During this week, G&M News will be sharing essential info about Brazilian market. This third article is analyzing current trends in the relationship between Brazilians, Esports and Video Games. For this purpose, we have used the ‘2020 Global Esports Market Report’ from Newzoo (a global provider of games and Esports analytics), as well as the whitepaper ‘Esports in Brazil: Key facts, figures and faces’, from Esports Bar and Newzoo 2018), and some video games data from well-recognized German online portal Statista.
A GENERAL OVERVIEW
In order to have a context in which to locate the Brazilian reality, it is important to mention some general statistics that Newzoo offers about Esports at a worldwide level. According to that company, at the end of 2020, the global Esports economy will generate revenues of US$1.1 billion, a year-on-year growth of +15.7%. Most of these revenues (74.8%) will come from sponsorships and media rights, which will total US$822.4 million, a +17.2% increase from last year. Consumer spending on tickets and merchandise will total US$121.7 million, while another US$116.3 million will come from game publishers’ investments into the Esports space. The global Esports audience will reach 495 million this year (+11.7% vs. 2019), made up of 222.9 million Esports Enthusiasts (+10.8% y-o-y) and a further 272.2 million Occasional Viewers. In 2020, the average revenue per Esports Enthusiast will be US$4.94, +2.8% from 2019. As the Esports market matures, new monetization methods will be implemented and improved upon. Likewise, the number of local events, leagues, and media rights deals will increase. That’s why the average revenue per fan will rise to US$5.27 by 2023. In 2019, there were 885 major events. Together, they generated US$56.3 million in ticket revenues, up from US$54.7 million in 2018. Total prize money in 2019 reached US$167.4 million, a slight increase from 2018’s US$150.8 million.
Mobile Esports enjoyed a huge spike in the past year, with emerging markets like Southeast Asia, India, and Brazil at the forefront of this growth. As such, emerging Esports markets will show the highest CAGR (2018-2023), with regions such as Southeast Asia (+24% CAGR) and Latin America (+17.9%) accelerating to close the gaps between themselves and older, more developed Esports markets. Brand-building will prove crucial in the coming years, with the strongest brands attracting the most fans and, in turn, gathering the most power in the business. The prevalence of lite apps, combined with the success of games like PUBG Mobile and Garena Free Fire, has solidified competitive mobile gaming as a popular pastime in these emerging markets. Naturally, competitive scenes in these games have also exploded in popularity across growth markets, contributing to a huge jump in live viewership numbers for mobile Esports. In fact, viewership jumped from 15.3 million hours in 2018 to 98.5 million in 2019, an increase of more than 600%.
BRAZIL UNDER THE ESPORTS MICROSCOPE
Following Statista data about Brazil, in 2020, smartphone games are expected to be the largest revenue source of the Brazilian gaming industry, generating US$533 million. Online PC games will bring US$409 million and console games, another US$238 million. Esports championships will create revenues of over US$1.7 million. Total gaming market in Brazil is expected to be worth US$1.66 billion by the end of 2020.
Currently, Brazil has more than 76 million gamers that spend (annually) more than US$38 each. The country is #3 in the world in terms of Esports Enthusiasts (86% aged between 10 and 35 years old), with 7.6 million people (5.3% of the online population) watching professional content more than once per month. The market is divided between Occasional Viewers (59%, watch Esports less than once in a month) and Enthusiastic Viewers (41%). Besides, when 2020 is ending, there will be almost 30 million Brazilians watching Esports in some device. However, of the total of Enthusiastic Viewers, only 4.3 million also watch soccer real matches. Other indicators show that 13% of the online population in Brazil watches game related video content; and 29% of people who watch video game content in Brazil also watch Esports content (much higher than in Mexico, with 19%, and Argentina, with 22%). A curiosity (or not) is that lots of people watch Esports, but don’t play those titles.
On top of that, Brazil has given rise to many globally successful teams and strong local influencers. Many top tier international teams have highly skilled Brazilian players in their roster, especially in Counter Strike: Global Offensive (CS:GO). Local heroes have hundreds of thousands of followers on social media (Instagram, Twitter and Facebook) and Brazilian broadcasters (like Riot Games Brazil) are racking up millions of viewing hours on Twitch. Some of those heroes are Gabriel ‘FalleN’ Toledo, Epitacio ‘TACO’ Pessoa (both, CS:GO players), Felipe ‘brTT’ Gonçalves (League of Legends, LoL) and Leo ‘ziG’ Duarte (Rainbow Six Siege).
There are some examples to mention that explains Esports increasing popularity in Brazil. Historic soccer club Flamengo launched its Esport division in 2017. Flamengo announced a League of Legends roster and a dedicated training facility. Besides, the prominent former Brazilian soccer player Ronaldo invested in CNB e Sports Club, alongside poker players André Akkari and Igor Trafane. The team, founded in 2001, currently competes in FIFA, League of Legends, and Arena of Valor. A successful case in gaming is Wildlife Games, one of the largest mobile-gaming companies in Latin America. This Brazilian creative studio was founded in 2011, and today has a team of more than 400 people spread around several countries like Argentina, Brazil, Ireland and the United States. Throughout its history, the company has launched more than 100 titles (including Tennis Clash and Zooba) and exceeded the 1.5 billion mark of downloads, ranking among the 20 largest app publishers in the world.
VIDEO GAMES ON THE RISE
While all other digital media market segments have already gone through small revolutions caused by new business models like subscription-based services, the video games market is only at the beginning of this development. About video games revenue in Brazil (Statista, July 2020), the combination of mobile games, download games, online games and gaming networks will represent a total amount of US$821 million. Statista estimates revenue will elevate 13.52% to US$932 million by 2022, and 23.14% to US$1.01 billion by 2025. Then, revenue is expected to show an annual growth rate (CAGR 2020-2025) of 4.3%.
The market’s largest segment is Mobile Games, with a projected market volume of US$380 million by the end of 2020. In this segment, the number of users is expected to amount to 67.0 million by 2025. On the last year, 36.0% of video games users were in a range of 25 to 34 years old, followed by 27.2% of users between 18 and 24 years, and a 24.7% between 35 and 44 years. User penetration will be 28.4% in 2020 on Brazil, and is expected to hit 44.8% by 2025. The average revenue per user (ARPU) is expected to amount to US$6.30 in 2020.
