The Esports Industry to Date Client Director the Drivers Behind Current and Future Growth San Francisco

Emily Souza The eSports Industry to Date Client Director The Drivers Behind Current and Future Growth San Francisco

ESL ONE COLOGNE LCS NORTH AMERICA FINALS CS:GO LEAGUE OF LEGENDS LANXESS ARENA, COLOGNE MADISON SQUARE GARDEN, NYC

>100 >50 THOUSAND MILLION LCS EUROPE FINALS VIEWERS OGN MASTERS LEAGUE OF LEGENDS ATTENDEES HEARTHSTONE HOVET ARENA, SWEDEN YONGSAN ESPORTS STADIUM, SEOUL

9 SEPTEMBER 2015 | SAN FRANCISCO © 2015 Newzoo www.newzoo.com © 2015 Newzoo www.newzoo.com What’s Special? What’s Special? $1.2M Per Player is Prize Pool $16M Was Crowd more than the $18M Funded by $2.50 2014 Soccer World of every $10.00 Cup 3rd Place Prize donation, making Money. Winning Team Valve $54M $6M

New Direct Esports-Related Revenue Streams

1,000,000 200,000

180,000

160,000

140,000 900,000 120,000

100,000

80,000 800,000 60,000

40,000

20,000

700,000 -

Average Daily DotA 2 Players Average Weekly DotA 2 Players DotA2 Twitch Viewership

SOURCE: GLOBAL GROWTH OF ESPORTS REPORT PREMIUM | Q3 2015 UPDATE

THESE COMPANIES CURRENTLY SUBSCRIBE TO NEWZOO’S SERVICES The Experts On All Things Games. We are an innovative global market research and predictive analytics firm with a primary focus on games. We provide our clients with a mix of market trends, financial analysis, revenue projections, consumer insights, data modelling solutions and predictive analytics services across all continents, screens and business models. Newzoo works for the majority of top 25 public companies by game revenue globally, many independent game developers as well as leading global hardware and media companies.

SAN FRANCISCO AMSTERDAM SHANGHAI

“PC gamers have grown to expect a high quality game, with the ability to invest oneself long term, due to persistent profiles, online worlds, a way to play with friends etc. PC game developers have always understood that and delivered the type of experience that keeps gamers playing their games for month even years at a time.” - Donovan Duncan, VP Marketing, Curse Inc.

“As one of the fastest growing sports in the world, eSports only lacks exposure and deeper understanding. Newzoo has been significant help to eSports in that regard. Their reports have the shaped initial understanding of the market as their information is clear and allow deep insight in a rather unexplored business.” - Fabian Mallant, Manager Unicorns Of Love

“Publishers will want to take a strategic look at their video sharing infrastructure based on the convergence of games and video. The business opportunities are just beginning to emerge, but clearly this new surge in gaming creativity will demand tremendous scalability and innovative solutions.” - Anne Blanchard, Gaming Solutions, Limelight Networks,

e.g. e.g.

e.g.

Revenues Prize Money KEY FACT 2015 | Esports| Global, NAM , APAC 2014 vs 2015e | Esports | Global $71M Of all eSports +97% YoY viewers

37% GLOBAL 34% $36M e $252M 2015 +30% YoY +82% YoY NAM APAC 40% 2014 2014 2015 $93.2M $85.2M JAN-MAY JAN-MAY does not play +32% YoY 29% +28% YoY $7.9M $15.7M the games themselves Audience | 2015 | Esports | Global

Esports Enthusiasts Occasional Viewers 113M +27% YoY Spectator Sport 17M 25M 70M 147M

Source: Newzoo, The Global Growth of Esports: (>once a month) (>once a month) Trends, Revenues & Audience Towards 2017

ESPORTS ENTHUSIASTS ARE A VALUABLE TARGET GROUP IN TERMS OF DEMOGRAPHIC PROFILE & ARE BIG DIGITAL MEDIA SPENDERS

vs. 37% of the total population vs. 48% of all gamers 30% 55% Is in the high Is between 21 income bracket and 35 years old

vs. 22% of the total population vs. 33% of all gamers

Device used to eSports Enthusiasts Occasional Viewers Total Population That watch online video That watch online video That watch online video watch online video 10.1 Million 13.0 Million 120.7 Million

