THE EXPLOSIVE GROWTH OF ESPORTS - .GLOBAL ...cga.global/research/CGA_Newzoo_Esports_Growth_2016.pdfGlobal Esports Audience Growth 2014-2019 Source: Newzoo 2016 Global Esports Market

C A S U A L G A M E S S E C T O R R E P O R T 2 0 1 6

THE EXPLOSIVE GROWTH OF ESPORTS AND WHY IT MATTERS TO EVERYONE

CGA.CGA.

Global Esports Audience Growth 2014-2019

Source: Newzoo 2016 Global Esports Market Report

Rapid Growth in Revenues & Audience Continues

Key Facts• The global esports audience

was 226 million and the number of Esports Enthusiasts reached 115 million in 2015, a YoY growth of 27.7%

• Global revenues in 2015 reached $325 million, a growth rate of 67.4%. North America accounted for $121 million of this.

• In 2019, esports revenues will have surpassed $1 billion and the audience will have grown to 435 million worldwide.

• Trends behind esports are redefining the DNA of future successful games and provide new opportunities for game companies big and small.

90MILLION

131MILLION

180MILLION114

MILLION

125MILLION

165MILLION

2014 2015 2016

OCCASIONAL VIEWERS

ENTHUSIASTS

115MILLION

111MILLION

2019

YoY+13.3%

YoY+11.2%

CAGR2014-2019

+11.2%

THE EXPLOSIVE GROWTH OF ESPORTS

THE GROWTH OF ESPORTS | CASUAL GAMES ASSOCIATION 3

THE GROWTHOF ESPORTS

The combination of increasingly sophisticated and immersive gaming experiences, streaming technologies and social media platforms is transforming the video games industry. The personal gaming experience is being supplemented or even replaced by a community experience, and moving from personal entertainment to spectator sport.

This shift in consumer behavior is creating new and exciting opportunities all along the gaming value chain, from the way games are developed and commercialized to enabling gamers themselves to monetize content streamed via their own channels and to their own audiences.

These underlying trends that are driving the growth of esports are redefining the DNA of games and digital media as a whole and accelerating the disruption of traditional media.

Esports Trends Are Redefining The DNA of Games

Esports Revenue Growth 2014-2019 | Global


BUSINESS1. Games as a service2. Cross-screen entertainment

TECHNOLOGY3. Creator & live streaming tools4. Video platforms & communities

CONSUMER5. Creation & Involvement6. Consumers entertain consumers

The coming year will see the Esports Economy grow to $463 million, a year-on-year growth of 43%. North America will strengthen its lead in terms of revenues with an anticipated $175 million generated in 2016. China and Korea together will represent 23% of global esports revenues, totaling $106 million in 2016.

The market will continue to experience rapid growth, crossing the $1 billion mark in 2016.

Six Trends Behind Esports Growth

$194MILLION

$463MILLION

$1072MILLION

MEDIA RIGHTS, MERCHANDISE & TICKETS, ONLINE ADVERTISING, BRAND PARTNERSHIPS, ADDITIONAL GAME PUBLISHER INVESTMENT

$325MILLION

2014 2015 2016 2019

CAGR2014-2019

+40.7%

YoY+67.4%

YoY+42.6%

4

Average Spend Per Fan GrowsComparing esports and traditional sports makes sense to a certain extent. As the Esports Economy matures, draws more advertisers and increases its merchandise and ticketing revenues directly from consumers, the average annual revenue per fan will continue to rise toward that of traditional sports.

This coming year, we anticipate $3.5 per fan, still almost five times lower than that of basketball ($15 per year) but up from $2.2 in 2014. Using a conservative scenario, we estimate the annual average spend per esports fan will reach around $6.0 by 2019.


Esports Revenues Per Enthusiast | 2012-2020ESPORTS GROWTH SCENARIOS: REVENUE PER ESPORTS ENTHUSIASTBased on Annual Average Revenue per Enthusiast

$0.19Bn

$0.46Bn

>$1Bn

90M 131M 180M

$3.5

$6.0

$2.2

$1.0Bn

>$2Bn

$11

$7.6

ALTERNATIVEOPTIMISTICSCENARIO

REPORTSCENARIO

TOTAL ESPORTSREVENUES

TOTAL ESPORTSREVENUES

AVERAGEREVENUE PERENTHUSIAST

2014 2016 20172015 2018 2019 202020132012

GLOBAL NUMBER OFESPORTS ENTHUSIASTS

Source: Global Growth of Esports Report Premium | January 2016 | www.newzoo.com/esportsreport© 2016 Newzoo

38%Of global revenues in 2016 come from North America with 23% from China & South Korea

44%Of the esports audience In 2016 comes from APAC

$20

$15

The average annual revenue per fan of the NBA

The average annual revenue per fan of basketball


Events at the Heart of the Esports

There were 112 major esports events in 2015 and they generated an estimated $20.6 million in ticket revenues. In terms of the number of events, North America dominated by hosting 37% of all events. This amounted to 42 events throughout 2015. Western Europe followed, hosting 18% of all events. MLG, ESL and Blizzard were the organizers behind the majority of North American events. Dota 2 and CS:GO are the most played games at tournaments.

