ESPORTS

2016

2016 GLOBAL

ESPORTS
MARKET REPORT

TRENDS, REVENUES
& AUDIENCE
TOWARD 2019
 ESPORTS 2016 CONTENTS

1. Introduction, Scope & Definitions 3

2. Global Esports Trends 11
3. Esports Events 23
4. Global Esports Audience 2015-2019 29
5. The Esports Economy & Key Players 44
6. Global Esports Revenues 2015-2019 58
7. Value of the Audience & ROI 67
8. Methodology 73
9. Appendix 76

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INTRODUCTION
1.1 2015 WAS ANOTHER GROUND BREAKING
YEAR FOR THE ESPORTS INDUSTRY
This was another huge year for esports with
the industry garnering an increasing amount
of attention from press, publishers,
broadcasters, investors and advertisers
alike. Following the huge interest in last
year’s Global Growth of Esports Report, we
are back with the second edition. To keep
up with the rapid developments in the
space, this annual report has evolved into a
service that also includes quarterly updated
reports and a dataset with granular
audience and revenue figures. 2015 also saw
many generalist research companies jump
on the esports phenomenon.
ESPORTS 2016 INTRO
As a company, we always aim to be ahead
of the curve on trends that impact the
games market and, in this case, the media
landscape as a whole. Looking back, our PC
Gaming. Power to the People report,
published in 2013, kicked off our focus on
esports. Our esports intelligence now
includes consumer research in 27 countries
and the Esports Audience and Revenue
Model that has grown in data sources,
industry support and granularity ever since.
Peter Warman
CEO Newzoo
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 ESPORTS 2016 INTRO

1.2 SCOPE OF THE REPORT

AUDIENCE & REVENUE SCOPE & DEFINITIONS

This report aims to give a reliable and realistic overview of the current status and future of
esports. Multiple data sources were used in shaping the Global Esports Audience and
Revenues model, one that is continually updated. When it comes to audience, we have taken
viewers of (online) amateur leagues and championships into account, but limited the Esports
Enthusiasts numbers to the frequent viewers and active participants. For revenues, we have
focused only on the professionally organized esports teams, leagues and events.

ESPORTS ESPORTS ECONOMY

Competitive gaming in an organized
A model that incorporates five key
format; an event or league, organized
components that are not mutually
by a third party, with a specific goal
exclusive: Channels, Publishers,
(i.e. winning a tournament or prize
Leagues, Events and Teams. Revenues
money), with a clear distinction
from Brands and Consumers feed this
between players and teams who are
ecosystem.
competing against each other for a
chance to reach that goal.

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 ESPORTS 2016 INTRO

ESPORTS AWARENESS ESPORTS AUDIENCE

Gamers who have heard of esports, Gamers who watch and/or participate
including both the group of gamers who in esports.
are aware of esports but no longer view
it and the Esports Audience.

ESPORTS ENTHUSIASTS OCCASIONAL VIEWERS

Gamers who watch esports more than Gamers who watch esports less than
once a month and/or participate in once a month.
(amateur) esports leagues.

MOBA
Multiplayer online battle area, a game
genre that includes League of Legends,
Dota 2 and Smite.

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ESPORTS 2016 SUMMARY ESPORTS 2016 INTRO

1.3 KEY TAKEAWAYS

NORTH AMERICA LEADS THE CHARGE IN
REVENUE GROWTH

• There were 112 major esports events in 2015 and they generated an estimated $20.6
million in ticket revenues.
• The total prize money of all esports events held in 2015 reached $61.0 million, a 70%
year-on-year increase.
• The global Esports Audience was 226 million gamers, a YoY growth of +11.2%, 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 YoY growth rate of 67.4%. North
America accounted for $121 million of this.
• Online advertising was the fastest growing revenue segment, up 99.6% on a global scale
compared to 2014.
• The average revenue per Esports Enthusiast was $2.83 in 2015.

