eSports: Incl Impact of COVID-19 - US - August 2020

OVERVIEW
What you need to know
Key issues covered in this Report
Definition
COVID-19: Market context
Economic and other assumptions
EXECUTIVE SUMMARY 
Top takeaways
Market overview
Figure 1: Global esports revenue, 2018-20
Impact of COVID-19 on gaming and esports
Figure 2: Short-, medium- and long-term impact of COVID-19 on gaming and esports, August 2020
Opportunities and challenges
Competing and crossing over with traditional sports
Figure 3: Recency of watching sports and gaming content, May 2020
2020 audience will need to be retained
Figure 4: eSports viewing in 2020 compared to previous years, May 2020
Brands that support esports players get supported by viewers
Figure 5: Interacting with esports players, May 2020
Combine gameplay with gaming content
Figure 6: Reasons to watch and avoid video game content – Gameplay, May 2020
New games bring new opportunities for competitions
eSports investments challenged by a lack of live events
What’s next
THE MARKET – KEY TAKEAWAYS
COVID-19 slowed booming esports market
Sponsorships soar as ticketing sales plummet in 2020
Increasing gamer population fuels esports audience growth
A lack of traditional sports opens some doors to esports
New opportunities emerge in growing esports landscape
GLOBAL ESPORTS MARKET SIZE 
eSports market remains strong, but growth is slowed by COVID-19
Figure 7: Global esports revenue, 2018-20
US implications for esports market
Figure 8: Key drivers affecting Mintel’s market forecast, 2019-25 (prepared in August 2020)
Impact of COVID-19 on gaming and esports
Lockdown
Re-emergence
Recovery
Figure 9: Short-, medium- and long-term impact of COVID-19 on gaming and esports, August 2020
COVID-19: US context
Learnings from the last recession
Figure 10: Spending more time doing home entertainment activities vs prior year, 2008-10
Figure 11: Consumer spending on cable, satellite, other live TV; 2006-10
GLOBAL ESPORTS SEGMENT BREAKDOWN AND PERFORMANCE
Sponsorships drive esports revenue
Figure 12: Global esports revenue, by revenue stream, 2020
COVID-19 hits merchandise and ticketing the hardest
Figure 13: Year-over-year growth of esports revenue streams, 2019 vs 2020
Four games dominate global esports viewing
Figure 14: Global live esports hours watched on Twitch, YouTube and Mixer, 2019
TARGET AUDIENCE – THE US GAMER
Share of adults who play video games is growing
Figure 15: Share of US adults who play video games, 2018-20
Who are gamers?
Figure 16: Profile of US gamers, by key demographics, May 2020
Mobile attracts the largest audience
Figure 17: Gaming devices used, May 2020
Gaming is a daily habit
Figure 18: Frequency of gaming and weekly hours, May 2020
Casual gaming is common
Figure 19: Reasons to play video games, May 2020
Puzzle and board games have the largest audience
Figure 20: Types of games played, May 2020
MARKET FACTORS 
Traditional sports shutdowns open door for esports
Delayed seasons leave hole in sports coverage
Figure 21: Sports leagues regularly viewed, July 2020
Passionate fans gravitate to esports to fill the void
Live events will be hard to come back to
Figure 22: Attitudes toward sports as a result of COVID-19, July 2020
Gamers play more during COVID-19 than they did before
Figure 23: How much gamers are playing video games since COVID-19 outbreak, May 2020
Sports fans take to social media to learn more
Figure 24: Social media sites used to follow sports, July 2020
Streaming passes cable to be primary video entertainment
Figure 25: Video sources used, May 2020
Financial help coming to buoy esports organizations
MARKET OPPORTUNITIES 
Invest in the live experience once the dust clears
Make esports more relevant to all audiences, not just young men
Look to new games for emerging markets
Academic institutions can be practice for the big leagues 
Mixer shuts down, opening the door for other platforms
Figure 26: Where Mixer viewers also watched gaming content, May 2020
THE ESPORTS LANDSCAPE – KEY TAKEAWAYS 
Eight games capture the attention of many esports fans 
New industries extend influence into esports 
Collaborations and exclusives will help organizations stand out
OVERVIEW OF ESPORTS GAMES
Fortnite
What it is
Spotlight on competitions
League of Legends
What it is
Spotlight on competitions
Counter-Strike: Global Offensive
What it is
Spotlight on competitions
Overwatch
What it is
Spotlight on competitions
Dota 2
What it is
Spotlight on competitions
Rocket League
What it is
Spotlight on competitions
PlayerUnknown’s Battlegrounds
What it is
Spotlight on competitions
Hearthstone
What it is
Spotlight on competitions
HOW NON-GAMING BRANDS HAVE WORKED WITH ESPORTS
Positive reception to outside sponsorships means opportunity for brands
Figure 27: Popularity of non-gaming brands in gaming, October 2019
Fashion and apparel
Figure 28: @LouisVuitton LoL partnership Twitter post, September 2019
Healthcare
Figure 29: @Cloud9 Kaiser Permanente partnership Twitter post, May 2020
Foodservice
Figure 30: @EAMaddenNFL Pizza Hut Stadium Twitter post, April 2020
Financial services
Figure 31: @MastercardNexus Twitter post, July 2020
COMPETITIVE STRATEGIES
Crossing over with traditional sports 
Sports organizations extend reach into esports
Figure 32: @CycloneATH Madden Summer Challenge Twitter post, June 2020
eSports players train like athletes from other sports 
Developers are working with broadcasting platforms for deals 
Making esports easier to find 
Aggregating different esports under one umbrella 
Teams are becoming their own brands 
Bringing esports to big and small screens
