The impact of the COVID-19 pandemic is being felt around the world by businesses across every industry. Due to the vast nature of the outbreak, esports research firm Newzoo has made some slight changes to its forecast for the industry in 2020.
While the changes are slight, the firm now predicts that the global esports market will make $1,059.3 million this year, down from the previous prediction of $1,100.1 million.
Despite the short-term prediction being lower, Newzoo actually adjusted long-term estimates upward. In addition to dropping this year’s estimates, the firm projected that the industry will make $1,598.2 million in 2023, up from the previous estimate of $1,556.7 million.
Newzoo explained that its revisions were driven by the “unprecedented situation” that is the COVID-19 pandemic. Due to the outbreak, numerous esports-related events have been canceled, postponed, or moved online, like the Overwatch League, Call of Duty League, and League of Legends’ top esports leagues.
Newzoo made sure to emphasize that revisions weren’t made to any decreases in supply or demand for esports.
Merchandise and tickets, media rights, and sponsorships are among the parts of the industry expected to be most affected by COVID-19. With many companies taking a hit in profits during this time, advertising and sponsorship activity is one of the first things to be slowed or cut completely by businesses that are non-essential.
Additionally, the lack of events being held plays a role in preventing the generation of ticket revenue and merchandise sales.
On the other hand, the firm made an upward revision for stream revenue. With a global quarantine and self-isolation ongoing, more people than ever are watching gaming platforms like Twitch, forcing Newzoo to predict a revenue of $19.9 million for that sector, up from the previously estimated $18.2 million.
Meanwhile, the company forecasts that stream revenues will be higher in 2023 as well, generating $34.4 million instead of the old prediction of $31.6 million.
Despite these slight revisions, Newzoo said that the esports industry could be affected more depending on how long the COVID-19 pandemic prevents events from taking place. If the outbreak causes a “ripple” effect throughout the course of the year, the firm will likely make more revisions to its forecast.