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E-Sports Industry Revenue To Hit $1.1B By '18; Does Riot Games Have Too Much Power?

The e-sports industry currently takes in $892.8M in total revenue, and by '18, that figure is likely to grow to $1.1B with the growth of direct revenue from sources such as betting sites and amateur tournament platforms, according to a new report from market research firm SuperData. The $892.8M figure is up 19% from last year, with Asia being the largest market, accounting for $328M. North America ranks No. 2 at $275M, followed by Europe at $269M. Sponsorships and advertising account for nearly 75% of the $892.8M in revenue ($661M), with prize pools at 9% ($78M) and betting/fantasy sites at 7% ($59M). The report estimates that over 213.8 million people currently watch competitive video gaming, with that figure on pace to hit 303 million by '19 (Superdata). However, BROADCASTING & CABLE's Chris Tribbey cites Superdata figures as showing that the growth rate for e-sports revenue is "starting to see a worldwide slowdown" compared to recent years. Meanwhile, the data also found that Riot Games' "League of Legends" competition is "both the most-watched and highest-grossing eSports endeavor," generating $737M in revenue and 96 million monthly average users between January and May of this year (BROADCASTINGCABLE.com, 7/26).


LOOKING TO GO BIG: MASHABLE's Chelsea Stark noted Chinese e-commerce firm Alibaba on Tuesday made a $150M investment in the Int'l E-Sports Federation, with the money being used to "help 'e-sports be recognized as sports,' including securing participation in the Olympic Games." The investment includes a $5.5M prize pool "for an upcoming tournament, the World Electronic Sports Games." Alibaba also "plans to build esports stadiums in China." The IESF was founded in '08 and has 45 member nations (MASHABLE.com, 7/27).
 
RIOT ACT: ESPN.com's Jacob Wolf wrote while "every major sports league in the world has rules, and most, such as the NFL, NBA and MLB, have an appeals process," the "League of Legends" competition and its organizer, Riot Games, sit as "investigator, prosecutor, judge and jury." Riot in May "permanently banned" the Renegades team from its competition for ownership-related issues, marking "one of the harshest punishments ever levied on an esports team." The move "potentially cost the team" and its co-Owners, Christopher Mykles and Chris Badawi, "millions of dollars of future revenue and sponsorship opportunities." Riot's rulings against Renegades, and specifically Badawi, "who was already banned for a year for attempted poaching, are far more severe and come with more consequences than the rulings before it." Without "third-party oversight or a transparent and consistent process, rulings such as this will be questioned in the future, especially with the ever-increasing influx of money into esports in general, and League of Legends in particular." Additionally, some traditional sports organizations "have become timid" about investing in the "League of Legends" competition "because it appears that teams can be forced out without proper discourse" (ESPN.com, 7/26).

SENSITIVITY TO VIOLENCE: The DAILY DOT's Sam Nordmark reported a German satellite channel has pulled ELeague, which features the game "Counter Strike: Global Offensive," "from its schedules in the aftermatch of recent gun violence incidents in the country." Germany has a "long history of censoring or even removing certain sections of games due to graphic content" (DAILYDOT.com, 7/27). ESPN.com's Wolf noted the channel, ProSieben MAXX, was "originally set to broadcast ELeague's semifinals and finals" tomorrow and Saturday. The competition, organized by Turner Sports and WME-IMG, "will include German national team mousesports" (ESPN.com, 7/27). Meanwhile, ELeague and Twitter today announced the semifinals and final will be streamed on Twitter, marking the first e-sports event to be presented live on the platform (ELeague).

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