A majority (56%) of esports companies have changed their business strategy as a result of the COVID-19 pandemic, according to a report [download page] from Esports Business Summit and Esports Business Research Group covering the state of this growing industry.
The report is based on survey responses from more than 250 esports companies, fielded in April 2020 amid the coronavirus pandemic. As competitors are unable to travel, the impact of the crisis can be seen in the 58% of respondents who said that COVID-19’s impact on live tournaments and events was one of the most important trends and issues impacting the esports industry over the next 1-2 years.
However, the impact of COVID-19 was not the top response among the most important issues and factors impacting the industry. The top trend indicated by respondents was total audience growth and engagement (as cited by 64%), which, alongside other trends such as brand activation on streaming platforms (47%) and growth in colleges and universities (32%), highlights an understandable desire to continue to progress at this difficult time. And, while the relatively low percentage citing increasing investment as a top trend (28%) may indicate a level of uncertainty, just 8% saw investment decreasing as a key trend.
Respondents indicate a number of ways in which their own companies have been affected by the outbreak. Like many other industries, the halting of in-person interaction has had a major impact, with 34% stating that live tournaments had been canceled and a further 3 in 10 noting that live tournaments have been postponed.
Other impacts at the company level include the suspension of brand activation strategy for live events (30%), more focus on streaming (29%) and the suspension of sponsorship and exhibiting to reach customers and prospects (28%).
That said, esports companies are changing their strategy in response to being uniquely placed in a changed market compared to traditional sports. A plurality (42%) of respondents think that their company’s business revenue will increase in 2020, and an even higher percentage (56%) think that overall industry revenue will increase. This may be due in part because audiences staying at home may be more inclined to watch gaming content. Data published last year by Nielsen revealed that 71% of Millennial gamers also watch gaming-related content, spending an average of 6 hours a week doing so – before the pandemic. PwC also last year forecast a compound annual growth rate of 16.5% on esports streaming advertising through 2023.
Whether this optimism surrounding increased revenues this year will come to fruition is yet to be seen. In a revised forecast, NewZoo reports that they have further decreased their estimated revenue growth for the global esports industry, showing only 1.7% year-over-growth this year. This is compared to the 23.3% growth seen in 2019, suggesting that optimistic forecasts may not materialize.
The full report can be downloaded here.
About the Data: Findings are based on survey responses from more than 250 esports companies.