eSports: bigger and smaller than you think 281 Deloitte Global predicts that eSports will generate Revenues for eSports are predicted to grow 25 percent The very idea global revenues of $500 million in 2016, up 25 percent in 2016, which is better than most mature sports, 282 that people from about $400 million in 2015 , and will likely have many of which have been around for a century or even may be willing an audience of regular and occasional viewers of close centuries. Arguably, given its small size, some might ask to 150 million people. why eSports’ growth rate is not higher. to watch other The very idea that people may be willing to watch Some believe that eSports is approaching a tipping people play other people play competitive video games for big point or upward inflection in the market: one American competitive money prizes may surprise some. These people analyst predicts that eSports in the US alone will leap 284 video games often underestimate the global annual market size at from $85 million in 2014 to $1.2 billion in 2018 : millions of dollars only. Conversely, eSports advocates a 94 percent compounded growth rate, which is triple for big money overestimate the current market size, believing annual the projected 2016 growth over 2015. prizes may revenues are already in the billions, and comparable to major league sports. Some are linking the popularity of online video 285 surprise some. game-related content to eSports . The top In some ways, eSports is comparable. A single event gaming-related video star is PewDiePie, with 40 million 286 (but not that many per year) may attract 40,000 people subscribers , and number two is VanossGaming, with 287 watching live, and tens of millions watching over 15 million subscribers . They may be the biggest stars, the Web. This could be interpreted as meaning that but collectively gaming videos make up more than 283 288 “eSports is bigger than basketball ”. That may be true, 10 percent of YouTube’s top performing channels . when measured by audience size for an individual event, but in dollar terms, eSports is not yet playing in the big However, Deloitte Global does not believe that there leagues. is a direct correlation between online video gaming success and eSports and, therefore, that the annual In 2016, eSports revenues will represent a fraction growth rate of eSports revenues is not about to triple. of league revenues in major sports such as European The most popular online content is not about watching football (soccer), US football, basketball, baseball, or elite gamers competing. Instead, the content is about ice hockey which range from $4 billion up to $30 billion entertainment (both PewDiePie and Vanoss are better (see Figure 14). known for their humor than being top-ranked players) or is largely instructional in nature: teaching gamers how to find hidden treasures (such as Easter eggs) or surmount difficult in-game challenges. Figure 14: Major league sports revenues in $ billions Revenue ($billion) 35 30 $30 25 20 15 $11 10 $8 5 $5 $4 $0.5 0 European football NFL football MLB baseball NBA basketball NHL hockey eSports 2016 2015 2014 2014 2015 2016 Note: Revenue figures include ticket sales, TV rights, sponsorships and other commercial sources Source: Forbes and Deloitte Global analysis based on publicly available sources. For further information on the sources, see endnotes. 42