FNATIC INSIGHTS: COVID REPORT INSIGHTS: ESPORT COVID UPDATE

INTRO

As the human tragedy of COVID-19 continues to unfold, its harsh impact on business will have repercussions for years to come. Social distancing, border closure and self-isolation have damaged the entertainment, sports and leisure industries in particularly acute ways.

Strict lockdown restrictions, and the need to keep adults and children alike busy and engaged, created an unprecedented scarcity of choice and availability of new entertainment. Esports has been perhaps the most substantial beneficiary of this shift in attention.

As the vast majority of households globally now have access to an internet-connected entertainment device, the short tap to mobile gaming or app-based streaming made gaming and esports the most immediately-available distraction from the grim events dominating the news cycle.

Viewers who found themselves “completing Netflix” increasingly turned instead to the world of live and VOD content, many for the very first time. What they discovered there was a level of interaction and engagement with creators and celebrities that outstrips traditional TV and OTT platforms.

In this report, we will explore the effects of COVID-19 on esports events and their move to online broadcasting, the effects on publishers and game developers including revenues, the “drive to live” for esports content, and finally, the rapid embrace of esports by traditional sports. FNATIC INSIGHTS: ESPORT COVID UPDATE

01. EFFECTS ON ESPORTS FNATIC INSIGHTS: ESPORT COVID UPDATE

OFFLINE EVENTS: AFK

While COVID-19 was still in its early stages of development as a global pandemic, esports was one of the first industries to take decisive action to limit access to live events for supporters.

Given the relative immaturity of esports to traditional sports, it’s interesting (and a positive indicator of overall industry maturity) that esports tournament organisers were arguably the more proactive operators in managing the initial risks of COVID-19.

For example, several weeks prior to the ‘business as usual’ completion of the UK’s Cheltenham Festival racing event (10-13 March) and the UEFA Champions League fixture between Liverpool and Atlético (11 March), ESL’s IEM CS:GO ‘major’ took place behind closed doors; and thereafter almost all major esports competitions moved rapidly to a wholly online set-up.

Even if the bulk of spectators are viewing online, closing the doors of a major esports event wasn’t a step to take lightly. As well as a platform to sell merchandise and activate the esports community, live esports events offer an opportunity for sponsors to speak directly to fans, and for teams to showcase the passion of their communities to those sponsors.

For non-endemic sponsors, high-attendance esports arena events also provide a comfortable jumping- off point for a first investment into esports, given their similarity to live sporting or convention-style activations.

intelextrememasters.com, IEM Katowice 2020 FNATIC INSIGHTS: ESPORT COVID UPDATE

ONLINE IS BACK (AND BETTER THAN EVER)

Following the changes to IEM Katowice, COVID-19 ESPORTS EVENTS RESPONSE forced other league and tournament organisers across all titles to change their events. Some 31.6% - shifted online 23.5% - cancelled cancelled or postponed their events - but most shifted them online, taking esports back to its early local network-based roots.

The variations did not stop at the shift from physical to digital. We also saw:

Restructuring of several tournament series into regional leagues (instead of standard qualifier- to-international-tournament pathways). For example, the CS:GO competition DreamHack Masters, which was scheduled to take place live in Jönköping, Sweden, transitioned to a regional 44.9% - postponed format.

Increased focus on community activation by FOR THE PERIOD FROM JAN-MAY 2020, 98 developers, via community-based and ‘pro-am’ TOURNAMENTS OR EVENTS WERE CANCELLED tournaments. After cancelling the upcoming IN TOTAL[1] Rainbow Six Siege events, Ubisoft announced weekly, cross-platform, fully open online community tournaments.

DreamHack Masters Spring 2020: | Dot Esports

[1] EsportsObserver , ESPN / Liquidpedia FNATIC INSIGHTS: ESPORT COVID UPDATE

ECONOMIC IMPACT

While physical esports events will return eventually, MODERN TIMES GROUP Q1 20 UPDATE (OWNER ESL/DREAMHACK) teams and developers have seen the scale benefits of well-organised online events. Contractual REVENUE IN OUR ESPORT VERTICAL IS restrictions applied by developers to online activations in the pre-COVID world (and particularly EXPECTED TO DECLINE BY 25-35 PERCENT to the use of team sponsor content in in-game IN 1H 2020, COMPARED WITH OUR inventory) have been temporarily disabled. This has CORRESPONDING PERIOD IN 2019[2]. led to a bigger inventory of online assets for teams to monetise online.

