Esports Market Ecosystem Map — September 2015

Inspired by Chris McCann’s virtual reality, internet of things, and drone market ecosystem maps, I made one for eSports (organized video game competitions).

eSports started off as a byproduct of, and is dependent on, the highly successful online video games and the companies that created them. Over the next few years, will the eSports ecosystem be able to sustain itself? To find out, I have selected one metric most representative of sustainability for each category. The best metric is monthly active users. There is the possibility of a feedback loop between number of players and number of spectators. When monthly active users isn’t available, I use registered users followed by prize pools.

Graphic by Deanna Nguyen

If I am wrong or missing something,
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Observations:

1. The most interesting surprise in eSports is…Microsoft. eSports started with online PC games. The integration with consoles means adding millions in installed base. Will that change anything? No one is better poised to find out than Microsoft which has invested in multiple eSports genres and is expecting benefits from the integration between Xbox One and Windows 10.
2. The juggernaut in eSports is Blizzard Entertainment. Blizzard’s domination extends across multiple genres. It is the clear leader in the real-time strategy and collectible card game genres. It has recently launched the multiplayer online battle arena (MOBA) game Heroes of the Storm, a genre which originated from Blizzard games. Soon, it will enter the first-person shooter genre with Overwatch. To top it off, Blizzard recently registered a trademark for Compete, an “online non-downloadable Internet-based system application” focused on eSports.
3. A few major eSports franchises are becoming global brands. Some of them are on a trajectory to be more popular than the leagues they play in or games they play. How will that change the balance of power in the future? Will game publishers have to pay the top teams to play their game? And what does that mean for the players? Will teams want to encourage the development of individual stars or suppress them?

Genre: MOBAs — Metric: Number of monthly users (number of registered users secondary choice)

1. League of Legends, Riot Games (PC) — 67 million monthly active users (source: Riot, January 2014)
2. Dota 2, Valve Software (PC)— 11.7 million monthly active users (source: Valve, 8/20/2015)
3. Heroes of the Storm, Blizzard Entertainment (PC) — 9 million players signed up for beta (source: Activision-Blizzard, Q4 2014)
4. Smite, Hi-Rez Studios (PC, going to console) — 8 million players (source: Hi-Rez, 7/14/2015)
5. Vainglory (mobile) — 1.5 million monthly active users (source: Venture Beat, 7/1/2015)

Genre: First-Person Shooters (FPS) — Prize pool

1. Call of Duty, Activision (PC and console) — $1 million, Call of Duty World Championships 2015 (Source: Activision)
2. Halo, 343 studios (PC and console) — $1 million, Halo World Championship 2015 (source: Microsoft)
3. Counter-Strike: Global Offensive (CS:GO), Valve Software (PC and console) — $500,000 between two competitions per year, ESL One (source: ESL)
4. Crossfire, Smilegate Entertainment (PC) — $221,000 Crossfire Stars 2015 (source: Crossfire)
5. Battlefield 4, EA (PC and console) — €135,000 between three competitions per year, ESL One (source: ESL)
6. Overwatch, Blizzard Entertainment (PCS) — closed beta later this year, could be a game changer in FPS eSports

Genre: Real-time Strategy (RTS) — Prize pool

1. Starcraft II, Blizzard Entertainment (PC) — $1.6 million, 2015 World Championship Series. The grand daddy of eSports is still alive and kicking (Source: Blizzard).
2. World of Tanks, Wargaming (PC and console) — $300,000, Grand Finals 2015 (Source: PC Gamer).
3. World of Warcraft, Blizzard Entertainment (PC) — $250,000, 2015 World of Warcraft Arena World Championship (Source: Blizzard)

Genre: Collectible Card Game (CCG) — Number of registered players

1. Hearthstone, Blizzard Entertainment (PC, tablet, and mobile) — 25 million registered users (source: Activision-Blizzard, Q4 2014). With no significant competitor in sight, Blizzard is likely going to dominate the CCG market as it did the MMOPRG market with World of Warcraft.

Genre: Fighting Game — Prize pool

1. Street Fighter, Capcom (PC and console) — $250,000, Capcom Pro Tour 2015
2. Mortal Kombat, NetherRealm Studios (PC and console) — $100,000, ESL Mortal Kombat X Pro League Season 1
3. Super Smash Bros., Nintendo (console) — $18,690, Evo 2015

Tournament Organizers — Breadth of eSports games coverage.

1. Electronic Sports League (ESL) — Acquired by Swedish media company MTG for $86 million in July 2015. Has a strong presence in League of Legends, Dota 2, Halo, CS:GO, Battlefield 4, Starcraft II, and more.
2. Ongamenet (OGN) — OGN is a South Korean cable television channel that specializes in broadcasting video game-related content. They also organize tournaments.
3. Major League Gaming (MLG)— Has a strong presence in Call of Duty, Smite, and numerous console games.
4. Evolution Championship Series — Annual fighting games tournament held in Las Vegas.
5. Battlefy — Tournament management platform, $2 million Seed, December 2014

Major eSports Franchises — Number and types of tournaments won.

