eSports: Brands Stay on the Gravy Train

The eSports industry has been on an upward curve for some time now, and that trend looks set to continue for the foreseeable future.

According to a new study by marketing intelligence service WARC, global advertising spend on eSports is expected to rise to $844 million in 2020.

That represents a year-on-year increase of almost 10 percent and perfectly highlights how attractive eSports continue to be to advertisers.

The suspension of play in traditional sports presented an opportunity for eSports to build its audience, with the sector already approaching one billion viewers worldwide.

India, United States and United Kingdom all saw new viewers, while existing audiences watched more content than ever before in numerous countries, including South Korea and Indonesia.

Advancements in mobile technology have been a major factor in the success of eSports, and the recent lockdown contributed to a further increase in mobile gaming.

WARC reported that 2.9 billion people play games on their smartphones, a figure that represents 71 percent of internet users.

Around 1.2bn people are mobile-only gamers, with the Middle East, Asia Pacific and Africa the areas where the practice is most prevalent.

Mobile gamers also tend to be comfortable with advertising if it keeps the game free-to-play, particularly in the US where 70 percent of people are happy for ads to be displayed.

Live streaming platform Twitch has also significantly benefited from increased interest in eSports, a point perfectly demonstrated by gaming content consumption during April.

Twitch garnered more than 1.6bn cumulative hours, blowing the likes of YouTube Gaming, Facebook Gaming and Mixer out of the water.

With Microsoft confirming the closure of Mixer during July, Twitch looks well placed to maintain its position at the forefront of live streaming.

“The gaming content world is evolving quickly,” said James McDonald, Managing Editor of WARC Data and author of the report.

“Streaming is the new prime time for much of Gen Z, and Mixer’s shuttering this month served only to highlight the stranglehold Twitch has on the market.

“Tencent may yet prove a challenger in the US with Trovo this year, but it has a great deal of catching up to do along with Facebook and YouTube.

“Competitive gaming is big business in Asia – where Tencent is already king – though traditional sports fans in the West are yet to be wooed, with existing audiences instead consolidating during lockdown.

“A great deal of merger and acquisition activity, especially around media rights within eSports, is expected in the short term as investors vie for control of potential windfalls.”

McDonald’s comments regarding media rights certainly have plenty of merit, particularly in light of recent research conducted by eSports experts Newzoo.

The report estimates that eSports will generate close to $100m in media rights deals this year, before growing to almost $400m by 2021.

That figure would make up nearly a quarter of total eSports revenues, thus helping the sector move closer to traditional sports in terms of revenue share.

“We see the value of media rights growing significantly over the next few years,” said Frank Uddo, Senior Vice President of Global Media at ESL. “In fact, we already have proof – the vast majority of the deals we’ve finalised have grown substantially.

“There is no doubt that media companies are seeing the value of eSports – the global scale, the rapid growth, the young, diverse and digitally versed audiences that are hard to reach otherwise.

“Also, the passion and engagement levels of our viewers and, during unprecedented times like these, our ability to keep delivering live-action and world-class competitions when many others can’t.”