Esports revenue to hit USD 1 B by 2019

Market researcher Newzoo has published in its annual report a series of predictions related to the esports industry, which has rapidly become a trendy investment among billionaires as esports tournaments are being covered on mainstream media outlets such as ESPN alongside traditional sports like football or baseball.

In its annual report, Newzoo anticipates global esports revenue will reach $906 million this year, a whopping 38 percent increase over 2017.

The study breaks down the eye-popping figure this way: $359 million from sponsorships, $174 million from advertising, $161 million from media rights, $116 million from game-publishing fees and $95 million from the sale of merchandise and tickets.

"As a consumer phenomenon, esports continues to grow its huge base of passionate fans across the globe," Newzoo CEO Peter Warman says in the report. "As a business, esports is now entering a new and critical phase toward maturity. Big investments have been made, new league structures have been launched, sponsorship budgets have moved from experimental to continuous, and international media rights trade is starting to heat up."

The report predicts the esports industry could grow to $1.1 billion by next year and $1.65 billion by 2021. Warman, however, cautions about the dangers of escalating player salaries and an reliance on popular, but limited number of teams and game franchises.

"Profitability and return on investment is, for many organizations at the heart of the esports economy, a challenge."

Newzoo says esports will reach 380 million fans this year, made up of 165 million die-hard enthusiasts and 215 million occasional viewers. Though North America still accounts for only 18 percent of the fan base, the United States and Canada generate 38 percent of the global revenue.

Cleveland is starting to the feel the impact of the booming industry. The Cavaliers are fielding a team in the new NBA 2K League, Cavs owner Dan Gilbert is the primary investor in a League of Legends team, and colleges like Akron, Kent State and Ashland are launching varsity programs in esports.