Gaming and esports analytics firm Newzoo has revised its 2020 esports revenue estimates due to the continued impact of the COVID-19 pandemic on the industry, particularly with regards to live events. The revised estimate has been reduced from $973.9M USD globally to $950.3M.
Newzoo (which is part of Leaders Group, the portfolio of which includes The Esports Observer) noted that while neither supply (number of organizers) nor demand (size of the audience) has decreased, the number of canceled or postponed events necessitated an adjustment.
Without live events, ticket sales are virtually non-existent, and merchandise will be significantly affected. According to Newzoo, impulse buys of merchandise products at live events impact revenue for the category. As a result, merchandise and tickets revenue has had its 2020 forecast reduced from $76.2M to $52.5M.
However, Newzoo did note that some companies may be able to recoup some lost revenues from live events through other means depending on their ability to transition to digital/online strategies. The report highlights how Riot Games has been able to see viewership growth for its League of Legends pro leagues despite the shift to online play. Riot was also able to secure a number of first-time sponsors for its World Championship, while other esports such as Dota 2 have been hurt significantly by the loss of their major international events.
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