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Esports from the inside: an analysis of the esports economy
Esports as a gaming direction appeared about 18 years ago.
Since then, it has received a much stronger development than expected, and the prize funds have grown from tens of thousands to millions.
In this article, we will study the results of the past year and the prospects for the next few years.
25
19: 40, February 26 from Swen
Full material:
Esports from the inside: an analysis of the esports economy
Esports as a gaming direction appeared about 18 years ago.
Since then, it has received a much stronger development than expected, and the prize funds have grown from tens of thousands to millions.
In this article, we will study the results of the past year and the prospects for the next few years.
Esports functions as a large organism.
We will divide the article into 3 parts, but it is worth considering that they are all interrelated.
In the first of them, we will consider the state of esports today, and the next two parts will explain the cause and effect relationships and explain the development process.
Looking behind the esports curtain...
In 2015, the turnover of the esports market amounted to almost 747.5 million dollars.
The bulk of the money turnover is accounted for by sponsorship and advertising.
All this is quite logical, because hundreds of thousands and millions of viewers watch the world finals of leading disciplines, especially at major premium events such as WCS, The International 5 and others.
Therefore, the largest companies, one way or another connected with the gaming industry, are fighting for advertising places at leading tournaments.
All this attracts additional investments.
Funding for esports startups in 2015 reached $ 150 million.
Also, the betting direction is intensively developing in cyber sports.
Betting sites such as Unikrn, Draftkings and FunDuel receive multimillion dollar investments.
As you can see from the graph, they almost make up 7% of the turnover for 2015, which is even more than the share of prize funds at the leading tournaments.
Direct revenues in esports over the past year amounted to $ 170.2 million (23% of the annual turnover).
According to assumptions, this indicator will grow by 5 times by 2018.
The income from bookmakers accounts for almost a third of the direct income.
The past year has clearly shown how big organizations are interested in esports.
For example, the Finnish giant Modern Times Group has acquired two of the largest esports organizations in Europe: ESL and DreamHack.
The total amount of the transaction was more than $ 100 million (78 million for ESL and 28 million for DreamHack).
The CIS scene was also not left without attention: Alisher Usmanov's USM Holdings invested in a Russian organization Virtus.pro 100 million dollars.
All this indicates that many of the media and business communities have believed in the future of esports.
Another example of a major investment in esports was the former NBA player Rick Fox, who recently acquired his own League of Legends team - Echo Fox.
In 2015, the financing of tournaments and players reached $ 578 million.
This is only 28% less than the funding of the NBA.
It is also worth noting that among the giants of the gaming industry, almost everyone was involved in the esports sphere in one way or another.
At Electronic Arts, Fifa has migrated to esports, at Blizzard Entertainment, almost all game projects are esports (Diablo is an exception), and Activision last year announced a major Call of Duty league with a prize fund of $ 3 million.
In 2015, Valve set a record prize pool in the gaming industry.
It amounted to $ 18,429,613.
This is due to the fact that 25% of the purchase of the Compendium TI5 tournament kit went to the prize fund.
Valve itself initially announced a prize fund of $ 1.6 million.
Everyone is looking forward to this year: will the prize money become even bigger?
Streaming as an engine for the development of esports
One of the reasons for the development of esports is the increase in the audience.
Since 2008, when the first stream services just began to appear, technologies have significantly stepped forward: Internet channels have become "thicker", and servers have become more powerful.
All this led to an increase in the audience, followed by attention from investors and advertisers.
The audience of esports is constantly and quite naturally growing.
Today it is about 188 million viewers.
According to SuperData Research, this year the esports audience will grow to 238 million people.
In 2015, the esports audience grew by 88%: from 100.6 million (end of 2014) people to 188.3 million .
Esports fans are much like fans in classic sports: 76% of viewers have a favorite team, and 69% of viewers have a favorite player, whom they watch everywhere.
Fans and fans find their superstar, which increases his popularity, and, accordingly, the popularity of the team
This is one of the reasons for expensive esports transfers.
One of the most sensational transfers was the transition of Xiao8, which cost $ 320,000 (the transition from Newbee to LGD).
As for broadcasts, today, the largest stream service is Twitch.tv, and most recently, the organization published statistics for 2015.
For the past year:
More than 240 billion views have been viewed.
The average number of online viewers was about 550 thousand minutes of video.
On August 23, the maximum number of active viewers was registered 2,098,529 people.
Platform statistics: PC: 56% Mobile platforms:35% Console: 7% Other: 2%
Despite the current dominance of Twitch, television is also actively coming to the market.
