The 2020 esports revenue estimate has been revised from an initial $973.9 million to $950.3 million globally, according to gaming market intelligence firm Newzoo. The adjusted revenue number is mostly attributed to the ongoing situation with the COVID-19 pandemic, after many of this year’s esports events have been either postponed or canceled.
Esports Revenue: $950 million in 2020
The impact of the COVID-19 pandemic has canceled many esports events that involve in-person activities. While many of these events have transitioned to an online environment, key revenue drivers like ticket and merchandise sales have been affected. Unlike a physical tournament, fans are no longer making impulse purchases of merchandise due to event excitement. As such, Newzoo has revised its 2020 forecast for this segment from $76.2 million to $52.5 million — a 50.3% decrease from the prior year.
However, the esports audience and viewership has not taken the same downward shift. Riot Games’ League of Legends Championship Series (LCS) and League of Legends European Champions (LEC) summer split matches have seen increases of 16.7% and 30% respectively when compared to the spring split. The market research firm notes that the summer split has usually seen a 20 – 30% decline in viewership instead.
Newzoo: Digital +60.9% YoY
The early digital shift has also enabled companies to find new outlets to recoup revenue streams. Sponsorship estimates are up 7.5% year-over-year (YoY) to $584.1 million and media rights up 3.3% YoY to $163.3 million. Digital has increased 60.9% YoY to $21.5 million and streaming up 44.9% YoY to $19.9 million. Despite this improvement, restrictions on international travel have resulted in limitations in competition for titles like Counter-Strike: Global Offensive and Dota 2.
The recovery of sponsorship and media-rights revenues is dependent on when the ongoing COVID-19 situation will be resolved. Do you think more esports leagues will follow traditional sports and establish bubbles for competition in the meantime? Let us know about your opinion, and keep up with Daily Esports for all of your esports business coverage.