1. Fnatic — Teams fielded: League of Legends (Season 1 World Champion, won five out of the last six European splits), CS:GO (won the last two ESL One CS:GO tournaments), Dota 2, Smite, Battlefield 4 (won the last four ESL tournaments), Heroes of the Storm
2. Evil Geniuses — Teams fielded: Dota 2 (International 2015 Champions, third place International 2014), Halo (Halo Championship Series Seasons 1 and 2 Champion), Starcraft II, and a variety of fighting games (first place, Street Fighter EVO 2015)
3. TSM — Teams fielded: League of Legends (either first or second place in the last sixNorth American splits), Hearthstone, CS:GO, Smite, and Super Smash Bros.
4. Cloud 9 — Teams fielded: League of Legends (either first or second place in four of the last five North American splits), Hearthstone, CS:GO, Halo, Smite, Super Smash Bros., Dota 2, and Heroes of the Storm.
5. Team Liquid — Teams fielded: League of Legends, Hearthstone, CS:GO, Heroes of the Storm, Street Fighter, Super Smash Bros., Halo, and Starcraft II.

Daily Fantasy eSports & Betting— Amount of funding (to pay for user acquisition)

1. Vulcun — Fantasy, $13.3 million in funding to date
2. Unikrn — Betting, $10 million in funding to date
3. AlphaDraft — Fantasy, $5 million in funding to date; acquired by FanDuel in September 2015
4. DraftKings — Fantasy, $375 million in funding to date, not involved with eSports at the moment but it would be an easy addition to their existing platform if the potential of daily fantasy eSports is enticing enough
5. FanDuel — Fantasy, $361.2 million in funding to date, not involved with eSports at the moment, same reasoning as above
6. Yahoo — Recently got back into the daily fantasy sports business; here’s a detailed analysis on why Yahoo should get into eSports
7. Matcherino — eSports fan engagement platform where fans can crowd-source and crowd-funded matches (and more)
8. Strivewire — Daily eSports fantasy

Networks (entities that pay for the rights to distribute eSports content)— Marketshare (based on my estimates of eSports games streamed on all three sites)

1. Twitch — 78-82% (flat), acquired by Amazon for $970 million in August 2014
2. YouTube — 15–20% (high fluctuations), YouTube Gaming launched on 8/26/2015
3. Azubu — 2–3% (trending down)

Twitch for ____

1. Kamcord — Twitch for mobile games, $15 million Series B, December 2014 (more single-player focused)
2. Mobcrush — Twitch for mobile games, $10 million Series A, August 2015 (more eSports focused)
3. Plays.tv — Twitch for your highlights
4. Hitbox.tv — Higher-quality Twitch
5. Oddshot.tv — Twitch for spectator-captured highlights

Reporting

1. ESPN—Launched ESPN the Magazine’s first-ever eSports issue in June 2015. While there seems to be some internal turmoil surrounding the reporting of eSports, major eSports events have been covered on SportsCenter.
2. theScore eSports — eSports mobile platform with in-house reporting, launched in February 2015.
3. reddit — Some breaking news will continue happen on gaming-related subreddits because the most hardcore fans keep track of their favorite players’ and teams’ every move.
4. Instant eSports — News and stats aggregator, YC Summer 2015

Talent Agencies

1. WME/IMG: January 2015: Buys eSports agency; May 2015: Invests in AlphaDraft; June 2015: Signs three teams (Cloud 9, Dignitas, and SK Gaming); September 2015: Announces an eSports league with Turner Broadcasting and broadcasting games on live television; September 2015: Announces the first major agency brokered sponsorship deal
2. GoodGame Agency: Acquired by Twitch in December 2014.
3. CAA: No reported action on the talent agency side, but has invested in Mobcrush and Vulcun

Other

1. Mind Games: eSports Psychologist
2. Skillz: Skill-based gaming platform. $15 million Series B, September 2015
3. Abios: eSports calendar
4. Discord: Voice and text chat for gamers

Thanks to Deanna Nguyen for the graphic.
Thoughts? Agree? Disagree? Would love to hear from you. Leave a comment or a response. If you liked the post, please hit ♥ so others can enjoy it too.

Check out some of my other writings on eSports:

• The Future of eSports Part I: Beyond the Hype
• The Future of eSports Part II: The Convergence of Two Worlds
• The Future of eSports Part III: Are eSports Stars Born or Made?
• Yahoo: The Central Destination for eSports