In the second quarter of 2015, ESPN announced the broadcast of Heroes of the Dorm (American League for Heroes of the Storm) on ESPN2.
A program of broadcasting American leagues on CS:GO was also planned.
In addition, other "players" are invading the market of stream sites: hitbox.tv, Youtube, Dingit.tv, Azubu et al.
These organizations are gaining popularity by acquiring the rights to broadcast tournaments or motivating organizers to use their stream services through sponsorship.
Such an experience of broadcasting was at one of the last DreamHack tournaments, where the owners sold the rights to broadcast the tournament to an Austrian organization hitbox.tv.
This gives a good boost to the streaming platform, but there was a conflict of interest: most are used to the most common Twitch sites.tv and Youtube.
It is worth noting that despite the recent entry into the market, Google still managed to get ahead in some aspects, and perhaps it is Youtube Gaming that is the platform of the future.
Youtube is the most popular streaming platform on mobile devices in the United States.
Its share is 40%.
The YouTube Gaming stream service is a relatively new platform.
It opened on August 26, 2015, but this did not prevent it from taking the lead among streaming sites on mobile devices.
Tournaments.
Increasing competition in esports
The popularity of streams, the growth of the audience and financial opportunities lead to an increase in the number of tournaments, as well as prize funds.
It would be more accurate to say that this is a two way communication.
The number of tournaments also affects the popularity of disciplines, and accordingly, by attending tournaments, disciplines find more fans and viewers.
In order to understand how the number of tournaments increased, we will look at the table:
Dota 2 CS:GO LoL StarCraft II 2015 125 300 154 187 2014 106 146 173 182 2013 90 100 160 147
Source esportsearnings.com
Despite a slight decrease in the number of League of Legends tournaments, there is an increase in other disciplines.
This is especially noticeable in CS:GO: the number of tournaments on it in 2015 increased by 2 times!
The prize funds of tournaments are also growing.
Over the past year, there has been a slight decrease in League of Legends, StarCraft II, but a global increase in CS prize funds:GO and Dota 2.
This allows us to openly declare that the most successful esports projects today are in the care of Valve.
Dota 2 CS:GO LoL StarCraft II 2015 31,046,865 5,841,976 7,640,674 2,912,547 2014 16,494,586 1,935,451 7,990,954 3,386,415 2013 4,488,961 1,162,678 6,100,970 3,736,865
Source esportsearnings.com
As we can see, the prize funds of Valve projects have doubled (Dota 2) and tripled (CS: GO).
StarCraft II, in turn, is going through hard times: over the past three years, its prize funds have been decreasing (from 300 to 400 thousand dollars a year), despite the fact that the number of tournaments is growing.
It is difficult to say about League of Legends.
In 2015, the moba game from Riot experienced a slight decline, but everything may also change in the coming year.
In 2012, LoL received a huge development: the prize fund increased almost 10 times (from 490 thousand to 4.2 million).
In addition to major tournaments, regular (weekly, daily) tournaments are being intensively developed on such resources as Faceit, Toornament, XFire.
Online tournament platforms provide an opportunity for esports fans to try their hand at a more serious competitive basis than the ladder system.
The income from small scale tournaments in 2015 amounted to $ 27.7 million, and their popularity is simply off the scale.
Over the past year, more than seven million players have registered for the tournaments.
A striking example of the popularity is Faceit: 1.8 million registered players and 1,500 tournaments every month.
Also, in addition to classical disciplines, others are gradually being pushed in and developed: Call of Duty, Vainglory, StreetFighter, Smite, etc.
Among the described factors, it is difficult to single out one thing, but as a result, the audience has increased significantly over the past year, and it is worth believing that 2015 was the most fruitful for esports over the past 15 years.
And this applies to the prize funds, the number of tournaments and the audience.
Number of tournaments Prize pool ($) 2015 4444 65,017,976 2014 2640 36,697,723 2013 1892 20,486,253 2012 1699 13,464,864 2011 1491 9,938,144 2010 814 5,525,589 2009 562 3,652,611 2008 432 6,353,675 2007 353 6,443,681 2006 299 4,562,399 2005 260 3,807,190 2004 176 2,219,203 2003 114 1,486,174 2002 39 854,003 2001 44 842,806 2000 49 670,505
*(to the prize fund esportsearnings.com not only premium tournaments are included)
One thing can be concluded from all this: today esports is one of the most promising and attractive areas for investment.
In this area, there are great trends for the development of the audience and competition.