As the organisations most reliant on the physical 2020 ESPORTS REVENUE STREAMS (GLOBAL) of esports, tournament and league - NEWZOO APRIL 2020 REFORECAST operators have taken the most substantial hit from $614.9M +13.1% offline event cancellations. For example, while YoY Modern Times Group (the parent company of both digital festival company DreamHack and esports events company ESL) announced a small (2% YoY) Q1-20 net sales decline, principally driven by a decline in esports segment of 11% (due to events properties being moved online or not happening altogether). $176.2M +11.5% YoY $120.2M Additionally it predicts its operations vertical to drop -2.5% $106.5M [2] YoY +0.8% 25-35% for H1-20 overall . YoY $21.5M $19.9M +60.9% +44.9% YoY YoY In line with this, esports consulting agency and data Sponsorship Media Merchandise Publisher Digital Streaming service Newzoo has revised its estimate of total Rights & Tickets Fees esports revenues for 2020 to $1.06B, down from its previous estimate of $1.1B (but still up YoY vs 2019). Newzoo’s re-forecast predicts the biggest percentage revenue drop off in the “merchandise and tickets” vertical (down 12.2% / US$15m), which is mainly connected to offline events, along with a decrease in “media rights” (down 4.8% / US$176M) and “sponsorship” ( down 3.4% / US$615M) categories. On the other end, they plan an increase in the “streaming” (up 9.3% US$19.9M) and “publisher fees” (up 3.3% / US$120.2M) categories (see graph for full picture).

[2] MTG press release FNATIC INSIGHTS: ESPORT COVID UPDATE

02. EFFECTS ON PUBLISHERS FNATIC INSIGHTS: ESPORT COVID UPDATE

MORE FREE TIME, MORE GAMING?

Pre-COVID it was already the case that gaming’s NUMBER OF PLAYERS OF : WARZONE share of time and wallet was increasing, particularly WORLDWIDE AS OF APRIL 2020 among young people - but COVID hyper-accelerated 60 50 that trend.

30 Per Nielsen, 4 out of 5 global consumers played video 30 games or watched video game content during the 15

height of the COVID-19 pandemic lockdowns. in millions Number of players 6

0 Mar 10, 2020 Mar 13, 2020 Mar 20, 2020 Apr 10, 2020 In general the industry saw a 46% daily active user increase in PC gaming and 17% increase in mobile THE FREE-TO-PLAY CS:GO SAW AN INCREDIBLE RISE IN gaming. This led to a growth in microtransactions, PLAYER BASE with In-App Purchase (IAP) Revenue for mobile 1400 games increasing by 24% since the pandemic was [3] declared . 1200

All in all Superdata[4], game spending reached $10.5B 1000 in April 2020 (+17% YoY), with earnings growing in PC 800 (+12% YoY), mobile (+14%) and console (+42%).

600 Predictably, social distancing measures also led to an in thousandsNumber of players increase in online play. Almost a third of of US-based gamers reported spending more time gaming with 400

Jan ‘16 Jul ‘16 Jan ‘17Mar ‘17 Jul ‘17 Nov ‘17Jan ‘18 Jul ‘18 Jan ‘19 Jul ‘19 friends online. Median playtime on Steam (a platform Mar ‘16May ‘16 Sept ‘16Nov ‘16 May ‘17 Sept ‘17 Mar ‘18May ‘18 Sept ‘18Nov ‘18 Mar ‘19May ‘19 Sept ‘19Nov ‘19Jan ‘20Mar ‘20May ‘20 for developers of all sizes to launch games) increased, as did peak concurrent play (20.31M in March 2020, roughly 2x April 2017). MONTHLY NUMBER OF PEAK CONCURRENT PLAYERS OF ON STEAM WORLDWIDE FROM JANUARY 2016 TO MAY 2020

