China is the largest market by revenues, with total revenues of $385.1 million in 2020, followed by North America, with total revenues of $252.8 million. Newzoo noted that it has re-evaluated the size of the esports market, based on improved methodologies. Some media have been critical of Newzoo’s hype around esports in the past.
Globally, the total esports audience will grow to 495.0 million people in 2020, Newzoo said. Esports Enthusiasts (people who watch more than once a month) make up 222.9 million of this number.
In 2020, $822.4 million in revenues—or three-quarters of the total market—will come from media rights and sponsorship.
In the coming year, the global esports economy will generate revenues of $1.1 billion, a year-on-year growth of 15.7%. Most of these revenues (74.8%) will come from sponsorships and media rights, which will total $822.4 million, a 17.2% increase from last year.
Consumer spending on tickets and merchandise will total $121.7 million, while another $116.3 million will come from game publishers’ investments into the esports space, via supporting tournaments through partnerships or as white-label projects with professional tournament organizers.
Newzoo also said the global esports audience will reach 495.0 million this year, made up of 222.9 million Esports Enthusiasts and a further 272.2 million Occasional Viewers. In 2020, the average revenue per Esports Enthusiast will be $4.94, up 2.8% from 2019.
“As the esports market matures, new monetization methods will be implemented and improved upon,” said Remer Rietkerk, head of esports at Newzoo, in the report. “Likewise, the number of local events, leagues, and media rights deals will increase; therefore, we anticipate the average revenue per fan to grow to $5.27 by 2023.”
Mobile has unlocked esports for emerging markets—a trend visible in countries like Vietnam, where titles like PUBG Mobile and Garena Free Fire have exploded in popularity.
As such, emerging esports markets will show the highest compound annual growth rate (CAGR for 2018-2023), with regions such as Southeast Asia (24.0% CAGR), Japan (20.4%), and Latin America (17.9%) accelerating to close the gaps between themselves and older, more developed esports markets.
China will remain the largest esports market in 2020, with revenues of $385.1 million. These revenues will grow with a CAGR (2018-2023) of 17.0% to reach $540.0 million by 2023. Most of these revenues will come from sponsorships, which will grow from $187.1 million in 2019 to $222.4 million in 2020.
Digital goods will be the fastest-growing revenue stream toward 2023, growing from $7.1 million in 2020 to $17.2 million by 2023. North America will be the second-largest region in terms of revenues with $252.5 million, followed by Western Europe as the third-most revenue-generating region with $201.2 million in 2020. China will be host to the largest esports audience with 162.6 million in 2020, followed by North America with an audience of 57.2 million.
Rietkerk said, “Our data highlights that 2019 was a seminal year for many teams, with tremendous growth in traditional revenue streams such as sponsorship. Meanwhile, leagues have been moving toward a ‘homestand’ system in which teams play at their own venues. This potentially opens the door to increased matchday revenues for teams, including returns from ticketing and concessions, as well as larger merchandise revenues.”
And Rietkerk added, “The market is also maturing in entirely new ways, with innovative revenue streams starting to develop, such as streaming and digital goods. These are new ways to monetize that are not available to traditional sports; they also demonstrate a growing understanding of the competitive advantages esports has over sports. These revenue streams have become pioneering ways for teams, organizers, and publishers to grow the business.”
With all of the dynamic changes, Rietkerk acknowledged that Newzoo needs to keep its model for the industry fresh.
In 2019, there were 885 major events. Together, they generated $56.3 million in ticket revenues, up from $54.7 million in 2018. Total prize money in 2019 reached $167.4 million, a slight increase from 2018’s $150.8 million.
The League of Legends World Championship was 2019’s biggest tournament by live viewership hours on Twitch and YouTube, with 105.5 million hours. The Overwatch League was the most-watched league by live viewership hours on Twitch and YouTube, generating 104.1 million hours.
The esports audience will grow to 495.0 million globally in 2020. Esports Enthusiasts will account for 222.9 million of this number, up 25 million year on year, and will increase with a CAGR (2018-2023) of 11.3% to 295.4 million in 2023.
Meanwhile, the number of global Occasional Viewers will hit 272.2 million in 2020, up from 2019’s 245.2 million. This number will grow with a CAGR (2018-2023) of 9.6% to 351.1 million in 2023.
In 2020, 2.0 billion people will be aware of esports worldwide, an increase from 2019’s 1.8 billion. China will continue to be the country/market that will contribute most to this number, with 530.4 million esports-aware people.