The eSports Industry to Date Emily Souza

Client Director
The Drivers Behind Current and Future Growth San Francisco

9 SEPTEMBER 2015 | SAN FRANCISCO

© 2015 Newzoo www.newzoo.com
 Emily Souza
Client Director
San Francisco

9 SEPTEMBER 2015 | SAN FRANCISCO

© 2015 Newzoo www.newzoo.com
 Emily Souza
Client Director
San Francisco

9 SEPTEMBER 2015 | SAN FRANCISCO

© 2015 Newzoo www.newzoo.com
 Weekend of 22/23 August Emily Souza
Client Director
Another Landmark Moment in Esports History San Francisco

ESL ONE COLOGNE LCS NORTH AMERICA FINALS

CS:GO LEAGUE OF LEGENDS
LANXESS ARENA, COLOGNE MADISON SQUARE GARDEN, NYC

>100 >50
THOUSAND MILLION
OGN MASTERS
LCS EUROPE FINALS
LEAGUE OF LEGENDS
ATTENDEES VIEWERS HEARTHSTONE
HOVET ARENA, SWEDEN YONGSAN ESPORTS STADIUM, SEOUL

9 SEPTEMBER 2015 | SAN FRANCISCO

© 2015 Newzoo www.newzoo.com
© 2015 Newzoo www.newzoo.com
 What’s Special? What’s Special?
$1.2M Per Player is Prize Pool $16M Was Crowd
more than the $18M Funded by $2.50
2014 Soccer World of every $10.00
Cup 3rd Place Prize donation, making
Money. Winning Team Valve $54M
$6M

New Direct Esports-Related Revenue Streams

© 2015 Newzoo www.newzoo.com
 ORIGINAL ESPORTS DRIVER: GET PEOPLE PLAYING

1,000,000 200,000

180,000

160,000

140,000
900,000
120,000

100,000

80,000
800,000
60,000

40,000

20,000

700,000 -

Average Daily DotA 2 Players Average Weekly DotA 2 Players DotA2 Twitch Viewership

SOURCE: GLOBAL GROWTH OF ESPORTS REPORT PREMIUM | Q3 2015 UPDATE

© 2015 Newzoo www.newzoo.com
 Sizing The Esports Economy
Without inflating the potential amidst all the buzz 9 SEPTEMBER 2015 | SAN FRANCISCO

© 2015 Newzoo www.newzoo.com

 Emily Souza
Client Director NEWZOO
emily@newzoo.com
THESE COMPANIES CURRENTLY SUBSCRIBE TO NEWZOO’S SERVICES

The Experts On All Things Games.

We are an innovative global market research and predictive analytics
firm with a primary focus on games. We provide our clients with a
mix of market trends, financial analysis, revenue projections,
consumer insights, data modelling solutions and predictive analytics
services across all continents, screens and business models. Newzoo
works for the majority of top 25 public companies by game revenue
globally, many independent game developers as well as leading
global hardware and media companies.

SAN FRANCISCO AMSTERDAM SHANGHAI

© 2015 Newzoo www.newzoo.com

 Emily Souza
Client Director NEWZOO
emily@newzoo.com
THESE COMPANIES CURRENTLY SUBSCRIBE TO NEWZOO’S SERVICES

The Experts On All Things Games.

We are an innovative global market research and predictive analytics
firm with a primary focus on games. We provide our clients with a
mix of market trends, financial analysis, revenue projections,
consumer insights, data modelling solutions and predictive analytics
services across all continents, screens and business models. Newzoo
works for the majority of top 25 public companies by game revenue
globally, many independent game developers as well as leading
global hardware and media companies.

SAN FRANCISCO AMSTERDAM SHANGHAI

© 2015 Newzoo www.newzoo.com

 EVOLUTION OF THE ESPORTS TREND | 2013
“PC gamers have grown to expect a high
quality game, with the ability to invest
oneself long term, due to persistent
profiles, online worlds, a way to play with
friends etc. PC game developers have
always understood that and delivered the
type of experience that keeps gamers
playing their games for month even years
at a time.” - Donovan Duncan, VP
Marketing, Curse Inc.