125

115

105

95

85

75

65 Number of players in thousandsNumber of players 55

45

35

Jul ‘17

Jul ‘19

Jul ‘18

Jul ‘16

Apr ‘17

Oct ‘17 Apr ‘19

Oct ‘19

Jun ‘17 Jan ‘17Jan Apr ‘18

Oct ‘18 Jun ‘19 Jan ‘19Jan

Feb ‘17

Apr ‘16

Feb ‘19 Jun ‘18 Jan ‘18Jan

Oct ‘16

Nov ‘17Nov Aug ‘17Aug

Mar ‘17

Feb ‘18 Nov ‘19Nov

Aug ‘19Aug

Mar ‘19 Jun ‘16 Jan ‘16Jan

Dec ‘17

Apr ‘20

Dec ‘19 Nov ‘18Nov Aug ‘18Aug

Mar ‘18 Feb ‘16

May ‘17May

Dec ‘18

May ‘19May Nov ‘16Nov Aug ‘16Aug

Mar ‘16 Jan ‘20 Jan

Dec ‘16 May ‘18May Feb ‘20

May ‘16May Mar ‘20

May ‘20 May Sept ‘17

Sept ‘19

Sept ‘18 Sept ‘16

[3] Unity Monetization report, data for March 8th to May 4th [4] Super data research FNATIC INSIGHTS: ESPORT COVID UPDATE

DEVELOPERS FTW

ELECTRONIC ARTS INC. Q1-20 saw further cementing of the central role of developers to the esports ecosystem. Nintendo’s 128.12 USD +2.39 (1.90%) ↑ soothing Animal Crossing: New Horizons helped 130 double sales of its Switch console, with overall [5] 120 console sales increasing YOY by 61% . More Animal Crossing: 110 recently Nintendo announced that New Horizons had sold 13.4 million copies since it 100 launched on 20 March 2020, making it the highest 90 selling game in the series’ history[6] and the best-

80 selling Switch title (by units and in-game revenue) of Feb 2020 Apr 2020 May 2020 Jun 2020 all time - quite a feat in two months.

In turn, record engagement and spending in games ACTIVISION BLIZZARD, INC. led major gaming publishers to outperform the market 75.41 USD +2.41 (3.30%) ↑ on the basis of strong results for the first quarter of the year. 130

120 In Q1 2020 Zynga (+27% stock price, +52% rev growth), Activision (+23% stock price, -2% rev 110 decline), Electronic Arts (+8.5% stock price, +%12 100 rev growth) and Take-Two (+6% stock price, +% 90 rev growth) were bright lights in an otherwise bleak

80 picture for shareholders (S&P 500 overall -9.3%). Feb 2020 Apr 2020 May 2020 Jun 2020

TENCENT HOLDINGS LTD

450.60 HKD +1.80 (0.40%) ↑

130

120

110

100

90

80 Feb 2020 Apr 2020 May 2020 Jun 2020

[5] Nintendo, Q1 results [6] GameIndustryBiz, at 8 May 2020 FNATIC INSIGHTS: ESPORT COVID UPDATE

03. EFFECTS ON VIEWERSHIP FNATIC INSIGHTS: ESPORT COVID UPDATE

ESPORTS VIEWERSHIP: MAJOR TOURNAMENTS

Among developers, Riot was the most-watched, with nearly 500M watch hours in Q1-20 (vs 350M for Valve and 290M for Epic)[7]. Riot’s European Championships Spring Split saw 32M watch hours (+4.7M), with a peak of over 813K (vs 478K) watching arch-rivals G2 beat Fnatic in the final. In contrast to Newzoo’s predictions (see “Offline Events: AFK”), we expect these numbers to lead to improved returns for some of the major leagues.

Now armed with stellar watch hours numbers among extremely attractive demographics, developers will be looking forward with interest to upcoming negotiations with streaming platforms and an increased interest from linear broadcasters.

Fnatic at the LEC Summer Split 2020,

MOST WATCHED TEAMS DURING COVID (MARCH 1ST - JUNE LEC SPRING GROWTH IN COMPARISON TO 2019 30TH)

17% YoY Team Peak CCU Hours Watched 32.2M 1 Fnatic 817K 27.2M HOURS WATCHED 2 1M 26.1M 71% YoY 817K 3 317K 24.7M PEAK VIEWERS 4 / Origin 489K 19M

PRO LEAGUE EU GROWTH IN COMPARISON TO 2019 5 FaZe Clan 458K 18.2M 6 Vitality 317K 18M 454% YoY 33.9M 7 379K 12M HOURS WATCHED 8 294K 8.5M 490K 203% YoY Games included: CS:GO/Dota2/LoL/RainbowSix PEAK VIEWERS Data provided by

[7] Esports Charts, Streamlabs FNATIC INSIGHTS: ESPORT COVID UPDATE

TWITCH: FULL STREAM AHEAD

Yes, YouTube Gaming saw 1.1B watch hours in Q1-20 (average CCV at nearly 0.5M); and yes, Facebook Gaming also saw increases, reaching 0.5B watch hours for the quarter; CCV also increased by 15.5% QOQ.

