Esports ‘set for £1bn revenue by 2020’

By BBC

Esports will generate more than £1bn in global revenue and almost double its audience to nearly 600 million people by 2020, forecasters predict.

Esports is organised, competitive computer gaming and can be staged in front of a live audience and millions more online.

“It has the potential to become one of the top five sports in the world,” said Pete Warman of esport analysts Newzoo.

French football club Paris St-Germain has created an esports team.

Some English clubs – including Manchester City – employ professional gamers.

Esports generated $493m (£400m) in revenue in 2016, with a global audience of about 320 million people.

Prize money of $93.3m (£76m) was won last year, with the winning team at the League of Legends world championship – the biggest esports event – sharing a pot of $1m (£810,000).

Why are sports clubs buying esports teams?

Paris St-Germain moved into gaming in October, creating its own esports franchise and signing three of the world’s leading gamers.

PSG wants to establish the team in one of esports’ most iconic games – League of Legends – as the club tries to raise its global profile, particularly targeting the US and Asian markets.

As part of State of Sport week, BBC Sport was given behind-the-scenes access to PSG’s gaming house.

“Esport for us is a way to find a new fan of the brand, not necessarily focus on the soccer,” Fabien Allegre, PSG’s director of merchandising and brand diversification, told BBC Sport.

“The idea is to bring the club to a large number of people who don’t know anything about football.”

Manchester City and West Ham have already signed players of the Fifa football game to represent them, but no British club has set up a dedicated esports team.

Allegre believes it is the “future” for football clubs and predicts the creation of an online Champions League-style competition between clubs that own esports franchises.

“It’s more than a marketing stunt,” says Warman. “Football clubs see this opportunity as a strategic part of their franchise. Sports clubs are now dependent on revenues that come from areas outside of their league so this is their marketing objective.

“They are only dipping their toes into it right now but their expectations are long-term and very large.

“Esports is completely global, with hundreds of millions of viewers, so it would take their brand across the globe.”

Where is the money coming from?

Sponsorship is the biggest revenue stream in esports, bringing in much more than is raised by the media, advertising, merchandise and ticketing.

Newzoo predicts income will treble in the next four years, valuing esports as a $1.49bn (£1.21m) industry by 2020.

“The reason companies are investing in this is because they want more eyeballs and time to promote their product so people will spend more money on their games,” said Warman.

“Gaming has been the favourite pastime of the younger generation for a long time and esports branching out to live events is like becoming comparable to [traditional] sports.

“Brands now have a way to reach this audience that previously was so hard to reach, because gaming is transforming into something they understand. They can sponsor it and advertise so brands and other companies are jumping on this like crazy.

“We are going to see a lot of parallels that we see now in sports and that will take it to the next level.”

So how big can esports get?

“Considering an audience of about 160 million is watching esports frequently and another 160 million watch big championship games, it already compares to medium-tier sports,” says Warman.

“So it can match the size of, say, tennis and field hockey, while it’s also coming very close to basketball and the audience size is becoming very comparable to individual sports.

“In terms of revenue, it is still dwarfed by sports but it is only a question of time to when that will change.

“If you see it as an individual sport it has the potential to become one of the top five sports in the world. That will take maybe five years.”

Who are esports fans?

“Young digital natives are not really into sports,” claims Warman. “The majority of these esports enthusiasts are aged between 20 and 35.

“That is quite surprising because you would expect teenagers to be the majority figures in this group. But the viewing audience is generally older.

“When it comes to gender, there are more women that watch esports than you would expect – about 25% of that audience is female. That may surprise people who think gaming is for a predominantly male audience.”

According to Newzoo, in 2016, the total esports audience in the UK reached about 6.5 million, with 3.1 million esports enthusiasts. The vast majority of these are males (69%) and aged 21-35.

BBC Sport was also given access to the Intel Extreme Masters in Katowice, hosting the world championships in Counter-Strike: Global Offensive (CS:GO).

“Fans of esports are normal guys,” one spectator told BBC Sport. “Everyone has some hobbies in their real life, not only playing.

“Sports have an older public. My dad never watches Counter-Strike, but I’m never watching tennis or something that he likes.”

Another fan said: “Esports is a new experience, especially for younger people to see their heroes in real life.”

Will UK clubs follow PSG’s example?

Diego Gigliani runs Manchester City’s esports team as the senior vice-president for media and innovation for the City Football Group.

Keiran ‘Kez’ Brown is City’s professional Fifa player, with the club feeling a football game is a more “authentic way” of moving into esports.

“We can’t overlook the fact the way we are participating in esports is in a relatively small space compared to the actual category of esports,” says Gigliani.

“The real big esports titles are things like League of Legends, DOTA 2, Counter-Strike, and that’s where the massive audiences are going to – that’s where people see the commercial opportunities.

“Have we considered those spaces? We have. We’ve felt that for the time being the right place to start was with Fifa and see how much we learn and where that takes us next.”