How the business of gaming is evolving

By now, it has become clear that the phenomenon of esports is not just hype but a global industry that is here to stay. Although COVID-19 has temporarily ended in-person esports events, the crisis has shown that their popularity has not just endured but grown. Many leagues are continuing their formats online, and Counter-Strike: Global Offensive (CS:GO) hit new all-time player records with more than a million concurrent players in March 2020. Additionally, our German consumer survey shows that participation by heavy users—those who play/consume more than once a week—increased by about 30 percent.

Esports is big and getting bigger:
Esports already has a considerable market size, surpassing many traditional sports in terms of both revenue and viewership. Globally, the industry hit $950 million in revenue in 2019 and is expected to reach $1.1 billion in 2020. Most of the revenue (58 percent) is forecast to come from sponsorships, which grew an estimated 17 percent compared with 2019.5 The esports audience is projected to hit close to 500 million enthusiasts and occasional viewers in 2020. Combined, these numbers reflect more than 15 percent growth in revenue and more than 10 percent in audience size year over year.

Esports differ from traditional sports in many respects, including:
Simulations of “on-the-field” and “on-the-court” sports, like the FIFA or NBA2k video game series, are far less watched than other genres. In 2019, people across the world watched over one billion hours of each of League of Legends and Fortnite on Twitch but only 165 million hours of FIFA.6
New games are continuously disrupting the esports market, and for some, the fan following is immediate. Just nine months after Fortnite launched in September 2017, 125 million people had played, while Apex Legends hit one million players in just eight hours after launching in February 2019 and 50 million players in one month. On April 7, 2020, the closed beta of the new game Valorant launched and was watched for a total of 34 million hours by 1.7 million peak concurrent viewers on this single day.

Not all esports fans are the same:
Who are these esports fans? Age, education, and income demographics suggest that many are about to start jobs with an above-average salary: esports is mostly consumed by young (on average 26 years of age), tech savvy, and highly educated males (over 70 percent),7 making sponsorship an opportunity for a company not only to advertise its product but also to promote its brand as an employer.

The esports audience, however, is not homogenous across games. Brands should assess thoroughly which segment they want to address. In one case, we used artificial-intelligence-driven consumer insights from social-media listening and compared affinity data of esports fans to the overall online population in Germany. This revealed four clusters, in an array that clearly describes distinctive lifestyle interests based on the esports category: