Esports viewership – Breaking down the Goldman Sachs report

On June 26 2018 Goldman Sachs published a report on esports and their projections for the future. They project that the total esports viewership will reach 276 million by 2022. This might seem like a giant opportunity for a single market segment, but all things are not what they seem. Let us break down what these numbers mean.

Looking at Goldman SachsEsport is many different sports

The first thing to realize is that esports is not one thing. It is not comparable to the NFL, NBA or any of the other pro sports in the US. Although some esports work on a franchise model, like LoL and Overwatch, other games such as Dota 2 and CS:GO does not. For the same reason esports is not like the Olympics, it does not have an umbrella tournament on a regular basis where all the esports gather to compete. Esport consist of many different sports. Therefore esports viewership consists of many different groups.

Total esport viewership is a mistaken metric

Although LoL and Dota 2 are very similar, the overlap in the audience is very small. You then have further segmentation with the Battle Royale games such as Fortnite and H1Z1, and even further again with the CS:GO and similar titles. This is without mentioning games like Hearthstone, Fighting Games, etc. Although there are some overlap it is incidental to the game being an esport. Just as a person can enjoy both basketball and football, it says nothing about the different games in themselves.

Goldman Sachs is putting focus on a metric that mistakes the core of the esports audience. It looks at it in a singular way, as if a singular entry into any esport market will have equal benefit. This is simply not true.

Game producers and influencers

It is important to look at the driving factors behind different esports. The factors are first and foremost the company that produce the game. Thus companies such as Valve, Riot Games, and Epic Games are much more important for esports than any other single factor. Take the $100 million that Epic Games are putting into Fortnite for example. Since main drivers behind esports are competing with each other, there is no reason why a unified esports community will emerge.

The other main factor to look at is influencers and streaming. What reach does popular Twitchers, Youtubers, and other streamers of a game have. What games they are playing — whether it be an esport game or another game — matters more for anyone who wants to gain access to the audience Goldman Sachs mislabel “esports viewers”.

In conclusion: Yes, the total of esports viewership will grow immensely in the years to come. However, this has more to do with how our consumption of content will change, rather than there being a single unified esports community. So although the numbers will impress potential investors, it should not. Understand that esports is a term as wide and disparate as the word sports is itself. Nothing more, nothing less.