Once again, the biggest prize pool belongs to The International, which topped $18.4 million, with just $1.6 million coming from Valve. The Frankfurt Major, also Valve’s event, awarded Europe’s largest prize pool: $3 million.




Number of Major Events & Ticket Revenues | Per Region | 2015

Global Growth of Prize Money | 2005-2015

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

NUMBER OF MAJOR EVENTS & TICKET REVENUESSplit Per Region | 2015

NAM W-EU E-EU CHINA S. KOREA REST APAC LATAM MEA

37%

18%12%

11%

8%

8%

2%4%

112events

35%

36%

11%

10%5%

0%2%

$21Mticket revenuesticket revenues



37%

18%12%

11%

8%

8%

2%4%

112events

35%

36%

11%

10%5%

0%2%

$21Mticket revenues



37%

18%12%

11%

8%

8%

2%4%

112events

35%

36%

11%

10%5%

0%2%

$21Mticket revenues



37%

18%12%

11%

8%

8%

2%4%

112events

35%

36%

11%

10%5%

0%2%

$21Mticket revenues



37%

18%12%

11%

8%

8%

2%4%

112events

35%

36%

11%

10%5%

0%2%

$21Mticket revenues



37%

18%12%

11%

8%

8%

2%4%

112events

35%

36%

11%

10%5%

0%2%

$21Mticket revenues



37%

18%12%

11%

8%

8%

2%4%

112events

35%

36%

11%

10%5%

0%2%

$21Mticket revenues



37%

18%12%

11%

8%

8%

2%4%

112events

35%

36%

11%

10%5%

0%2%

$21Mticket revenues



37%

18%12%

11%

8%

8%

2%4%

112events

35%

36%

11%

10%5%

0%2%

$21Mticket revenues

major events

31%

+3.1%

SHARE MOBILEREVENUES

REVENUES CAGR2014-2018

REVENUES

$3.6M $4.4M $6.1M $6.4M $3.5M $5.2M$9.7M

$13.1M$19.8M

$36.0M

$61.0M+70%

YoY

6

Reaching a Valuable Audience


Source: Newzoo Consumer Insights

50% Of Enthusiasts have a high income vs. 34% of the total online population

62% of Enthusiasts participate in team sports vs. 47% of Occasional Viewers

65% of Enthusiasts participate have a full-time job vs. 48% of the total online population

23%

38%11%1%

7%

16%

7%

115MILLION

F10-20

F21-35

F36-50

F51-65

M51-65 M36-50M21-35

M10-20

1%

Esports entertains a young and desirable demographic with males aged 21-35 representing 38% of the Enthusiast audience. The majority of the audience has a full-time job and a higher average income. This group is also more likely to be spending big on mobile games with 8% of Enthusiasts classed as big spenders. Proof that the esports is a trend relevant to all segments of the games industry.

ONLINE POPULATION OCCASIONAL VIEWERS ESPORTS ENTHUSIASTS

56%

29%

12%

3%

38%43%

16%

3%

26%

39%

27%

8%

Nothing Minor Spenders Average Spenders Big Spenders

Spending on Mobile Games | Global | 2015

Age/Gender of Esports Enthusiasts | Global | 2015


China boasts both the largest esport audience and the largest mobile games market in the world. Perhaps unsurprisingly then, it has become a leader in the mobile esports or competitive gaming scene.

Chinese game companies launched more than 30 competitive mobile titles last year and in December 2015, 24% of top 100 grossing mobile games on Chinese Android stores were esports games. Many mobile esports tournaments were organized throughout the year with millions participating both on and offline, making mobile esports the most discussed topic in Chinese game industry last year. The highest prize money so far was recorded as 1 million RMB ($150k) for the national champion of Tencent’s League of Kings.

Mobile Esports: China Leads Surge

Source: Newzoo/TalkingData China Mobile Games Market Monitor


Top Android Esports Titles in China by Downloads | Dec 2015

Game Titles GenreHappy Lord CardsGunZ Dash Casual (Parkour)

League Of Kings MOBASpeed Up Casual (Parkour)

Wefire FPSQuan Min Chao Shen MOBA

Thunder Fighter FPSTian Tian Xuan Dou Action

We Shoot FPSKing of Fight ActionLong Craft Action

You Long Ying Xiong Action

League of Kings holds #1 on Android’s Top Grossing Ranking.

1.3 millionViewers of the final of Netease’s Fantasy Westward Journey 2 tournament.

Mobile Esports Games by Publisher | Android | Dec 2015

Tencent

50%

Netease

8%

Other companies

42%

24% of Top 100 Grossing mobile games on Android in Dec 2015 were esports titles

Tencentis the dominant

esportspublisher

ABOUT THE CASUAL GAMES ASSOCIATION

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critical portion of the success of your company and the industry as a

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industry professionals, members of the press and service providers

around the globe.

Learn more at http://www.cga.global

For press inquiries, please email [email protected]

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About NewzooNewzoo is an innovative global market research and predictive analytics firm with a primary focus on games. Newzoo provides its 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 and works for the majority of top 25 public companies by game revenue.

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THE EXPLOSIVE GROWTH OF ESPORTS - .GLOBAL ...cga.global/research/CGA_Newzoo_Esports_Growth_2016.pdfGlobal Esports Audience Growth 2014-2019 Source: Newzoo 2016 Global Esports Market