite’sWorldCuphadafinaleventprizepoolof$30million.Whilethisisn’tquitethetotalprizepoolofTheInternational,theFortniteWorldCuphadthebiggestsingle-playerpayoutofalltime.ThefirstprizewinneroftheSoloFinalsbecame$3millionricher. There’srealmoneyonthelineatesportsevents.Andlotsofit.Thishasmadethecompetitionevenmorehighstakes,bringinginevenmoreviewers. EsportsViewership Viewershiphasbeengrowingrapidly.In2012,totalesportsviewershipwas134million(76millionoccasionalviewersand58millionesportsenthusiasts).By2018,thatnumberhadgrownto395million(222millionoccasionalviewersand173millionesportsenthusiasts).From2012to2018,totalviewershipgrewby195%. Source:Statista Fortnite’sfirstbigforayintocompetitiveesportssawsomeincredibleviewershipnumbers.TheFortniteWorldCupSoloFinalsinthesummerof2019hadatotalhourswatchedmarkof1.8milliondespiteitbeingjustunderfivehoursofactualgameplay.Thisisacommonstatisticusedformeasuringthepopularityofesports,sinceunliketraditionalsports,esportsviewerstendtocomeinanddropoutthroughoutthedurationoftheevent.ThesesurprisingnumbersputFortniteatthetopoftheTwitchcharts,apopularstreamingplatformwheremanyesportseventsarebroadcastlive. Butesportsisafast-growing,ever-changingindustryandLeagueofLegendsdidn’thavealongtimetocelebrate.Fortnitedidn’thavemorethanafewmonthstoclaimtheirviewershipspot. Dota2’slargestesportseventoftheyear,TheInternational,sawanincredible1.1millionpeakconcurrentviewersonTwitchduringthefinals.Thismadeitthemostwatchedesportseventofalltime.Butthatalsodidn’tevenlastafullseason. TheLeagueofLegendsWorldChampionshipin2019wasarecord-breakingesportsevent,boastingover100millionviewers.MostofthesefanstunedinviastreamingserviceslikeTwitchandYouTube.Incomparison,theSuperBowlthatsameyearhad100.7millionviewersacrosstheNFL’sdigitalpropertiesandCBS.The2019LeagueofLegendsWorldChampionshipcementedthegameasthemostviewedesportofalltime,breakingstreamingrecordsonTwitchthanksto1.7millionpeakconcurrentviewersonthatoneplatformalone. 2020islookingtobeanothersuccessfulyearforesportslikeLeagueofLegends.Infact,thefirstdayofLoLWorlds2020had1.1millionviewers(excludingtelevisionviewersandChinesestreamingsites).TheNFL2020seasonopenergamehadalittleover19millionviewers.Ofcourse,it’shardtocomparethetwowhenthedataisofferedinsuchdifferentways. Esportseventsandstreamsareoftenmeasuredbytheirpeakconcurrentviewershipcountsandhourswatchedtotal,whereastraditionalsportingeventsonlyoffertheirtotalviewershipnumbers.Esportsviewersarealsosplitbetweenmanydifferentstreamingplatforms,includingTwitch,YouTube,andotherofficialchannelsfortheevent.Gettingevenmorespecific,somepeopleviewthegameonunofficialchannelsonTwitch,likestreamerswhoarebroadcastingthegametodolivereactionstotheevent.Thisdoesn’tallowforapropercomparisoninpopularity,sincemanyesportsviewersarenotofficiallyaccountedfor. Still,itseemsthatesports-whilegrowingatanincrediblyrapidpace-arenowherenearthenumberstraditionalsportsarepullinginaroundtheworld. ProjectedViewershipforEsports Esportsviewershipisexpectedtogrowto646millionby2023(351millionoccasionalviewersand295millionesportsenthusiasts).Thisrepresentsa10.3%CAGRfrom2018-2023. Whichtitleswillcatchthemosteyeballs?Well,thatisanybody’sguess.Fortnitedidn’texistin2016.NordidtheOverwatchLeague,ortheCallofDutyWorldLeagueinitsnewform.Theesportsindustry,muchlikethegamingindustrymorebroadly,isahit-drivenindustry.Thismakesitincreasinglyimportantforthoselookingforexposuretoconsiderabroaderbasedapproachintheabsenceofspecializedknowledgeorviews. Related:ThematicInvesting2.0-WhyisitImportant? SportsViewership