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Brand Investment In Esports To Reach US$844 Million In 2020

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rand investment in esports, through advertising and sponsorship, is set to rise 9.9% worldwide to US$844 million in 2020, according to WARC’s latest Global Advertising Trends report.

The report also projects the value will surpass US$1 billion in 2022, claiming the suspension or cancellation of traditional live sports due to COVID-19 has put esports even further into the spotlight.

Despite the growth, the report states in 2019, esports grew by 20.9% to US$768 million, but seems to have reached a steady growth position now, after topping 50% growths in the three years prior.

The majority of the brand investment is from the sponsorship side, with US$615 million spent on sponsoring the tournaments, teams, or individual competitors.

The remaining US$229 million will be spent on spot ads during esports broadcasts, totalling a 1.7% rise, despite traditional TV advertising spend set to fall by 13.8% in 2020.

This data is supported by the leading streaming platform, Twitch, seeing an increase in consumption of gaming content in April of 63.8% compared to March, topping 1.6 billion cumulative hours.

This figure of consumption is more than double that of Twitch’s competitors in YouTube Gaming, Facebook Gaming, and Mixer, who all still saw rises in consumption due to COVID-19, but not to the same level as Twitch.

WARC stated esports is nearing a billion worldwide viewers, with nearly one in three people in Asia reportedly watching professional gaming, compared to 20% in Latin America, 14% in Europe and MEA, and 13% in North America.

WARC Data managing director, and author of the report, James McDonald, said streaming is the new norm for young people around the world.

“Streaming is the new prime time for much of Gen Z, and Mixer’s shuttering this month served only to highlight the stranglehold Twitch has on the market,” McDonald said.

“Tencent may prove a challenger in the US with Trovo this year, but it has a great deal of catching up to do, along with Facebook and YouTube.

“Competitive gaming is big business in Asia, where Tencent is already king, though traditional sports fans in the West are yet to be wooed, with existing audiences instead consolidating during lockdown.

“A great deal of merger and acquisition activity, especially around media rights within esports is expected in the short term as investors vie for control of potential windfalls,” he said.