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June 3, 2020updated 18 Jun 2020 1:06pm

Esports: Companies

By GlobalData Thematic Research

Brands from a wide range of industries are investing in esports to reach a young demographic that is typically resistant to traditional advertising channels. Esports revenue is set to surpass $1bn in 2020 with brand sponsorship the biggest revenue stream.

Listed below are the leading companies impacting the esports industry, as identified by GlobalData.

Activision Blizzard – US

Activision Blizzard’s esports game plan is heavily focused on its popular IP, including StarCraft, Warcraft, Hearthstone, Overwatch, and Call of Duty, and the leagues based around them. With two successful seasons of the Overwatch League completed, it is focusing on the Call of Duty League (which, due to COVID-19, will take place online). The company is working on two new titles, Overwatch 2 and Diablo 4, which should strengthen its esports portfolio.

Alphabet (parent company of Google) – US

Google’s esports ambitions are entirely focused on YouTube. It is investing heavily to close the gap with Twitch in terms of both content and market share. YouTube already has an edge over Twitch in the niche mobile esports streaming segment. It boasted 88% of viewers of the Arena of Valor World Cup 2019, 80% of the audience for the PUBG Mobile Club Open 2019 SEA League, and 93% of the Free Fire Pro League Brazil 2019 audience, according to Esports Charts. YouTube’s market share will grow in the coming years as mobile esports gains popularity in North America and Europe.

Amazon – US

Amazon’s Twitch is the leader in esports streaming, with a 73% market share by viewing hours in 2019. As the COVID-19 pandemic caused lockdowns around the world, Twitch’s number of average daily concurrent viewers increased by 12% (according to Twitch Tracker) in March 2020. The number of hours streamed was up 15% (according to SullyGnome) between 15 March and 18 March 2020. This should translate into strong revenue growth in 2020.

Cloud9 – US

Valued at $400m in 2019, up from $90m in 2018, Cloud9 is one of the world’s leading esports teams. It has achieved success in games like CS: GO, Fortnite, Hearthstone, PUBG, Rainbow Six, Rocket League, Super Smash Bros, World of Warcraft, and Dota 2. It takes part in the League of Legends Championship Series (LCS) and Overwatch League (as London Spitfire). Success across all platforms (PC, console, and mobile) has given it global recognition and attracted sponsorship from Red Bull, Puma, BMW, HP, AT&T, the US Air Force, and Twitch, among others.

Microsoft – US

Microsoft’s focus in esports is shifting from games to streaming. The company’s console-based esports titles, including Halo, Gears of War, and Forza, have failed to match the popularity of other console titles like Call of Duty (Valve) and Super Smash Bros (Nintendo). Microsoft has signed popular streamers like Ninja and Shroud to its Mixer streaming platform in a high-profile move to attract users away from more established services.

Microsoft is also strong in esports analytics, an emerging and relatively uncrowded area. Partnering with Cloud9 in 2019, the company’s Azure cloud services and AI tools are used for training and strategic planning.

Modern Times Group – Sweden

The Swedish media giant owns the leading esports organisers, ESL and DreamHack, and generated $172m in esports revenue in 2019. The company has partnered with Nielsen for the development of valuation and measurement services in esports, as part of an effort to more effectively monetize its events. In 2020, Modern Times Group bought the rights to organise StarCraft II and Warcraft III: Reforged tournaments via ESL and DreamHack for three years.

However, 2020 will be a difficult year for the company because of COVID-19, which has caused the cancellation of events like the ESL One 2020 Dota 2 Major and DreamHack Tours 2020, and forced ESL CS: GO Pro League and DreamHack Masters Spring 2020 to move online.

Team SoloMid – US

Like its peer Cloud9, Team SoloMid is valued at $400m, according to Forbes. The company currently fields players in games such as League of Legends, Apex Legends, Hearthstone, Super Smash Bros., PUBG, Fortnite, Rocket League, Tom Clancy’s Rainbow Six Siege, and Magic: The Gathering Arena. The team has been a strong performer at LCS, having won six of 10 splits of the tournament, claiming the overall title four times.

Tencent – US

Tencent has been a major beneficiary of the esports boom, thanks to its stakes in several leading game publishers and investments in venues, events, and streaming platforms. In 2019, it became the founding member of the Global Esports Federation, which aims to regulate players, organisations, and commercial partners in the ecosystem.

Valve – US

Valve is the publisher of Dota 2 and CS: GO, two hugely popular esports titles. The company is also starting to follow its peers, such as Activision Blizzard and Riot Games, into franchise leagues. In February 2020, it announced a regional league model for the Dota 2 championship, The International. The league has been designed for teams to play in local time, which should bring in more domestic viewers.

Walt Disney – US

Walt Disney is well-positioned in esports broadcasting, with sports channel ESPN and pay TV platform Disney XD holding multi-year media rights for the Overwatch League since 2018. It is now moving beyond simply broadcasting tournaments and is starting to organise them as well. In 2019, Mars Media and Disneyland Paris jointly set up the MDL Disneyland Paris Major, which served as a qualifier for The International 2019.

Disney’s growing focus is aimed at increasing engagement with a key demographic, namely young male, which is typically resistant to traditional advertising channels. Its streaming platforms, Hulu and Disney+, are expected to include esports contents in the future.

This is an edited extract from the Esports – Thematic Research report produced by GlobalData Thematic Research.