Study: Esports global ad spend to hit US$844m in 2020

Sponsorship outlay to climb 9.9 per cent this year; spending to top US$1bn in 2022.

by Ed Dixon

Study: Esports global ad spend to hit US$844m in 2020
  • US$615m to be spent on sponsoring competitors or esports tournaments
  • 2.9bn people are gaming on smartphones
  • Gaming content ‘eroding the viewing’ of linear TV among Gen Z audience

Global advertising spend on esports is set to rise 9.9 per cent to US$844 million in 2020, according to a study by marketing intelligence service WARC.

The new research forecasts US$615 million will be spent on sponsoring competitors or esports tournaments. A further US$229 million will be spent on advertisements during esports broadcasts, a rise of 1.7 per cent. In contrast, traditional television advertising is set to fall by 13.8 per cent, according to the report.

Esports sponsorship spend is also on course to top US$1 billion in 2022.

Covid-19 thrust competitive gaming into the spotlight while traditional sports were on pause. While WARC states that only three per cent of adults watched esports content for the first time during lockdown, with 55 per cent of all viewers non-committal, the sector is approaching one billion viewers worldwide.

The greatest proportion of new viewers were found in India at 11 per cent, with the United States and United Kingdom each providing just one per cent of that audience. Existing audiences instead consolidated; one in ten watched more esports content than before, rising to 26 per cent in South Korea and 24 per cent for Indonesia.

Uptake is greatest among Gen Z viewers at 27 per cent and stands at one in five among millennials. Data from Limelight Networks shows that Gen Z gamers watch six hours and 19 minutes of esports content a week on average, over an hour longer than they spend watching traditional sporting content (five hours and ten minutes).

The study also found that lockdown contributed to a spike in mobile gaming, with 2.9 billion people (71 per cent of internet users, up from 63 per cent in 2015) now playing games on their smartphones. This makes the smartphone the most popular gaming device in history. WARC adds that uptake is highest in Asia, with women leading the way. Mobile gamers skew older than the average and comprise mostly of females – 55 per cent versus 46 per cent for all gamers.

Furthermore, 57 per cent of mobile gamers are fine with viewing advertising if it keeps the game free-to-play, rising to 70 per cent among Americans. 

When it comes to streaming, Amazon’s Twitch platform has been a big winner during lockdown, the study shows. In April alone, consumption of gaming content on Twitch rose 63.8 per cent from the previous month to top 1.6 billion cumulative hours, more than double that of Facebook Gaming, YouTube Gaming, and Microsoft’s now defunct Mixer combined.

The report finds that the viewing of gaming content is eroding the viewing of linear TV among Gen Z. Two in five (41 per cent) 16 to 24-year-olds have watched a gaming stream in the last month, with a rate of one in three (35 per cent) recorded among millennials. Penetration is highest in Asia at 38 per cent, with rates close to a third in Latin America (31 per cent), North America (30 per cent) and the Middle East and Africa (30 per cent), and a quarter in Europe (20 per cent).

For many younger viewers, streaming is now the ‘new prime time’. Twitch alone draws a predominantly Gen Z audience of 1.9 million per day, with viewing concentrated after 7pm. Two-thirds of 18 to 25-year-old gamers would rather play video games or watch gaming content than watch TV.

“Mixer’s shuttering this month served only to highlight the stranglehold Twitch has on the market," said James McDonald, WARC Data’s managing editor and author of the new research.

“Tencent may yet 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.”