Source: Newzoo

We recently provided our clients with the Quarterly Esports Update for September 2017, which is part of their subscription to our Global Esports Market Report service. Following analysis of our most recent data, research, and actuals from players in the market, we updated our global and regional esports revenue estimates for 2017 and our forecasts toward 2020.

We now expect the global esports market to generate $660 million in 2017, a 34% growth year on year. This is slightly lower than our January estimate of $696 million. Our base projection for 2020 remains largely unchanged at $1.5 billion. You can find our updated estimates in the graph below, as well as all our latest figures on our resources page.

The small downward correction for this year is based on a combination of factors. The events and leagues owned and organized directly by publishers are generating less revenue from direct advertising and sponsorship than anticipated. Additionally, the Overwatch League (OWL) and sports leagues such as NBA 2K ELEAGUE were delayed until 2018. The lower sponsorship revenues from publisher events were partly offset by higher-than-anticipated revenues generated by esports teams, particularly through direct brand sponsorships.

With the number of viewers esports attracts, there is no doubt it will grow to a multi-billion-dollar industry in the coming years. The only question is at what pace this will occur. After an initial growth phase, the overall structure of the esports industry has become clear. However, business models aimed at increasing revenues per entertained consumer are still being tested. As the growth of the industry largely depends on improving the monetization of fans, the pace of growth will depend on the success of new leagues and events that look to sell media rights and sponsorship deals for the entire league at once. Local and challenger leagues are a second crucial component required to tap into the local marketing budgets of sponsors.

Esports is an important element affecting the growth of the games industry, as we discussed in a recent post. In an upcoming article, we will discuss these esports-specific factors in depth.