However, among online platforms, the real winner was . The platform experienced a 17% increase in hours watched compared to the previous quarter and represents 65% of the market share compared to the other platforms. Average concurrent viewership on Twitch increased (MOM) by 16% from February to March 2020, and then again by 55% into April; for the first time ever, Twitch surpassed 3 billion watch hours in a quarter (3.1B, Q1-20, i.e. roughly double YouTube Gaming and Facebook combined).

These numbers build on Twitch’s explosive growth as a streaming platform over recent years, with watched minutes roughly doubling from 2017 to 2019, and up nearly 32% YoY. As the cherry on top of the cake, Twitch’s erstwhile competitor Mixer saw overall viewership and concurrents drop (by -7.3% and -5% respectively)[8]. TOTAL HOURS WATCHED IN Q2 2020

11.0% - Facebook 1.4% - Mixer

20.0% YouTube Gaming 67.6% - Twitch Twitch [8] Streamlabs FNATIC INSIGHTS: ESPORT COVID UPDATE

Streamlabs, the much-hailed software suite of choice for many streamers, pulled together their Q2 report of the streaming landscape and had this to say:

Twitch smashed its previously set records for hours watched, hours streamed, unique channels, and average concurrent viewership.

Facebook Gaming reached 822 million hours watched on the platform, tripling its numbers year-over-year.

The number of unique channels on Facebook Gaming increased 55% from last quarter and tripled year-over-year.

Hours watched on YouTube Gaming Live increased 39.6% quarter-over-quarter. Streamlabs and Mixer logos

VALORANT was the most-watched game on Twitch in a single quarter with 534 million hours, beating Fortnite which peaked at 399 million hours in Q2 of 2018. NO MORE MIXER

IN THE BATTLE FOR LIVESTREAM VIEWERS The number of unique channels on Mixer reached AND WATCHED HOURS, GOOGLE MADE A MOVE all-time highs in Q2. However Microsoft’s made a stunning announcement on 22 June 2020 that INTO DISTRIBUTION DEALS BACK IN JANUARY - it would close the platform and transfer Mixer SIGNING AN EXCLUSIVE DEAL WITH ACTIVISION ‘partners’ to Facebook Gaming. BLIZZARD TO STREAM THEIR ESPORTS TOURNAMENTS SUCH AS COD AND OWL ON This leaves over 5 million Mixer channels that YOUTUBE LIVE[9]. need to choose another platform to stream on, further confirming the consolidation of streaming ecosystem in the West down to the 3 main ones (YT, FB, TW). TWITCH TOTAL HOURS WATCHED SINCE Q2 2018[10] 5.06B 5,000

4,400

3,800

3.11B 3,200

Hours watched in millions watched Hours 2.77B 2.76B 2.79B 2.66B 2.55B 2.45B 2,600 2.27B

2,000 Q2 ‘18 Q3 ‘18 Q4 ‘18 Q1 ‘19 Q2 ‘19 Q3 ‘19 Q4 ‘19 Q1 ‘20 Q2 ‘20 [9] The Verge [10] Esports Charts FNATIC INSIGHTS: ESPORT COVID UPDATE

GROWTH IN LAST 90 DAYS: MARCH 16TH - JUNE 16TH VS. PREVIOUS 90 DAYS

As lockdown began to ease, viewership on Twitch remained strong, helped by the 12 June launch of Sony’s Playstation 5[11]. 4.9B 70.3% ↑ 2.3M 70.3% ↑ 6M 115.6% ↑ HOURS WATCHED AVERAGE VIEWERS PEAK VIEWERS

TOTAL HOURS WATCHED TOTAL HOURS STREAMED

Total hours watched were consistently above 2019 While the number of hours streamed was slightly on a monthly basis. April 2020 was the highest lower in January 2020 and flat in February 2020 spike, with a 101% increase YoY, while February vs 2019, the Month of March 2020 shows a 20% and Jan were respectively above by 5% and 7%[11]. increase YoY and April and May show significant uptick at 83% and 108% YoY respectively[11].