Giving esports the celebrity treatment
Celebrities get behind esports 
Figure 33: Celebrities and esports investments
Validating esports with awards
Incorporating 5G with the future of esports 
THE CONSUMER – KEY TAKEAWAYS 
Competitive gaming attracts one third of adults 
A flood of new viewers in 2020 
Gameplay creates fans of gaming content 
Games connected to US players have the greatest reach 
YouTube gets the largest audience, but Twitch and Facebook have the most passionate fans 
eSports fans see gaming competitions as a sport 
Viewers see players as entertainers more than competitors 
Work with esports players outside of competitions 
Digital events should take precedence over live ones 
KEY CONSUMER TREND DRIVERS IMPACTING ESPORTS
Technology
Rights
Identity
Figure 34: Mintel Trend Drivers – Technology, Rights, Identity and Pillars
WATCHING ESPORTS AND GAMING CONTENT 
eSports has attracted the attention of one third of adults in the past year
Figure 35: Profile of active esports viewers, by key demographics, May 2020
Making and viewing gaming content has gathered an audience in the past year
Figure 36: Recency of watching and broadcasting gaming content, May 2020
eSports can compete with traditional sports because of COVID-19
Figure 37: Recency of watching sports and gaming content, May 2020
eSports viewers branch outside of competitive gaming
Figure 38: Watching sports and gaming content, all vs active esports viewers, May 2020
ESPORTS IN 2020
Surge of new viewers in 2020 signals potential for future growth 
Figure 39: eSports viewing in 2020 compared to previous years, May 2020
Twitch users have deepened engagement, but Facebook and ESPN are bringing in new audiences
Figure 40: eSports viewing in 2020 compared to previous years, by type of platform used, May 2020
eSports are here to stay
Figure 41: Perceptions of esports as a fad, May 2020
In their words: esports in the future
WHY PEOPLE WATCH AND DON’T WATCH ESPORTS
Playing games often leads to gaming content consumption 
Figure 42: Reasons to watch video game content, May 2020
Multicultural audiences seek skill, community in gaming content
Figure 43: Reasons to watch video game content – Select items, by race and Hispanic origin, May 2020
Boredom in gaming content creates disinterest
Figure 44: Reasons not to watch video game content, May 2020
WHAT GAMES ARE WATCHED
Viewing interests spread across titles and genres 
Figure 45: Number of games watched by esports viewers, May 2020
Sports games reach the largest share of esports viewers 
Figure 46: Gaming genres watched, all gaming content viewers vs active esports viewers, May 2020
Fortnite reigns on top in the US
Figure 47: Video games watched, all gaming content viewers vs active esports viewers, May 2020
Older games reach an older audience, while newer games bring in younger adults
Figure 48: Video games watched, by generation, May 2020
PLATFORMS TO WATCH ESPORTS
Most esports viewers don’t depend on one viewing location 
Figure 49: Number of sources used to watch esports, May 2020
Three quarters of esports viewers go to YouTube 
Figure 50: Websites used to watch esports, all gaming content viewers vs active esports viewers, May 2020
ESPN touts sports brand to rule TV
Figure 51: TV channels used to watch esports, all gaming content viewers vs active esports viewers, May 2020
Age draws a line between YouTube and ESPN
Figure 52: Platforms used to watch esports, by age, May 2020
Strategy games prop up Twitch and Facebook
Figure 53: Platforms used to watch esports, by video games watched, May 2020
PERCEPTIONS OF ESPORTS
Most adults see esports as confusing and insulting to sports…
Figure 54: Correspondence Analysis – Principal map – Perception of sports from general population, May 2020
Figure 55: Perception of sports from general population, May 2020
…while gaming content viewers see the innovative and diverse appeal of esports
Figure 56: Correspondence Analysis – Principal map – Perceptions of sports from gaming content viewers, May 2020
Figure 57: Perceptions of esports, all adults vs active esports viewers, May 2020
PERCEPTIONS OF ESPORTS PLAYERS
Different perceptions of esports and players present challenges and opportunities 
Figure 58: Perceptions of esports and esports players, May 2020
In their own words: lack of physicality for esports players
eSports viewers see themselves in the competition
Figure 59: Professional video game aspirations, all gaming content viewers vs active esports viewers, May 2020
Team-based and solo gameplay have similar appeal
Figure 60: Team vs individual game viewing, all gaming content viewers vs active esports viewers, May 2020
INTERACTING WITH ESPORTS PLAYERS
The appeal of eSports players extends beyond the competition
Figure 61: Interacting with esports players, May 2020
Twitch, Facebook viewers connect with athletes
Figure 62: Interacting with esports players, by platforms used to watch gaming content, May 2020
THE APPEAL OF LIVE ESPORTS
Online viewing is preferred over the live experience 
Figure 63: Watching gaming online and in-person, all gaming content viewers vs active esports viewers, May 2020
Live esports viewing depends on the game people watch
Figure 64: Attending live esports events, by type of game watched, May 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Consumer survey data
Consumer qualitative research
Abbreviations and terms
Abbreviations
Terms
APPENDIX – THE MARKET 
Figure 65: Payroll Protection Program relief in esports, July 2020
APPENDIX – MINTEL TREND DRIVERS
Figure 66: Mintel Trend Drivers and Pillars