So-called eSports tournaments are reaching audiences of tens of millions:
Last year’s League of Legends championship, for example, drew nearly 30 million viewers, putting it in line with the combined viewership of the 2014 MLB and NBA finals, or the series finales of Breaking Bad and Two and a Half Men, plus the Season 4 finale of Game of Thrones. As with most sports, competitive gaming is now firmly entrenched in the US college system. The country’s largest collegiate league counts more than 10,000 active players, some of whom are on full athletic scholarships. Eager to capitalize on growing interest in the sport, Major League Gaming (MLG) opened the first dedicated domestic eSports arena in October 2014, and major brands such as Ford, American Express and Coke have begun forming partnerships with game developers, teams, players, event organizers and video distributors. What’s more, the US Department of State has been issuing athlete visas to competitive gamers since 2013.
In March 2015, Twitch averaged more than 600,000 simultaneous viewers, reached an audience of 51M worldwide and delivered more than 26B minutes of video entertainment. On a domestic basis, 11B minutes were watched in March – representing roughly 14 hours for each of the 13M American viewers. This consumption is so great that Twitch is already larger than 70% of American television networks, as well as Amazon’s own OTT video service.
However, the value of this consumption isn’t just its magnitude. An estimated 70% of all viewers are under the age of 35, making Twitch’s audience both highly valuable to advertisers and hard to reach via traditional television. Moreover, eSports fans, unlike linear TV viewers, are highly engaged in the content. Major League Gaming, for instance, consistently beats the industry average on key digital ad metrics such as completion rates (90% vs. 72%), click-through rates (4% vs. 2%), and ad viewability (99% vs. 44%). What’s more, Twitch shows little sign of slowing down. Total minutes delivered (both domestic and abroad) have grown by an average of 7% each month for the past three years, while per viewer consumption has doubled over that same period.
Despite ever-growing consumer interest and potential, eSports are still far from becoming an industry. In 2014, eSports generated less than $200M in revenue worldwide, including sponsorship, advertising, licensing, ticket sales and game-publisher investment according to Newzoo. By comparison, the US-only NFL and MLB gross roughly $10 billion a year each, while the European professional soccer/football leagues generate close to $21 billion.
Even as eSports tournaments have proliferated and audiences have expanded into the millions, the value of these tournaments continues to languish. The average event offers only $18,000 in total prize winnings (a figure almost unchanged from 1998) and 2014’s 1,990 tournaments handed out a relatively unimpressive $35M collectively. The largest prize pool did surge in 2014, from $3M to $11M, but only five players made more than $1M during the year. The remaining 6,200 e-athletes took home an average of $7,000.