© 2015 Newzoo www.newzoo.com

 EVOLUTION OF THE ESPORTS TREND | 2014
“As one of the fastest growing sports in the world, eSports
only lacks exposure and deeper understanding. Newzoo has
been significant help to eSports in that regard. Their reports
have the shaped initial understanding of the market as their
information is clear and allow deep insight in a rather
unexplored business.” - Fabian Mallant, Manager Unicorns
Of Love

© 2015 Newzoo www.newzoo.com

 EVOLUTION OF THE ESPORTS TREND | 2015
“Publishers will want to take a strategic
look at their video sharing
infrastructure based on the
convergence of games and video. The
business opportunities are just
beginning to emerge, but clearly this
new surge in gaming creativity will
demand tremendous scalability and
innovative solutions.” - Anne
Blanchard, Gaming Solutions,
Limelight Networks,

© 2015 Newzoo www.newzoo.com

 The eSports Economy Today
Companies, Audience, Revenues 9 SEPTEMBER 2015 | SAN FRANCISCO

© 2015 Newzoo www.newzoo.com

 THE ESPORTS ECONOMY

e.g. e.g.

e.g.

e.g.

e.g.
© 2015 Newzoo e.g.

© 2015 Newzoo www.newzoo.com

 ESPORTS AUDIENCE AND REVENUES IN 2015
Revenues Prize Money KEY FACT
2015 | Esports| Global, NAM , APAC 2014 vs 2015e | Esports | Global

$71M Of all eSports

+97% YoY viewers

40%
37% GLOBAL 34%
$252M $36M 2015e
+30% YoY +82% YoY
NAM APAC
$93.2M $85.2M 2014
JAN-MAY
2014 2015
JAN-MAY does not play
+32% YoY 29% +28% YoY
$7.9M $15.7M the games
themselves
Audience | 2015 | Esports | Global
Esports Enthusiasts Occasional Viewers
113M
+27% YoY Spectator Sport
17M 25M 70M 147M
Source: Newzoo, The Global Growth of Esports:
(>once a month) (>once a month) Trends, Revenues & Audience Towards 2017

© 2015 Newzoo www.newzoo.com

 HUGE GROWTH POTENTIAL FOR A VALUABLE AUDIENCE
ESPORTS ENTHUSIASTS ARE A VALUABLE TARGET GROUP IN TERMS OF DEMOGRAPHIC PROFILE & ARE BIG DIGITAL MEDIA SPENDERS
© 2015 Newzoo | Source: Global Growth of Esports Report Premium

53% 30%
eSports Sponsors

Have a Are
full-time job female
vs. 37% of the total population vs. 48% of all gamers

30% 55%
Is in the high Is between 21
income bracket and 35 years old
vs. 22% of the total population vs. 33% of all gamers

© 2015 Newzoo www.newzoo.com

 OFFERING ENTERTAINMENT ACROSS ALL SCREENS

Device used to eSports Enthusiasts Occasional Viewers Total Population

That watch online video That watch online video That watch online video
watch online video 120.7 Million
10.1 Million 13.0 Million

United States

34%
of Esports enthusiasts use a tablet to
watch online video content versus 22%
for the average American aged 10-65

© 2015 Newzoo © 2014 Newzoo, Graph generated in and exported from the Newzoo Data Explorer www.newzoo.com
 SNEAK PREVIEW ESPORTS QUARTERLY UPDATE
2014-2018 CAGR
+38.9%
Biggest Audience KPI Growth: Occasional Viewers $520M
Becoming True Esports Enthusiasts
YoY GROWTH
$452M
YoY GROWTH +43.4%
+29.6%
$278M NEW
$252M Q3
$194M NEW UPDATE
Q3
UPDATE

2014 2015e 2017e

SOURCE: GLOBAL GROWTH OF ESPORTS REPORT PREMIUM | Q3 2015 UPDATE www.newzoo.com
© 2015 Newzoo
 IT IS EASY TO OVERESTIMATE THE MARKET ….

2009: Korea’s Esports Scene Takes a Blow 2014: US & China Lead
$71.0Me
Legislations in South Korea implementing bans and curfews Korea has never fully
on gaming, a feud between the Korean Esports Association recovered, rendering
and Blizzard, and the falling popularity of Starcraft the US today’s #1 in
contributed to the dip in prize money in South Korea
between 2008 and 2012. Since then, esports broadcaster
the accelerating
esports market, with
+97%
MBC was discontinued and OnGameNet is a much smaller China close on its YoY
operation whose content is no longer broadcasted on TV …. heels ....

In 2007, $36.0M
MBC Game and OnGameNet -48%
reportedly made $200M in YoY $19.8M
esports revenues, mainly
through broadcast TV $13.1M
$9.7M
$6.1M $6.4M $3.5M $5.2M
$3.6M $4.4M

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e
Source: Newzoo, The Global Growth of Esports:
Trends, Revenues & Audience Towards 2017
© 2015 Newzoo www.newzoo.com
 Betting & Fantasy Leagues
Where there is competition, there is betting… 9 SEPTEMBER 2015 | SAN FRANCISCO

© 2015 Newzoo www.newzoo.com

 ESPORTS BETTING ALREADY HOT
EXAMPLES OF START-UPS AND TRADITIONAL FORCES JUMPING ON THIS GROWING NICHE
© 2015 Newzoo | Source: Global Growth of Esports Report Premium

Eilers Research estimates:

$250 million now

eSports is Pinnacle’s
7th Biggest
market in terms of
volume, bigger than
Golf & Rugby

© 2015 Newzoo www.newzoo.com

 SPECIALIST STARTUPS ARISE: BETTING & FANTASY LEAGUES
Eilers Research estimates:
$23 billion (!?) in 2020.

