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How Big Is Esports Really? Nielsen Attempts to Figure It Out

Published on .

Credit: Jean Chung/Bloomberg
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Professional video gaming is the next big thing. How big that is, though, is hard to say. Some estimates pegged it as a $493 million industry in 2016, others said it was nearly twice as big. As for the audience, some say it's 85% male, others say it's 56% male. No one really knows.

Nielsen says it's ready to figure it out. The audience-measurement company is introducing a new division, Nielsen Esports, to quantify the rapidly growing industry for teams, sponsors, advertisers and publishers.

"Nielsen knows sports, Nielsen knows games, and we obviously know audience," says Nicole Pike, VP of Nielsen Games, who will co-lead the new division. "To us that's the perfect confluence of expertise to enter esports."

As more traditional sports owners and advertisers invest in esports, Nielsen will focus on sponsorship valuations, investment strategy and audience measurement -- metrics that it can compare across traditional sports. While there's been rapid growth in the industry, "consistent and high-quality data has been a challenge to measure and define," said Craig Levine, chief executive officer of esports event organizer ESL.

For example, as evidence of the growth of esports, many people use data from different sources to claim that the annual championship of Riot Games' "League of Legends" is watched by more viewers than the National Basketball Association finals.

But TV ratings and digital broadcasts are measured in totally different ways, and when Next Level Media broke the numbers apart, it concluded that at least four times as many people watched an NBA Finals game on average as tuned in for "League of Legends" finals.

In addition to its new division, Nielsen has created an advisory board composed of esports' biggest stakeholders -- event managers, broadcasters, publishers and leagues -- to help define the measurement standards. The group includes executives from Amazon's Twitch, Facebook, Twitter, Activision Blizzard and ESL.

Nielsen Esports will be co-led by Pike and Stephen Master, managing director of Nielsen Sports North America. The team will comprise people on Pike's gaming team and Master's sports group and will have access to all of Nielsen's measurement capabilities, including Repucom, which Nielsen acquired last year.

-- Bloomberg News