KEY POINTS

  • The number of esports fans globally is anticipated to climb 59% over the next five years, but there’s still significant room for growth. We predict that 600 million consumers globally will watch esports in 2023, up from 378 million in 2018. Meanwhile, there are over 2.2 billion active gamers globally, indicating a high ceiling for the esports fan base.
  • This expansion will be driven by many factors, including investment from traditional sports leagues, a higher number of broadcast deals, and the growth of the mobile-based esports scene. The NFL and the NBA have each launched organized esports tournaments, Disney and Twitter have each struck esports broadcast deals, and a high-profile mobile gaming league launched this August. These moves are likely to broaden the audience by simultaneously exposing unfamiliar consumers to esports and increasing its appeal among noncore audience segments, like casual fans and female gamers.
  • Esports growth will likely hit a few snags along the way, the primary concerns being match-fixing, Olympics exclusion, and the repeal of net neutrality rules. Match-fixing is a concern in the esports world, registering as the highest risk to industry growth, according to a July 2018 survey by Foley & Lardner. The vehement exclusion of esports from the Olympics will also handicap growth, as it will miss out on the competition's massive global reach. Finally, the repeal of net neutrality could allow ISPs to charge extra for access to certain high-bandwidth websites, like streaming site Twitch, which is a hub of esports viewing and currently free to use. 
  • Competitive gaming's global popularity and increasing interest from high-profile actors are enough for us to remain confident that the audience will continue expanding, despite these speed bumps. Moreover, data suggests Gen Zers are more receptive to nontraditional sports, like esports, than traditional sports — 56% of US Gen Z men (aged 13-21) said nontraditional sports are "relevant to my generation," while just 44% said the same for traditional sports, per a 2018 report by Whistle & Cassandra. Young people will be paying attention to esports for a long time, and in increasing volume.
  • Brands are taking notice of the burgeoning space — global esports advertising and sponsorship revenues are forecast to grow 24% and 53% year-over-year in 2018, respectively. In 2018, global esports advertising revenue [...]