eSports Market Ecosystem Map

Continuing on my trend of market maps, I wanted to dig into the eSports market. eSports is the market of professional video game players (LoL, Dota 2, Starcraft, etc) and fans who watch people play video games.

Some caveats before we dive into the analysis.

This ecosystem map is not designed to be 100% comprehensive. It’s more to understand all the different spaces within eSports.
I am biased towards startups in the space.
If I am missing something tweet me @mccannatron.
This space is developing quickly so take this into consideration.

Observations

• eSports is big, bigger than you imagine. 27M people watched the final League of Legends event vs. 19.9M viewers watched the full 6 game series of the 2015 NBA finals. One thing to keep in mind is eSports games are international vs. NBA only includes US broadcast figures, but still this is a huge fan base.
• The current prize pool for “The International” 2015 Dota 2 tournament is $18M vs. Super Bowl the super bowl prize pool $8M, NBA Finals $7M, Stanley Cup $6M, etc. This excludes sponsorships, minimum salaries, etc but $18M is still a significant amount of money for a single tournament. What is even more impressive is the speed at which this prize pool is growing:

• If you suspend belief for a minute and think of these eSports players as professional athletes then the structure of teams, leagues, tournaments, agencies, networks, better, etc all starts to make much more sense. The big questions are which businesses in traditional sports will translate over to eSports, and which will be different.

Category Observations

Publisher/Games

• A few of the top eSports games are: League of Legends, Dota 2, Call of Duty, Counter Strike, Starcraft, World of Warcraft, and Hearthstone.
• Most of these are PC based, and there are currently no mobile games with large scale audiences yet.
  *Update* — After talking with a few people in the industry I have found out that although you can play Hearthstone via the PC, it is most popular amongst mobile users.

Teams

• Teams are an important factor when deciding which eSports games to watch (similar to pro-sports teams). eSports teams — unlike regular U.S. sports — teams can compete on multiple games and are building significant brands themselves.

Agencies

• Corporate sponsorship of eSports in the US is set to top $100m this year, a total reaching $143m when adding in merchandising and ticket sales.
• Twitch bought one of the top eSports agencies — GoodGame — a very smart move on their part.

Networks

• Twitch is the big dominate player in the eSports category. No matter which way you cut it, Twitch has a dominate share of both the viewership and revenue share of the eSports market.
• Although I wouldn’t ignore what ESPN and YouTube are doing.

Mobile Networks

• These networks specialize in streaming mobile games. Right now there aren’t any mobile games with huge fan bases yet, but if one games does come along MobCrush and Kamcord will be the first to benefit.
  *Update* — See the above comment re: Hearthstone. I would follow this space and watch the mobile eSports games closely.

Social and Professional Networks

• These are networks that help players connect with each other, challenge each other, find jobs, and find teams to join. Check out ZenGaming and Raptr.

Fantasy and Betting

• Personally I think this is the most interesting vertical within eSports. The two companies I’d pay attention to here are Vulcun and Unikrn.
• Similar to fantasy sports and sports betting in regular sports, this is the same concept applied to eSports. Vulcun has already paid out $7M this year and this space is just starting.

PS - A big thanks goes to Jonathan Pan who originally wrote this market map and these two analysis pieces on the industry. They were very helpful in getting the lay of the land.