Total Hrs watched ‘19 Total Hrs watched ‘20 Total Hrs streamed ‘19 Total Hrs streamed ‘20

2000M 80M

1500M 60M

1000M 40M

500M 20M

0M 0M

Apr Jul Jul Jan Feb Mar May Jun Aug Oct Nov Dec Jan Feb Apr Jun Aug Oct Sept Mar May Sept Nov Dec

TOTAL NUMBER OF CHANNELS AVERAGE CCV SINCE JAN 2019

While the number of channels was slightly lower in Average concurrent viewership on Twitch increased January and February 2020 vs 2019, the Month of by 19.5% in Q1 2020 vs. past quarter, reaching a new April and May show significant uptick at 72% and all-time high, and even higher record for April 88% YoY respectively[11]. (+101% YoY) and May (+87% YoY)[11].

Active Channels ‘19 Active Channels ‘20

8M 2.5M

6M 2.0M

4M 1.5M

2M 1.0M

0M 0.5M

Jul Jan Feb Mar Apr Jun Aug Oct Dec May Sept Nov Apr ‘19 Jul ‘19 Jan ‘19 Feb ‘19 Mar ‘19 May ‘19 Jun ‘19 Aug ‘19Sept ‘19 Oct ‘19 Nov ‘19Dec ‘19Jan ‘20Feb ‘20Mar ‘20Apr ‘20May ‘20Jun ‘20

[11] Twitch tracker FNATIC INSIGHTS: ESPORT COVID UPDATE

CHINA

Althought there might have been a decline in PC gaming in China during the pandemic due to the internet cafes shutting down, local streaming platforms raked up some solid results over Q1 2020.

HUYA Inc. is the leading game live streaming platform in China. Huya hosts live video game streams and other esports content.

HUYA’s revenues increased by nearly 50% YOY to $340.6M. Average MAUs[12] increased by more than 22% to 151M as fans increased their interest in game-centric content during the lockdown.

HUYA benefits from strong support from Tencent, which became its largest shareholder in April 2020. Tencent’s acquisitive approach to the gaming and esports ecosystem - including full ownership of Riot, near-complete ownership of Supercell, and significant investment in Epic - presages a strong Q2 for HUYA in terms of streaming content[13]. Douyu is HUYA’s main competitor. The subject range of its video content is generally wider than HUYA’s.

Wuhan-based Douyu also saw revenues jump 53% YoY in Q1 2020 to $321M.

However their user base declined slightly during the quarter (down by ~1% to 158.1M), despite Douyu’s average revenue per user (ARPU) increasing by 23.7% YoY[14].

Bilibili is an online entertainment and mobile gaming company, with a wide array of user-generated content in the style of Youtube.

Bilibili’s revenues increased by 69% YoY in Q1 2020 to $327M, especially supported by the growth of revenue from value-added (+172% YoY to $112.2M)

Average monthly active users (MAUs[12]) reached 172.4M, and mobile MAUs reached 156.4M, representing increases of 70% and 77%, respectively, from the same period in 2019[15]. [12] Refers to average monthly active users on Huya platform. Average MAUs for any period is calculated by dividing (i) the sum of active users on our platform for each month during such relevant period, by (ii) the number of months during this period. [13] PR Newswire [14] KrASIA [15] KrASIA, Bili Bili Q1 2020 earnings FNATIC INSIGHTS: ESPORT COVID UPDATE

VALORANT... WOW.

And if Twitch is doing great, it follows that some of the 5m+ content creators who streamed through the platform in March 2020 must have also had some of their most incredible periods yet. The Mick Fannings and Kelly Slaters of the content crunch wave included:

US-based streamer and ex-CS:GO pro Jaryd ‘summit1g’ Lazar, whose channel currently leads in total hours watched on Twitch (49M hours watched in 90 days)[16].

Friend-of-Fnatic Ludwig ‘Anomaly’ Lagerstedt, whose signature balaclava and 24/7 open stream increased his watched hours by 6,700% in 90 days and catapulted him into the second most viewed channel on Twitch (by watch hours)[17].

playvalorant.com, VALORANT characters

TOTAL HOURS WATCHED TRENDING (JANUARY ’20 - JUNE ’20)[18]

300M

200M

League of Legends

Fortnite 100M Call of duty: Modern Warfare Counter-Strike: Global Offensive VALORANT 2

Rainbow 6 Siege

Jan Feb Mar Apr May Jun

[16] SullyGnome, at 14 June 2020 [17] SullyGnome, at 14 June 2020 [18] Twitch, Newzoo reports FNATIC INSIGHTS: ESPORT COVID UPDATE

What did these two wave-riders have in common? They were playing VALORANT, Riot’s long-awaited FPS, which launched (in closed beta) on 7 April 2020... into the most content-starved audience in the history of content. By enlisting well-known Fortnite, CS:GO and Legends streamers to distribute closed beta keys, Riot savvily created immediate competition (which is useful for a game intended to be fun to play and great to watch), hype around their launch through affiliate marketing, and extreme FOMO from the FPS community (who immediately busied themselves with the search for beta keys). As a result, VALORANT’s launch broke Twitch’s all-time concurrent viewership record, and the game continues to lead the platform Fortnite with 20M viewers of its events in overall watch hours.

