Niko Partners: Asia is 54% of the $1B global esports market

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Asia is more than 54% of the $1 billion dollar global esports market, according to market researcher Niko Partners.

Asia is the world’s largest and most important region for esports, generating $543.8 million in revenues in the region in 2020. This is a 4.9% increase over 2019 despite the challenges of COVID-19, Niko Partners said. During 2020, esports operators had to shut down their physical events and shift to digital broadcasts of their events. Yet the Asian market still managed to grow, and it remains on a strong course in 2021. Revenues for 2021 will likely be close to $600 million, or 10.5% growth over 2020.

This excludes the revenue generated by games and includes the revenue of the industry of esports. The value of esports licensing and media rights grew in 2020 as platforms sought content and sponsors sought alternatives to relationships with traditional sports media. Esports’ ability to move to online-only play made them a popular alternative to live media events impacted by new regulations.

Making up for the loss of physical revenues such as merchandise and ticket sales, esports viewership in Asia boomed in 2020, growing to 618.4 million esports spectators in 2020. This is a 21% increase over the 510 million Asian esports spectators in 2019.

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Alexander Champlin, the director of esports research for Niko Partners, said in an email to GamesBeat that the company assumes in-person events will continue in China, but the rest of the region will be slower to return to esports stadiums.

“The Dota 2 One Esports Singapore Major, one of the largest in-person esports events to take place in Southeast Asia in 2021 will likely be more of a fluke than the start of a return to normal,” he said. “However, the industry has already begun a strong pivot away from in-person events as the cornerstone of esports. Brand partnerships and streaming deals are becoming the heart of the industry in an online-only world. Most growth in 2020 came from these two sectors of the industry and we predict, even after in-person events resume, these will remain the segments that drive the market.”

Above: The LCS Championship is back in person for North America. And the finals will be in-person in China.

Image Credit: Riot Games

Lisa Hanson, the president of Niko Partners, said in a statement that after a few difficult months during the pandemic, much of the esports industry was back on track during the rest of 2020. While tournaments were no longer in person, sponsorship and media deals rose, and as one of the few live-sports industries able to deliver its product virtually, esports was able to court investors and spectators from other segments.

Niko Partners expects licensing and partnerships to be the fastest-growing parts of the esports ecosystem as global viewership continues to rise.

Niko’s report covers the esports markets of China, Chinese Taipei, India, Indonesia, Japan, South Korea, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

TJ Esports’ LPL is continuing in person, although they too had a COVID-19 induced false start in Q1 and were forced to refund tickets. Riot/Tencent esports properties League of Legends and Honor of Kings were also two of the only major esports events to take place in-person in the second half of 2020, and some of the first to put in-person championships on the books for later this year, Champlin said.

“China is nearly back to normal behavior regarding to conferences, crowds, and in person sporting and entertainment events, so this fits with the current state of live events,” he said.

Regarding 2022, Champlin said, “We think the industry will likely adopt a hybrid model moving forward. As in-person events become more feasible the balance will start to shift back in this direction. Countries that have historically benefited from esports tourism, like many in Southeast Asia, will be quicker to make this shift once live events become safe, while countries like China, Korea, Japan, and even India, with strong livestreaming ecosystems and domestic esports industries will approach this with less urgency.”

He added, “There are quite a few benefits to online-only events including simplicity, scalability, and reduced overhead costs. A growing number of online tournament platforms and increased acceptance of online tournaments among advertisers and sponsors are making the transition back to in-person less urgent than it looked in early 2020.”

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