The European esports market: Let’s Play! 2024
After reaching near-mainstream levels at times during the COVID-19 pandemic, the buzz around esports has somewhat slowed down in the past two years. Nonetheless, new audiences are steadily coming into contact with the phenomenon for the first time, meaning that the term ‘esports’ and the underlying concept are now firmly established in popular culture. Engaging these new audiences on a long-term and regular basis, however, remains a challenge – as, at present, young men remain the top target group intensively involved in esports on a regular basis.
The European esports market - the state of the esports audience
The 8th edition of the Deloitte study 'Let's Play! - The European esports market' focuses on the development of the European esports audience. The study is based on extensive consumer research across 9 European countries with 7,700 participants. Furthermore, snapshots of 11 countries outside of Europe (c. 7,000 research participants) help putting the European consumer data in a global context. A special focus on esports M&A complements the research and shows how the consumer-driven esports sector continues to attract investor interest.
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Understanding the concept is the first step
Esports continue to gain recognition in a wider population across European countries, resulting in a ‘critical mass’ familiar with the term and concept. But even so, not everyone understands exactly what it means. Therefore, it is important to establish an agreed definition:
Esports are defined as computer, mobile or console video games played at a professional competitive level, with teams or individuals facing each other in leagues or tournaments.
Esports are a subcategory of the video gaming industry. In addition to the competitions themselves, we define esports primarily as a spectator product that attracts audiences via Internet, TV and on-site at live events. There are competitions in a wide variety of games – which can in turn be categorized into different genres – and it is important, particularly for newcomers without a deep understanding of the market, to acknowledge that the way esports are organized differs depending on the respective title and genre.
Sub-ecosystems around core value orchestrators drive growth in the overall esports sector
The esports ecosystem includes many core-value-creating stakeholders such as league organizers, event hosts, esports teams and players. Furthermore, there are stakeholders involved from the publisher segment, traditional media and online platforms, as well as companies which sometimes can assume roles as strategic partners. Last but not least the esports audience is an important stakeholder in the esports world, reflected in central KPIs such as viewership numbers of esports competitions.
The overall ecosystem contains numerous sub-ecosystems that may revolve around individual league organizers and event hosts, publishers, game titles or content creators, depending on which stakeholder ultimately delivers value to the customer. There are also other entities on the periphery with touchpoints into the esports industry with varying levels of influence. Such entities include governmental institutions, hardware suppliers, and venue operators.
One essential factor in creating value and driving growth is setting up incentives for stakeholders to enter and engage in the esports ecosystem long-term. Committing to esports must therefore have recognizable benefits – both inherently and relative to competing business opportunities. This will depend, among other things, on the commercial prospects.
Stakeholders are contributing to esports revenue streams in six main areas:
- Revenues related to leagues and tournaments, as well as the performance of professional players in the competitions (i.e., prize money and entry fees)
- Sponsorship deals between esports teams, leagues, or event organizers on the one hand and strategic partners (investors/sponsors) on the other
- Advertisement, placed either on-site at live events or during competition broadcasts
- Revenue from the sale of media rights for esports content (both free-to-air and pay-per-view)
- Ticket sales at live events and merchandising revenue
- Publisher fees paid by publishers to independent esports organisers for hosting events and to esports teams for marketing rights
Other esports-related revenue streams may arise from esports-related investments or agency work, among others. Stakeholders engaging in esports activities often also record non-esports-related revenues generated in their other business activities outside the esports space.
International sector with national specifics
Although esports are an international, cross-border phenomenon, the development of esports varies considerably from country to country.
In terms of country differences, the gap in reach and consumer penetration between more developed European esports markets and less mature markets is steep. Regular consumer interaction in Europe is highest in the UK and Spain, followed by Italy and Germany. With audiences still consisting of mostly young male fans, it is no wonder that the highest engagement rates globally can be observed in countries with populations that disproportionately resemble this demographic – such as the six featured Southeast Asian countries and Saudi Arabia.
For a detailed look at the situation in 9 European markets as well as for a snapshot for 11 further countries globally, download the newest edition of `Let’s Play!’.
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Download the report Let's Play! 2024