United States 34% of Esports enthusiasts use a tablet to watch online video content versus 22% for the average American aged 10-65

2014-2018 CAGR +38.9% Biggest Audience KPI Growth: Occasional Viewers $520M Becoming True Esports Enthusiasts $452M YoY GROWTH YoY GROWTH +43.4% +29.6% $278M NEW $252M Q3 $194M NEW UPDATE Q3 UPDATE

2009: Korea’s Esports Scene Takes a Blow 2014: US & China Lead $71.0Me Legislations in South Korea implementing bans and curfews Korea has never fully on gaming, a feud between the Korean Esports Association recovered, rendering and Blizzard, and the falling popularity of Starcraft the US today’s #1 in contributed to the dip in prize money in South Korea the accelerating +97% between 2008 and 2012. Since then, esports broadcaster esports market, with MBC was discontinued and OnGameNet is a much smaller China close on its YoY operation whose content is no longer broadcasted on TV …. heels ....

In 2007, $36.0M MBC Game and OnGameNet -48% reportedly made $200M in YoY $19.8M esports revenues, mainly $13.1M through broadcast TV $9.7M $6.1M $6.4M $5.2M $3.6M $4.4M $3.5M

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e

Source: Newzoo, The Global Growth of Esports: Trends, Revenues & Audience Towards 2017 © 2015 Newzoo www.newzoo.com Betting & Fantasy Leagues Where there is competition, there is betting… 9 SEPTEMBER 2015 | SAN FRANCISCO

EXAMPLES OF START-UPS AND TRADITIONAL FORCES JUMPING ON THIS GROWING NICHE

eSports is Pinnacle’s 7th Biggest market in terms of volume, bigger than Golf & Rugby

Eilers Research estimates: $23 billion (!?) in 2020.

PLAYING FOR REAL MONEY IN ONLINE CASINO’S | US | 2015 BETTING/WAGERING ON REAL-TIME EVENTS (E.G. HORSE/SPORTS) | US | 2015

33% Of Esports Enthusiasts Already is Your Client, vs 15% for Gamers and 8% for All.

THE NUMBER OF GAMERS COMPARE WELL WITH SPORTS FANS, ESPORTS COMPARABLE IN SIZE AS INDIVIDUAL SPORTS

All All Individual Esports Sports Gamers Sports Enthusiasts vs. vs.

2.2Bn 2.1Bn 1.7Bn 151M 1.6Bn 145M

94M 89M

REVENUES PER ESPORTS FAN COMPARED TO THOSE OF SPORTS SHOWS POTENTIAL

All $3.0Bn Sports Alternative Optimistic TOTAL ESPORTS $56 REVENUES $15 Scenario $1.1Bn Individual Sports $1Bn $7 $5 Report AVERAGE $20 REVENUE PER Scenario ENTHUSIAST $3$3 $1.0Bn Repucom $2

NEWZOO REPORTS “Power to the People” | “The Consumer As Producer”

2015

EXPERIENCE CREATE

MOVIES/GAMES ART/DESIGN Made by “professionals” PRO PRO Made by “professionals”

CONSUMER GENERATED Enabling Platforms & Tools CONTENT & DIRECT Curse, Twitch, YouTube CONSUMER EARNINGS Channels, Fundly, “POWER TO Instagram … THE PEOPLE”

ADVERTSING/MAIL SHARE PRO Made by “professionals”

More Genres Competition Regulations Alignment of Traditional & Geographic Depth & Content Rights & Digital Media

15TH OF JULY 2015 10TH OF AUGUST 2015 $20,000 PRIZE MONEY $26,000,000 IN FUNDING

Emily Souza Client Director [email protected]

FULL 68-PAGE REPORT AVAILABLE NOW. PREMIUM SERVICE INCLUDES QUARTERLY UPDATES. NEXT UPDATE: 15 SEPTEMBER