Over the past 15 years, the size of the prize fund (annual) has fallen only once: in 2009, after the global economic crisis, and the number of tournaments has continued to grow since 2002.
Statistical data are provided by the analytical agency SuperData Research and esportsearnings.com
2569
19: 40, February 26
from Swen
Best comments
+17
#1 hrabriu.ivan
20: 13, February 26
Luik, if you dreamed of becoming an esports player as a child
Riposte, if you are already so old that your apm barely exceeds 10tku
+1
#13 lettermelater
01: 31, February 28
#12, your article shows a direct correlation between the number of tournaments and prize money on the popularity of the esports discipline :
"The popularity of streams, the growth of the audience and financial opportunities lead to an increase in the number of tournaments, as well as prize funds.
It would be more accurate to say that this is a two way communication.
The number of tournaments also affects the popularity of disciplines, and accordingly, by attending tournaments, disciplines find more fans and viewers."
I just pointed out that in the case of some games (LoL), this does not work.
When there were many tournaments, the game was less popular.
I mean, it's just that the correlation is far from direct in some cases, that's all.
In turn, I completely incorrectly stated my thoughts :
"And to say that esports is developing better for those, and worse for others is completely incorrect. "
There is really not a word about this in the article.
Apologize.
25 comments
+17
#1 hrabriu.ivan
20: 13, February 26
Luik, if you dreamed of becoming an esports player as a child
Riposte, if you are already so old that your apm barely exceeds 10tku
0
#2 grok88
20: 32, February 26
Dota 2 and CS GO from Valve are great, Gaben is out of competition
-1
#3 skippi 22
20: 35, February 26
A little dry analysis
0
#4 Razgibator
21: 00, February 26
#1, and how to repost ?
-1
#5 villi shot
22: 53, February 26
garantmarket.net Fly on the light!
+1
#6 Platinum
00: 47, February 27
Yes, it was necessary to be born 8-10 years later, at least.
Nowadays, apart from Moscow and St. Petersburg, the only worthwhile tournament where you could win something valuable was WCG.
The rest of the tournaments 20 people came, chipped in 100-200 rubles, the winner took half and left.
There are no streams, mass tournaments and support of esports players from sponsors.
It's just that you played because you liked it, and you loved this game
0
#7 GG.Swen
01: 14, February 27
#6, over time, the competition also grows.
0
#8 GhoSTSpark
07: 35, February 27
#1, unfortunately it is:(
0
#9 Platinum
07: 57, February 27
#7, I remember watching the WCG records of 2004-2005 on CS, it feels like some disabled people are playing.
Everything is cooler now.
Competition, everything is fine.
You look at the records of the Olympics of the 70s and 80s and you look now.
That is, what was considered a top at that time is now a warm up for children.
Evolution and development, what to say.
Therefore, it is not the competition that is cooler now, but the game is developing and strategies are changing.
But at that time, with that understanding of the game, the guys played at the maximum.
+1
#10 GG.Swen
10: 22, 27 February (10: 23, 27 February)
#9, I disagree.
Check out WarCraft.
Matches of 2007-2009.
Check out StarCraft bv.
Today's players did not even dream of the control that was demonstrated in bv.
At least, I've never seen anything like it.
I donot remember who, but there was a moment with one of the top toss (like an encore): we need to kill Lura.
He brings a zealot in a shuttle, shoots a river at him (for splash).
While the cockroach is flying, he switches to the main, orders several units in the barracks.
He returns, puts the zealot in the shuttle.
Lura has been killed.
And something like this I have not seen in modern times.
Anyway, the mechanics are cooler than the flash has never been in the history of starcraft.
And so you can give a lot of things as an example.
+1
#11 lettermelater
18: 42, February 27
It is not quite correct to compare the number of tournaments and the number of prize games of Valve and League of Legends games : there are completely different development strategies.
And to say that esports is developing better for those, and worse for others is completely incorrect.
Looking back, before the LCS( and other analogues) for League of Legends, a huge number of tournaments were held , but the quality of the product (stream in essence) fell, and it was at the level only on large lan.
Riot followed the path of overseas sports leagues and did not lose.
At the same time , looking at the growth of CS GO , it seems that Valve's strategy is not worse.
0
#12 GG.Swen
01: 20, February 28
#11, in the sense of better?
What is this all about?
No one says what is better or worse.
The conclusion of the article is unambiguous development, etc.
No one was going to compare development strategies either, but one thing is unambiguous more tournaments = development.
More money = development.
More investment = development.
That's actually all.
The article contains the facts that there is more and there is less.
