Who will win the eSports Streaming Wars?
Esports is set to have another huge year in 2020 and is likely to grow revenues by around 25%+ based on 2019’s estimated 27% increase to ~1.1 billion in revenue. Newzoo forecasts this to reach a staggering US$1.8 billion by 2022. The top 3 revenue regions in order are North America, China, and Western Europe. Revenue is mostly being driven by brand sponsorships, media rights deals, and advertising sales. The streaming companies are growing their revenues fast benefiting from the above.
The esports global audience in 2019 was 454 million, and this is forecast to reach 645 million by 2022.
This week I take a look at the big names and how fiercely they are competing with each other on the streaming side of the esports sector – The ‘Esports Streaming Wars’.
Note: I may cover the Chinese streaming companies in another report.
Amazon ‘Twitch’ (NASDAQ: AMZN)
Amazon Twitch continues to be the US leader of streaming; however in 2019 they did lose some market share declining from 67% to 61%. Losing some big name streamers and stronger competition were factors in the decline. In 2020 we will see if they can hold their current market share.
Alphabet Google ‘YouTube’ (NASDAQ: GOOG) (NASDAQ: GOOGL)
In January Google’s YouTube announced exclusive live streaming deals with three popular gamers: Lannan “LazarBeam” Eacott, Elliott “Muselk” Watkins and Rachell “Valkyrae” Hofstetter. The three moved to YouTube after years of streaming on Amazon’s Twitch. This should help YouTube remain in second position in 2020.
Facebook ‘Gaming’ (NASDAQ: FB)
Facebook gaming was a later entrant to streaming esports beginning only in January 2018. Facebook Gaming saw its market share of the live stream gaming market leap from 3.1% in 2018 to 8.5% in 2019, making it the fastest growing streaming company, among the majors. Facebook’s massive global monthly active user base of approximately 2.5 billion should help Facebook Gaming continue to grow rapidly in 2020.
Microsoft ‘Mixer’ (NASDAQ: MSFT)
In August 2019, Microsoft Mixer secured the popular streamer Tyler Blevins, aka ‘Ninja’, followed by Michael Grzesiek, aka ‘Shroud’ in October. This helped Microsoft Mixer gain market share in 2019.
Enthusiast Gaming (TSXV: EGLX | OTCQB: ENGMF)
Enthusiast Gaming Holdings Inc. is one of the fastest growing esports companies globally, and one of only a few publicly traded, pure-play esports and gaming companies. It should be noted that they stream using YouTube channels, so are not technically a major direct streaming competitor ‘yet’.
Enthusiast Gaming has the largest gaming network in North America and the English speaking gaming regions. Enthusiast Gaming reaches over 200 million gamers on a monthly basis, with 1 billion page views, via 100+ gaming sites and 900+ YouTube channels.
Global video game streaming market share (excluding the Chinese) by hours streamed in 2018 and 2019
Facebook Gaming and Microsoft Mixer are growing fast
Most popular games in 2019
In 2019 the most popular games on Twitch were League of Legends, Fortnite, and Just Chatting. The big gainer in 2019 was Grand Theft Auto rising to fourth place.
The esports sector continues to evolve at a rapid pace. Given the big money is in sponsorship, media rights and advertising it should be no great surprise the big name streaming companies are fiercely competing to provide the best content.
As for who will win the ‘esports Streaming Wars’ it is a bit early to tell. Amazon Twitch has a big lead with 61% market share; however, it appears their competitors are starting to catch up, with Facebook Gaming and Microsoft Mixer rising rapidly.
Investors can look to play the whole sector via an esports ETF such as ESPO or NERD, the leading streamers (Amazon & Alphabet Google), the rising streamers (Facebook and Microsoft), or the diversified esports pure play stock Enthusiastic Gaming. Or perhaps some of the Chinese leaders, whom I might discuss in another report.
Matthew Bohlsen is a Senior Editor for InvestorIntel.com. With a Graduate Diploma in Applied Finance and Investment, and a Graduate Diploma in Financial Planning. He ... <Read more about Matthew Bohlsen>