Ovum's updated Esports Revenue Forecast: 2018–23 forecasts that total esports revenue will reach $2.2bn in 2023, a CAGR of 18.2%, as the discipline maintains its ferocious momentum of the past few years. In 2018, more than 35% of total revenue derived from sponsorship, cementing the revenue stream's pre-eminent position in 2023. However, sponsorship's share of the total in that year will have been gradually eroded to 32% as media rights in particular makes the largest inroads. The combined streams of consumer revenue, from ticket sales and contributions to esports compendiums or battle passes, will more than double to $453m in 2023, from $220m in 2018.
There have been major developments in the past 12 months, with a more professionalized structure being brought to the highest echelons and major investment even in the amateur space. Meanwhile, with 5G around the corner, numerous telcos have sensed an opportunity to transform their position in the value chain via a long-term commitment. Discovering where to most profitably invest is the key question, making a detailed understanding of the market imperative.
The consumer angle – ticket prices hit new highs for top events
The 2018 edition of The International, the premier competition for esports title Dota 2, took place in Vancouver's 19,000 capacity Rogers Arena in August 2018. Tickets for the midweek sessions were priced at C$125 ($96), while the finals were priced at C$250. Cheaper tickets than the latter figure were available for the Rolling Stones' most recent tour or the 2018 FIFA World Cup Final. Furthermore, consumer contribution to tournament prize pots and Battle Passes, a revenue stream pioneered by The International, totaled around $100m, a new record for the event. This was a hefty contribution to the $220m in combined esports revenue earned from consumers in 2018, up from just $54m in 2014.
In 2018, arenas or other spaces designed specifically for esports were opened in Las Vegas, London and Arlington, TX. Madrid and Vancouver are among those set to follow. Although as an esports-tailored version of the microtransactions that power their games' profitability, consumer contribution revenue will probably always be gobbled up by game developers, ticket sales are rapidly becoming an attractive revenue stream in their own right, and therefore the leveraging of physical assets is increasingly worthy of consideration.
Sporting organizations and franchises' embrace of esports continued apace in 2018 for a variety of reasons, and the promise of revenue from hosting events at their arenas is one of them. The forthcoming esports competition space in Madrid forms part of future plans for the stadium of one of soccer's most storied teams, Real Madrid. AEG, owner of the Staples Center in Los Angeles and London's O2 Arena, has also been alert to opportunities in this space, having signed a five-year joint venture with major esports operator ESL in September 2016. There is $80m growth in ticket sales revenue to play for between 2018 and 2023, equating to a 17.2% CAGR even before merchandise and other on-site revenue streams are considered. When compared to the slow but steady rises seen in the cinema or live music spaces – not to mention the flatlining or worse attendance figures from sports leagues such as the NFL or MLB – this is a market offering growth well in excess of other entertainment destinations.
This is an abridged version of Ovum's Esports Revenue Forecast Report 2018–23, which derives its data findings from Ovum’s Esports Revenue Forecast 2018–2023. The data covers five revenue lines – media rights, sponsorship, streaming advertising, ticket sales and consumer contribution – from 2014 to 2023. There are breakouts for 20 countries plus rest-of-region wraps to produce a global total.
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