© 2015 Newzoo www.newzoo.com

 GOOD NEWS: ESPORTS ENTHUSIASTS LIKE A BET
PLAYING FOR REAL MONEY IN ONLINE CASINO’S | US | 2015 BETTING/WAGERING ON REAL-TIME EVENTS (E.G. HORSE/SPORTS) | US | 2015
© 2015 Newzoo | Source: Global Growth of Esports Report Premium

33% Of Esports Enthusiasts Already is Your Client, vs 15% for Gamers and 8% for All.
© 2015 Newzoo www.newzoo.com
 eSports Versus Sports
Does it make sense to compare? 9 SEPTEMBER 2015 | SAN FRANCISCO

© 2015 Newzoo www.newzoo.com

 SPORTS & GAMING AUDIENCES EQUAL
THE NUMBER OF GAMERS COMPARE WELL WITH SPORTS FANS, ESPORTS COMPARABLE IN SIZE AS INDIVIDUAL SPORTS
© 2015 Newzoo | Source: Global Growth of Esports Report Premium

All All Individual Esports

Sports Gamers Sports Enthusiasts
vs. vs.
2.2Bn 2.1Bn
1.7Bn 151M
1.6Bn 145M

94M 89M
© 2015 Newzoo / Repucom

© 2015 Newzoo / Repucom

2014 2014 2014 2017 2014 2014 2014 2017

Sports Active in Gamers American Ice Esports

Fans Sports Football Hockey Enthusiasts

© 2015 Newzoo www.newzoo.com

 TOWARDS A $1BN ESPORTS ECONOMY
REVENUES PER ESPORTS FAN COMPARED TO THOSE OF SPORTS SHOWS POTENTIAL
© 2015 Newzoo | Source: Global Growth of Esports Report Premium

2014 Revenues/Fan Esports Growth Scenarios

Global Revenues Divided by Fans Based On Annual Revenue per Enthusiast

All $3.0Bn
Sports Alternative
$56 Optimistic TOTAL ESPORTS
REVENUES $15
Scenario
Individual
$1.1Bn
Sports $1Bn
$7 $5
$20 Report AVERAGE

$1.0Bn
REVENUE PER
Scenario ENTHUSIAST
$3
$3
© 2015 Newzoo / Repucom

$2
$2
$0.5Bn
Esports
© 2015 Newzoo / Repucom

$2 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

© 2015 Newzoo www.newzoo.com

 eSports Pace of Growth
Overarching trends push esports to maturity 9 SEPTEMBER 2015 | SAN FRANCISCO

© 2015 Newzoo www.newzoo.com

 ESPORTS FUELED BY HUGE CONSUMER TRENDS…
NEWZOO REPORTS
“Power to the People” | “The Consumer As Producer”

2015
EXPERIENCE CREATE

MOVIES/GAMES ART/DESIGN
Made by “professionals” PRO PRO Made by “professionals”

CONSUMER GENERATED Enabling Platforms & Tools

CONTENT & DIRECT Curse, Twitch, YouTube
CONSUMER EARNINGS Channels, Fundly,
“POWER TO Instagram …
THE PEOPLE”
© 2015 Newzoo

ADVERTSING/MAIL
SHARE PRO Made by “professionals”

© 2015 Newzoo www.newzoo.com

 … AND MANY FACTORS DETERMINE PACE OF GROWTH

More Genres Competition Regulations Alignment of Traditional

& Geographic Depth & Content Rights & Digital Media

© 2015 Newzoo www.newzoo.com

 WHILE WE SORT THIS ALL OUT….

15TH OF JULY 2015 10TH OF AUGUST 2015

$20,000 PRIZE MONEY $26,000,000 IN FUNDING

© 2015 Newzoo www.newzoo.com

 YOU CAN COUNT ON US TO KEEP TRACK.
Emily Souza
Client Director
emily@newzoo.com

FULL 68-PAGE REPORT AVAILABLE NOW. PREMIUM

SERVICE INCLUDES QUARTERLY UPDATES. NEXT
UPDATE: 15 SEPTEMBER

www.newzoo.com/esportsreport

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