The Leisure Economy is Dominating the Videogame Industry

Fueled by new technology, more accessibility for consumers and new content models that act as growth accelerators for gamers, developers and publishers, the modern day videogame industry is booming. Over the past several years, new revenue streams have led to the rise of the Leisure Economy – which in the videogame industry represents the idea that gamers can earn a living by doing what they love – playing videogames.

The Leisure Economy is here to stay, and the industry understands the important roles and values gamers bring to the ecosystem. In 2018, the videogame industry far surpassed Newzoo’s market forecast of $115.8Bn by an additional $22.1Bn. The evolution and rise of professional gamer compensation, the impact of changing demographics on the gaming landscape, and Esports and influencers have drastically altered the gaming landscape and will continue to do so in the foreseeable future.

Professional Gamer Compensation

The videogame industry is nontraditional when it comes to compensation as evidenced by the incredible amount of income gamers generate from a viewer audience. Using services like Twitch, Mixer and Mobcrush, gamers can receive compensation ranging from to $.10 to $1 per hour per viewer count, plus income generated from that day’s sponsorships and donations. A videogame influencer like Ninja, who in May 2018 became the #1 social influencer in sports – beating out Cristiano Ronaldo, Neymar, Lionel Messi and LeBron James – averages 121,000 subscribers and can earn $400,000-500,000 in a single day by playing Fortnite.

With the advent of new technologies and streaming services, professional gamer compensation has risen at such at rapid rate that the industry has begun looking to new ways to compensate gamers that are transparent and fair. Shockingly, the average salary of professional gamers has increased by 347% since 2016, from an average of $2,800 to $12,500 a month. Sponsors have increased compensation to professional gamers by nearly 700% since 2016, with total compensation reaching as high as $4,000,000 per year, and prize pool compensation has increased by 2,400% since 2016, with pools now ranging from $50,000 to as high as $25,000,000.

Gamer Demographics & the Rise of Women

New accessibility to a variety of games are rapidly changing demographics among gamers, particularly among women who are quickly approaching men in terms of purchasing power within the videogame marketplace. Mobile and PC gaming in particular have made it easy for women to play videogames, leading to an increase year over year in total videogame marketplace share for women.

While 81.5% of Twitch users are male, research shows women are increasingly dominating the videogame marketplace. In 2016, women represented 47% of the videogame marketplace, and in 2019 that number is expected to change to 50%. Since developers know their audience is relatively split evenly between sexes, the industry is beginning to see an increase in female lead characters and new games designed with both parties in mind. With the right game, female influencers will eventually rise and play a major role in the Leisure Economy.

The Future of Gaming: Esports, Influencers and Twitch

Professional gaming has continued to evolve with new structures set by powerful leagues like Overwatch and Esports teams, which now hold significant monetary value in the space. In fact, Esports events have become so big, that their total monetary value surpasses the biggest events on the planet, including the Super Bowl.

The rise of Esports began with the popularity of League of Legends, and as the game grew in popularity, Twitch became the only destination to officially watch the stream. The League of Legends Twitch channel became the first to ever reach 1 billion views. In May 2018, the Mid-Season Invitational brought in 127 million viewers which topped this Superbowl 2018’s 103 million viewers. Today, Twitch has 15 million daily active users, 2.2 million creators, 27,000 members in the Twitch Partner Program, and averages 23 billion minutes of viewed content per month.

YouTube, Twitch and the many other media channels created for the industry are the key drivers behind gamers becoming celebrities and influencers within the industry. The earning power of videogamers as part of the Leisure Economy is so significant that four of the top six YouTube earners are videogame influencers – all earning more than $10 million annually from their channel alone.

In short – the Leisure Economy is not just growing – it’s booming, and the growth trend is expected to continue. There is no ceiling for the videogame industry, and there is definitely no ceiling for the Leisure Economy.

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