Traditionalsportsviewershipisstilllargerthanesports.Thismayremainthecase,evenaccountingforesports’recentgrowthtrajectoryincomparisontothatoftraditionalsports.Indeed,thesportsindustryisoneofthefewtypesofprogrammingthatcanstillcommandmillionsofviewersatatimeonlineartelevision. Soccerremainsthemostpopularsportintheworld,withanestimated4billionfansglobally.PerhapssurprisingtomanyUS-basedreaders,Cricketissecondwithanestimated2.5billionfansglobally.Americanfootballdoesn’tevencrackthetop-10!Checkoutthisfulllist. Source:WorldAtlas Whilesomeanalysesofaudiencedatacomparingesportstotraditionalsportssufferfromdifferingapproachestothemeasurement,estimatesforoverallfansseemstoofferamoreapples-to-applescomparison(thoughsurelydifferentsurveyswillusevaryingestimationtechniques). ProjectedViewershipforSports Aswithanyprojection,it’sdifficulttosaywheresportsviewershipgoesfromhere.It’shardtoimaginepowerhouseslikesoccerorcricketexperiencingafallfromgrace.Overalltrendswilllikelynottellthewholestory,either.Thus,whileamorein-depthanalysiswouldberequiredtobreak-downexpectationsforthetraditionalsportsindustry,thereiscertainlyroomforesportstocontinueearningahigherproportionoftheoveralleyeballsmovingforward. EsportsvsSportsViewership Demographicchangesneedtobeconsidered.Esportsarerelativelymorepopularwithyoungerconsumers,manyofwhomgrewupplayingvideogamesandwhohaveaninnateunderstandingforgameplaythatpreviousgenerationsdonot.Moreover,esportsviewers(specifically,enthusiasts)aremorelikelytomaintainfull-timeemploymentthantheoverallonlinepopulation(67%vs53%)andhavehighhouseholdincomes(43%vs.30%). Source:Newzoo-2019GlobalEsportsMarketReport Regionalconsiderationsshouldbemade,too.ForsportspopularintheAsiaPacificregion,thetideoffansmayalreadybewellunderway.Doesitcontinue?Orhasitreachedasteady-state?Inotherregions,thosetiedtothetraditionalsportsecosystemwouldbewisetocloselyfollowlocaladoptionofesports.Infact,manyhave. Technologicaladvancesmayonceagainplayahandinshapingthefutureofesportsandsportsviewership.Advancementsinmobiletechnologyhavealreadymadeitsothat5billionpeoplegloballyhaveamobilephone,withoverhalfofthedevicesbeingsmartphones.Theintroductionof5Gconnectivity,widelyexpectedtotakeplaceinthenextfewyears,willincreasepeople’sabilitytoaccesscontentthatrequiresaninternetconnection. TheFutureofEsports Theesportsindustryappearstobeenteringanexcitingstageofitsdevelopment.Financialinvestmentsintoleaguesandteamshaveleftlargepartsoftheecosystemextremelywellcapitalized.Theproliferationofgame-streaminghasplaceditsquarelyintothemainstream,withwell-knownstreamerNinjarecentlyappearingonthecoverofESPNTheMagazine.Theroll-outof5Ggivesmobileesportsatonofpotential.Willthefranchiseleaguemodelwork?Willtop-playersbargainforbettereconomicswithteamsgiventhevalueoftheirstreamingcareers?Willwegetanewgenre,alaBattleRoyaleinthelatetwenty-teens?Ijustdon’tknow,butIamexcitedforwhatevercomesnext. Related:BattleRoyale-FadorFuture? Conclusion Therearealotofwaystomeasureviewership,andunfortunately,it’snotalwaysclearhowbesttocomparetwonumbers.Makingmattersworse,esportsandtraditionalsportsarejustnotthesame.Differentorigins,growthtrajectories,demographics,viewingmediums,andcountlessotherfactorsmakeitdifficulttocomparethetwo,andevenmoredifficulttopredictthefuture.Traditionalsportsstillgarnermoreviewersthandoesports. Butitmightonlybeamatteroftimeuntilthat’snotthecase.Althoughit’syettoseewhichvideogamewillreachthosenumbersfirst. LookingformoreGamingandEsportscontent? Videos Research Companies   Related:Streaming101,HowtoInvestinStreaming   Formoreinformation,pleasevisitroundhillinvestments.comorfollowusontwitter@roundhill.   BACKTOBLOGS NewsletterSign-up Subscribe *indicatesrequired EmailAddress* FirstName LastName ×