Before Netflix and Hulu, there was good old fashioned television, and with it came ratings, measured almost exclusively by Nielsen. The service provided by Nielsen helped determine advertising rates for TV and media businesses, quantifying the audience, viewership, and other demographic data critical to media monetization. As media and entertainment grows, so too does Nielsen, recently announcing the creation of Nielsen Esports, a new business focused on competitive gaming.
With the rapid growth of the esports market – some estimates have the industry generating close to $700 million in revenues in 2017 and nearly doubling to $1.5 billion by 2020 – it only makes sense that media companies want to get in on the action. Currently, a signifiant gap exists between the broadcast revenues of esports and traditional sports. One of the keys to boosting broadcast revenues is to measure the reach of the broadcast properly, said Greg Richardson, CEO of esports Team Dignitas (owned by the Philadelphia 76ers basketball team), in an interview with GamesBeat. Nielsens entry into this business is part of the quest for esports to reach greater legitimacy and higher revenues.
The recent entry into the esports arena by such notables as NE Patriots owner Robert Kraft and NY Mets COO Jeff Wilpon has further legitimized what was once considered a small market for teens and techies to play online games. Both Kraft and Wilpon are reported to have spent $20 million each for one of the first seven teams for the Overwatch League. The online multi-player game has more than 30 million players worldwide, according to Blizzard Entertainment.
Nielsen Esports will provide sponsorship valuation, fan insights, custom industry research and consulting services to rights holders, media platforms and brands around the world that are moving the esports market. Theres a high demand for reliable, independent measurement of value in esports, said Howard Appelbaum, president of Nielsen Entertainment, in a statement. Were excited to enhance our client offerings and provide the industry with solutions that will help guide and optimize investment decisions in this exciting, growing space.
Investment in esports and esport opportunities has been a key focus for game developer SPYR, Inc (OTC: SPYR). The Denver based mobile app and game publishing company continues to make strategic business decisions to establish the company on the leading edge of this young industry. With a licensing deal in place to integrate Star Trek (TM) intellectual property into their flagship game Pocket Starships – the version is scheduled to drop later this Fall – and enhancements to PvP capabilities, SPYR is well poised to continue to build value for its shareholders.
Nielsen has developed Esport24, a syndicated sponsorship tracking service for esports tournaments. The service measures brand exposure in esports tournaments representing a variety of titles, event formats and geographic locations based on the same methodology that allows traditional sports rights holders and brands to quantify value and benchmark performance. With the framework in place to actively and accurately measure viewership and participation in esports events, the industry as a whole may exceed expectations in terms of revenues, which could become value for shareholders of companies that develop and produce these increasingly popular games.