ESPORTS AUDIENCE GROWTH ESPORTS REVENUE GROWTH

2014, 2015, 2016, 2019 | GLOBAL 2014, 2015, 2016, 2019 | GLOBAL

OCCASIONAL VIEWERS MEDIA RIGHTS, MERCHANDISE

& TICKETS, ONLINE
ENTHUSIASTS ADVERTISING, BRAND
PARTNERSHIPS, ADDITIONAL
GAME PUBLISHER INVESTMENT

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 ESPORTS 2016 METHODOLOGY

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 ESPORTS 2016 METHODOLOGY

AUDIENCE MODEL 2.0

NEWZOO’S APPROACH & METHODOLOGY

We have vastly improved our esports viewership model from our last report. The new model
uses a number of different inputs and checks. But how does it work? Our esports audience
numbers are estimated using a unique top-down and bottom-up approach. Our Global
Games Market Report model tracks and projects population figures, economic growth,
company financial performance and numerous other growth-related KPIs across 130
countries. Parts of this model and its KPIs are used as top-down view in the esports
audience and revenue model.

Next, our annual consumer research gives us insight into the exact degree of esports
engagement across 27 countries across all major regions of the world. Specifically, we ask
respondents whether they are aware of the esports phenomenon, and if so, whether and
how often they watch or participate in (professional or amateur) esports. This allows us to
size the Esports Audience within a country, as well as distinguish between Esports
Enthusiasts – those who watch or participate in esports at least once a month – and
Occasional Viewers. This also provides insights into the popularity of esports across the
different global regions.

However, consumer research is not enough and extrapolation needs to be approached

cautiously. What people understand to be esports differs tremendously between cultures,
and different socio-economic circumstances can make it difficult to get an accurate
understanding of the average individual in less developed regions. Therefore, we match our
estimates with actuals from the traffic of popular streaming websites such as Twitch, Azubu
and Zhanqi. Where needed, regions are adjusted, but always within the bounds of either our
consumer data or our streaming sites data.

As a result of these extra checks, we have made some adjustments in comparison to our
previous report. More specifically, we have lowered our audience numbers in the Middle
East, Latin America and China due to a large discrepancy between our consumer research
and actuals from streaming sites. Meanwhile, Western Europe, Eastern Europe and Oceania
audience numbers have been boosted to reflect the incredible amount of traffic originating
from these regions. In order to forecast this data until 2019, our model creates trends based
on our historic and current consumer and streaming data. Each quarter, we reevaluate the
data and adjust the forecast if it proves necessary.

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 ESPORTS 2016 METHODOLOGY

REVENUE MODEL 2.0

NEWZOO’S APPROACH & METHODOLOGY

We have also expanded our revenue model. We have worked on feeding more actuals into
the model, allowing us to build up revenues from a granular point of view, and provide
opportunities to verify growth rates every quarter of the year. Firstly, our regional divisions
are clearer and more isolated. We have split up “Rest of West” into Europe and Latin
America, allowing a more direct comparison of North American and European Revenues.
“Rest of East” is now Middle East & Africa, Oceania and the rest of the Asia-Pacific countries,
and will be further split in later updates.

For Merchandise & Tickets, we keep a record of as many esports events in the world as
possible. For these events, we calculate the amount of tickets sold, the price point of an
(average) ticket, the location, game, prize money and many other variables. To generate
regional ticket revenues, we simply add the ticket sales and multiply them with the average
ticket price of the event. Data points on merchandising is gathered from our partners. The
results presented in this report already show that ticket sales across Europe ($15.3M) are
much higher than we had anticipated last year, and even higher than ticket sales across
North America.

In terms of Online Advertising, we have made two advancements. Firstly, our audience
model now doubles as an input for this model. By providing the share and growth of the
Esports Audience, we have a clearer picture of where the advertising income is being
generated. This data is combined with regional differences in CPM to provide more informed
online advertising estimates. Secondly, we have been pulling data directly from streaming
platforms, allowing us to compare their growth both in terms of unique users and total hours
watched.

For Brand Partnerships, we keep a record of the highest performing teams and the
sponsorships these teams have attracted, while our partners provide us with information
about the average worth of these sponsorships. Meanwhile, Media Rights and Additional
Game Publisher Investment will continue to be monitored through insights

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