E-SPORTS TO REACH REVENUES OF US$2.7 BILLION IN 2024

An Omdia report shows e-sports competitions are booming during the Covid-19 pandemic and they are expected to grow in the following years. While mainstream sports face an uncertain moment, e-sports competition has been able to move online, and is seeing an uptake in viewership as a result, a burden for networks but a potential boom for advertising.

As measured by Omdia, total e-sports revenue reached US$1.4 billion in 2019, and this number is forecast to expand at a 14.5% CAGR to reach US$2.7 billion in 2024. "E-sports streaming advertising is forecast to see a double-digit CAGR to 2024, while sponsorship is the largest contributor to e-sports revenue. Another interesting angle is in-game advertising – with, for instance, ‘League of Legends’ beginning this initiative in its official games," explained Dom Tait, Practice Leader, Games, Music, and Audio at Omdia, to Señal News.

●  THE POSITIVE SIDE OF THE PANDEMIC

Both sports and e-sports have seen their live events shuttered in the wake of the Covid-19 crisis. For sports, this has effectively meant the cessation of all activity. For e-sports, however, the possibility exists for solely online play, and that option is increasingly being taken up by tournaments that would otherwise have been postponed or scrapped. The Overwatch League decided mid-March to run scheduled matches purely online. The League of Legends European Championship has followed suit.

On March 22, Bahrain Grand Prix was cancelled and it was replaced by the F1 Esports Virtual Grand Prix, with current motorsport drivers and other celebrities competing on the Sakhir circuit as realized by Codemasters’ F1 2019 game. Notably, Codemasters already works with in-game advertising provider Bidstack to bring dynamic in-game trackside ads to titles such as DiRT Rally, with plans to extend this to another forthcoming 2020 title. In the event that F1 signs off on the idea, those advertisers looking for return on investment on currently unused out-of-home campaigns could find an interesting audience on the virtual motor racing circuit.

The Bahrain e-race was an unprecedented shop window both for e-sports and F1 fans, many of whom would have been surprised by the verisimilitude that current games can now command. Helped by enthusiastic and knowledgeable commentary, the race felt like the real thing and had 1.7 million streams at the time of writing.

Results were similarly eye-catching when Fox televised an e-sports competition of NASCAR racing, also on March 22. In total, 903,000 watched the event, about half as many as the average 2.1 million viewers for actual NASCAR races in 2019. The 18–34 age group share of these two audiences was barely changed, meaning viewers outside the classic gamer demographic have likely been trying out e-sports.

●   NEW BUSINESS MODELS FOR THE TRADICIONAL TV

"We are certainly seeing more engagement with games streaming platforms during global lockdowns. It’s something of a two-way street though, as in many cases traditional broadcasters are signing short-term deals to bring e-sports content on to either their broadcast or online platforms – such as the BBC in the UK and Fox in the US,"  Dom Tait commented. "A flurry of short-term deals has been signed in order to tap into this sudden demand for e-sports – and, of course relatedly, to fill in the many gaps of live sports programming. In the longer term they face more of an uphill battle, with streaming sites such as Twitch firmly established as the default place to watch major e-sports competitions,"  he analyzed.

For the gaming expert at Omdia, there are two factors that explain the success of the e-games nowadays. "The first is consumer interest. E-sports attracts an incredibly appealing demographic of mostly young consumers with above-average levels of discretionary income, and it attracts them in huge numbers. The second factor has been the increasing attention paid to this snowballing consumer interest among advertisers, sponsors, and other interested media parties. Recent years have seen a surge in involvement from companies as varied as Facebook, NBC, Hyundai, and Snickers, all attempting to tap into e-sports’ highly desirable audience,"  he concluded.

By Romina Rodríguez