As can be seen from the table below, long-standing open-world games like Fortnite and Grand Theft: Auto remained popular with Twitch viewers. A busy quarter on the Fortnite island was capped with another meme-ready narrative-driving event, “The Device”. Fornite’s developer Epic continues to challenge conventions of what a game can be, hosting within its ‘metaverse’ (among other things) blockbuster movie premieres and a surreal Travis Scott virtual concert attended by tens of millions of fans. Epic also established areas of its playable universe as violence-free social areas - opening up a “cross- platform Second Life meets Facebook” playground within one of gaming’s most popular battlegrounds.

MOST WATCHED GAMES ON TWITCH, UP TO 16 JUNE 2020

Game Watch time Stream time Peak viewers

518.1M 11.3M 1 VALORANT hours hours 1.7M

467.5M 7M 2 Just Chatting hours hours 839K

390M 10M 3 League of Legends hours hours 727K

304.6M 24.7M 4 Fortnite hours hours 832K

272.9M 16.7M 5 Call of Duty: Modern Warface hours hours 455K FNATIC INSIGHTS: ESPORT COVID UPDATE

04. EFFECTS OF ESPORTS ON TRADITIONAL SPORTS FNATIC INSIGHTS: ESPORT COVID UPDATE

WELCOME TO THE PARTY! (PLEASE WASH YOUR HANDS.)

During the pandemic, all new content is online - ballet, theatre, music and even talk-shows have taken a home-made, self-hosted pivot to digital. Given this wider trend, it’s no surprise that the first port of call for fans and broadcasters of sports like football, basketball and motor racing was to their digital equivalents - living-room staples like EA’s FIFA (which sold 1.5M copies in the UK in 2019, making it the best-selling console game by some distance), Madden and NBA Live franchises, and iRacing.com’s NASCAR series.

Converting previously “offline only” sport fans into consumers of online entertainment content is the first step in bringing those consumers into the esports marketing funnel - albeit plotting conversion of a fan of a ‘diet esports’ / easily understood console game like FIFA into a ‘full fat’ game like League of Legends admittedly involves a lot of steps; and query whether these consumers will stay in the funnel once the IRL content returns.

Twitter, @F1Media account FNATIC INSIGHTS: ESPORT COVID UPDATE

In this regard, it’s interesting that the angle many press outlets have taken in relation to tournaments featuring substitute titles has been to focus not on the FIFA esports professionals participating in online matches (which include the best FIFA player on the planet, Fnatic’s Donovan ‘Tekkz’ Hunt) but instead on the IRL players who have been drafted in to play.

Shout out Norwich City’s Todd Cantwell and Palace’s ANOTHER ILLUSTRATION OF MAINSTREAM Andros Townsend, lauded on for their on- ENTERTAINMENT ENTERING THE STREAM stream bangers! Football fans who made the move ECOSYSTEM, IS THE INCREASE OF THE MUSIC to Twitch during lockdown will soon have even more CATEGORY WITHIN TWITCH. reasons to stay with the platform, following the announcement on 19 July 2020 that four live English Premier League content will appear on the platform as part of Amazon’s broadcast deal.

MUSIC CATEGORY ON TWITCH (BASED ON HOURS WATCHED)[19]

6.15M

3.84M 3.83M 3.34M

2.26M

1.31M 1.40M 1.26M 1.26M 1.19M 1.02M 1.13M 1.15M 1.06M 1.10M

Week 1 Week 2 Week 3 Week 4 Week 1 Week 2 Week 3 Week 4 Week 1 Week 2 Week 3 Week 4 Week 1 Week 2 Week 3

January February March April

The category has always existed on Twitch but it only saw meaningful watch hour growth from the third week of March, when lockdown measures came to effect in most countries. This led to many music actors to shift activity to livestream, through the retransmission of past festivals, DJs/musicians directly addressing their audience, Beatport organising events or some radios switching to live stream.

