Esports market goes mainstream as viewership reaches 214M.

It’s an exciting time for competitive gaming. Esports earnings reach $892M in 2016E as publishers and brands invest in the market. Gamer-focused brands like Mountain Dew and Nvidia are no longer eSports’ only sponsors. Mainstream brands like Coca-Cola are taking notice of eSports’ popularity among young, male consumers. Ads and sponsorships continues to drive the lion’s share of eSports revenue, but direct revenue is growing as well. Earnings from winnings rise as publishers like EA and Microsoft offer prize pools north of $1M to attract high-level players and media attention. These publishers are also investing in lavishly produced live events, driving up ticket and merchandise sales.

Real-life sports teams are also seeking to enter the eSports scene. Professional soccer teams commonly hire FIFAplayers, and teams including Germany’s FC Schalke 04 have acquired League of Legends squads in order to reach new audiences with their brand.

See our new industry report on the eSports market.

The top esports games are bigger than ever

League of Legends remains the world’s most-watched eSport, with 27 million unique viewers tuning in to the 2015 World Championships, more than for game seven of the 2014 MLB World Series. Riot Games’ hands-on control of the game’s esports ecosystem means League of Legends esports production values are top-notch. Professional League of Legends is relatively easy to follow thanks to clearly-defined pro leagues.

The second-biggest Multiplayer Online Battle Arena (MOBA), Valve’s Dota 2, wins out when it comes to prize pools. Its world championship tournament, The International, had a crowdfunded prize pool of $18.4 million last August. This year’s International is poised to blow past that total: The pool stands at $18.0 million with several weeks to go before the event.

MOBAs and legacy shooters like Counter-Strike: Global Offensive are currently the biggest eSports. However, the market is currently undergoing a transition, much like how MOBAs replaced Real-time Strategy games as a top eSports genre early this decade.

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Diverse game types and new viewing options expand the esports market

The complex gameplay of MOBAs and hardcore shooters like Counter-Strike: Global Offensive limits their total eSports audience by making it difficult for casual viewers to understand what is going on. Widespread online streaming on sites like Twitch and Azubu allows smaller, more accessible games like Rocket Leagueto find an online audience and become viable eSports. Blizzard’s new shooter <Overwatch heavily emphasizes accessibility and is poised to be the next big eSport.

A wider selection of games is not the only way eSports are becoming more accessible to newcomers. TV networks like TBS and ESPN are airing eSports in a bid to reach a valuable audience. These viewing options appeal to casual fans who are turned off by the intricacies of streaming platforms (such as Twitch’s lightning-fast chat feed).

Similarly, Facebook is pushing to become an esports destination to appeal to millennials and younger users. MLG (now owned by Activision Blizzard) plans to stream on its Facebook page daily to reach viewers who would not visit the dedicated MLG.tv site.

Initiatives from Facebook and TV networks will bring more mainstream audiences into the fold, but it is a mistake to think existing eSports viewers will move away from Twitch in favor of ESPN. Online streaming platforms offer a superior viewing experience by letting viewers easily chat with others and track competitor stats. Additionally, eSports’ culture and core audience originated online, so longtime fans do not feel TV is necessary to legitimize eSports.