In contrast to many assumptions, Deloitte’s new esports report highlights that it is not the youngest of the two generations that is most represented in esports. In Luxembourg, an increasing number of non-endemic partners are entering the esports market.
Photo: Vincent Gouverneur, Head of the Deloitte Luxembourg Sports Consulting team / Image credits: Deloitte
While over the past year, Luxembourg’s esports ecosystem has experienced steady growth and attracted a variety of stakeholders, the sector still offers room for improvement. “We believe that the esports market in Luxembourg is still untapped,” says Vincent Gouverneur, Head of the Deloitte Luxembourg Sports Consulting team, which recently released a high-level market analysis of Luxembourg’s esports market, as part of Deloitte’s new European-wide report ‘Let’s Play! 2021 – The European esports market’.
The consulting firm’s report mainly focuses on the economically sustainable development of the European esports sector and includes an analysis of the preferred channels and streaming services in use, age distribution and market penetration.
Esports consumers might be older than you think
“The report’s biggest surprise is that most esports consumers are not Generation Z aged 16 to 25, but Millennials aged 26 to 45. This means most companies have employees that are also esports consumers,” says Vincent Gouverneur.
In fact, Millennials make up almost half of the hardcore esports consumers (48%), while Generation Z accounts for slightly more than a quarter (27%). Hardcore esports consumers are defined as esports consumers who watched esports content each day or nearly once per day in 2020 or 2021.
“Most companies have employees who are esports consumers themselves.”
More to esports than just sports simulations
While sports simulations hold the highest consumption intensity (40%) among esports consumers, other genre such as shooter (38%) or multiplayer online battle arena (29%) also display intensive consumption.
The report also ranks the ten biggest esports titles by reach. Unsurprisingly, FIFA ranks at number one. However, it is the only sports simulation in the top ten with F1 (6th). League of Legends (2nd), Fortnite (4th), Counter-Strike: Global Offensive (7th), and Rocket League (9th) are all non-simulations games that are categorized as having a high upside potential.
The challenge of audience monetisation
Effective and sustainable monetisation is one of the challenges of the esports ecosystem. Income diversification in the esports industry offers room for improvement, as revenues are mainly derived from sponsorships while audiences remain under-monetised.
Therefore, despite the limited number of seats in a venue, live events carry a particular importance in the esports ecosystem, explains the report. In fact, on-site attendance mainly comprises willing-to-pay spectators, around half of which are very likely or certain that they will attend a live event again.
An appealing product in need of recognition
“Esports are an appealing, high-quality product gaining support from non-endemic partners who could leave a strong mark through their commitment” concludes the report.
“Some companies in Luxembourg are neglecting the esports industry because they are unaware of its potential,” says Vincent Gouverneur. Yet, despite the growing number of non-endemic partners entering the market, esports are still not officially recognized as a sport, as deplored by the Luxembourg Esports Federation.
Not to mention, the untapped potential of Luxembourg esports market can also be explained by a relative lack of presence of esports in the local culture. Other European countries such as the Nordics or the UK, where esports is for example promoted by prominent leaders such as high-profile athletes, are much more advanced in terms of esports, explains Vincent Gouverneur.
It remains to be seen if the rise in the number of Luxembourg companies recognizing Millennials’ interest in esports continues.