[19] Twitch tracker FNATIC INSIGHTS: ESPORT COVID UPDATE

ESPORTS: AS SEEN ON TV

As Netflix itself acknowledges, it competes with and loses more to Fortnite than HBO; and while penetration of gaming and online streaming into older age groups remains low, Twitch and its competitors dominate watch hours among the consumers of the future. Almost three-quarters of Twitch viewers are aged 34 or under, with 41% below 24[20].

Not to be outdone by online and OTT platforms, as countries began entering lockdown, several linear and satellite TV broadcasters began signing and scheduling esports leagues.

In March, Norwegian free-to-air television channel TV 2 Norway announced separate broadcasting deals with two CS:GO competitions: the ESL Pro Tour, and BLAST Premier.

In June, ESPN and Riot Games agreed a deal for ESPN to air the League of Legends Championship Series (LCS) Spring Split Playoffs with immediate effect. ESPN had already started to branch back into esports in H1 2020, kicking off with 12-hour block incorporating titles including Rocket League, F1, , NBA 2K and Madden. NBA 2K has also now announced a deal with ESPN2 to air league matches (on cable, via the ESPN app and ESPN.com throughout the season). League of Legends Championships, BBC News

Venerable UK broadcaster the BBC has also joined the party, bringing six weeks of the UK League Championship (UKLC) League of Legends competition to its website and app, starting 14 June 2020. Rumours continue to circulate regarding Activision-Blizzard’s negotiations with NBC Sports in regards to the OWL () retransmission.

[20] Globalwebindex FNATIC INSIGHTS: ESPORT COVID UPDATE

05. KEY TAKEAWAYS FNATIC INSIGHTS: ESPORT COVID UPDATE

THE TLDRS:

Esports has shown resilience to COVID-19 and its adaptability and relative success within entertainment shows it can adapt to overcome serious existential challenges.

Of all the winners from the COVID-19 content crunch, developers, streaming platforms and streamers seem to have fared best.

Esports tournaments viewership has held up and grown significantly, with traditional sports entrance also driving esports viewership.

Fast movers into the esports space can take advantage of a rapidly rising industry at the beginning of a big popularity spike.

Developers made the lions share of revenue gains generated due to the influx of engagement.

Creators, entertainers and IP holders hold more attention now than pre-COVID.

But the bigger picture point is that the esports ecosystem as a whole will benefit fromraised awareness and interest in gaming, particularly in consequence of its implicit legitimisation by traditional media.

There are two questions still unanswered - first: whether, having brought new fans into the esports and streaming funnel, those fans can now be converted into enthusiastic and committed consumers of gaming content; and second, the extent to which marketing budgets and planning will now be recalibrated towards digital assets (and particularly streaming and streamers).

LoL Esports Photos, LEC Spring 2020 Week 1 FNATIC INSIGHTS: ESPORT COVID UPDATE

FNATIC is a global esports performance brand headquartered in , laser-focused on seeking out, levelling up and amplifying gamers and creators.

Our history is unparalleled. Founded in 2004, we are the most successful esports brand of the last decade, winning more than 200 championships across 30 different games.

Today, driven by entertainment, Fnatic is the channel through which the most forward-thinking brands communicate with young people. We deliver industry-leading content, experiences and activations through offices and facilities in cities between and Tokyo.

15 75M 220 Years at the top Global Audience Championships 370+ 11 $15M Medal Wins Different Games Prize money won

And a future even brighter. We are forerunners in competitive mobile gaming, as the first Tier 1 esports team to launch a presence in India. We pioneered the intersection of street culture and esports with merch collaborations, and will continue to lead the industry in relation to quality of pro wear and fan apparel. Our pros and creators will generate more than 100m hours of entertainment content in 2020, showcasing our global partners to an audience of more than 15m fans across our social platforms. In addition, our ‘Fnatic Gear’ consumer products will continue to level up and amplify the gaming performance of users wherever they are sold. FNATIC INSIGHTS: ESPORT COVID UPDATE

Thank you for reading.

Compiled by Chloe Marinier, Sam Mathews and the entire Fnatic team.

All product names, logos, and brands are property of their respective owners. All company, product and service names used in this report are for identification purposes only. Use of these names, logos, and brands does not imply endorsement.

Fnatic welcomes your comments and queries on this report. Please contact us at:

[email protected] [email protected]

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