There you can definitely say one thing Starcraft is gradually suffocating.
Regarding LoLa, I specifically noted that this is not an unambiguous statistic, so I did not quite understand this statement
+1
#13 lettermelater
01: 31, February 28
#12, your article shows a direct correlation between the number of tournaments and prize money on the popularity of the esports discipline :
"The popularity of streams, the growth of the audience and financial opportunities lead to an increase in the number of tournaments, as well as prize funds.
It would be more accurate to say that this is a two way communication.
The number of tournaments also affects the popularity of disciplines, and accordingly, by attending tournaments, disciplines find more fans and viewers."
I just pointed out that in the case of some games (LoL), this does not work.
When there were a lot of tournaments, the game was less popular.
I mean, it's just that the correlation is far from direct in some cases, that's all.
In turn, I completely incorrectly stated my thoughts :
"And to say that esports is developing better for those, and worse for others is completely incorrect. "
There is really not a word about this in the article.
Apologize.
0
#14 GG.Swen
11: 44, February 28
#13, well, yes:) I will take into account) I donot know much about the League of Legends in principle, so like this)
-1
#15 eXpulsive
03: 56, February 29 (03:58, February 29)
And where is HS???
The prize money in XC is simply many times higher than the same SK2.
Simply INCOMMENSURABLY Many Times.
CARLA.
-1
#16 Esselta.
Hotspur
13: 55, February 29
#15, read carefully.
An article about esports.
-1
#17 eXpulsive
20: 14, February 29 (20:17, February 29)
#16, Esselta.
Hotspur
#15, read carefully.
An article about esports.
HS = Esports, my young inexperienced fan.
XC - has been an OFFICIAL World class ESPORTS DISCIPLINE for over a year, with worldwide recognition of all international Multigames, as well as Esports Federations around the WORLD.
TO
0
#18 GG.Swen
20: 24, February 29
#17, Yeah.
Although I do not consider CS to be esports, nevertheless, I think the person meant something else.
That the article is not about specific disciplines.
These disciplines are just an example.
I decided to take these disciplines.
0
#19 W e r W o l F
22: 33, February 29
Great article, thank you!
"Alisher Usmanov's USM Holdings invested in a Russian organization Virtus.pro $ 100 million" is just ridiculous.
I shouldnot have mentioned it.
Even in that news it was said that up to 100 million But the main thing is that apart from that news, there are no facts that the money was invested.
I donot see any news about the growth of salaries by dozens of times, about incredible prize tournaments under the auspices of the VP, TV channel, computer clubs, etc .
Either Usmanov forgot about his words the next day, or there was some kind of economic fraud that has nothing to do with esports.
0
#20 GG.Swen
07: 36, March 1
#19, I will reveal a secret: The growth of salaries, etc. is already closed commercial information.
And what facts can you expect if the money was invested quite recently.
Or how do you imagine it: They invest money and salaries grow in a month, and VP begin to invest in tournaments and the construction of a cyber arena?
In addition, this money can be spent on paying for training places and other things, which is also not disclosed.
0
#21 W e r W o l F
21: 59, March 1
#20, $100 million this is 7.5 billion rubles.
Do you really think that so much or at least a tenth of this money has been invested and there is still no information about it?
It seems that you have little (I also, however) do not imagine the scale of the specified amount.
So much money and no result - is this normal?
Well, well
0
#22 GG.Swen
08: 24, March 2
#21, Do you know what Alisher Usmanov owns?
In his scale of 100 million this is an out of pocket expense
0
#23 W e r W o l F
22: 25, March 3
#22, did he tell you this personally over a cup of coffee?
If not, then you should not voice your fantasies.
People are rich because they are rich because they do not throw money to the wind.
Even charity is self promotion.
Yes, and that's not the point.
There is supposedly money here, but there is no result or at least some announcements.
Therefore, questions arise.
0
#24 GG.Swen
15: 13, March 6
#23, I'm just too lazy to explain... the guy owns the control packages Mail.ru, Megafon and Yota.
Also Alibaba, half of the Russian television and a significant part of the shares of the oil industry.
I donot know what else to say.
100 million this is not a waste of money.
This is an investment and he will still get his own.
0
#25 W e r W o l F
15: 14, March 7
#24, why do I need a biography of Usmanov?
In the previous post, you wrote about pocket expenses, and now that this is already an investment?
Make up your mind:)
And once again: we are not talking about amounts and their use, but about the fact that there is an intention, but there are no cases.
Although, now, it seems, the tour has been announced p on the DOTA is large.
But only six months later ...
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