The German esports market: Let’s Play! 2021
Diverse esports landscape of outstanding importance
The esports landscape in Germany is a very diverse, mature market by European standards. With a penetration rate of 33% in terms of exposure to esports and 16% in terms of regular consumers of esports within the German population aged 16 to 65, Germany lags behind European esports strongholds such as Poland, Spain or Italy. However, given its size and the prominent esports stakeholders located here, Germany plays an important role in the European esports sector.
Home to leading players in esports
Distinct esports sub-ecosystems have been established in Germany, most notably with the titles "Counter Strike: Global Offensive", "League of Legends", "Dota 2" and "FIFA". In these titles, pyramidal competitive structures have been established, from grassroots or open tournaments through semi-professional leagues to top-tier competitions at the national or international level.
Numerous pivotal stakeholders in the esports sector either have their headquarters in Germany or run key operations in the country. For example, the Electronic Sports League (ESL), one of the largest esports providers and production companies worldwide, is headquartered in Germany, hosting a series of major events at locations across the country over the past decade.
The regular season matches of the European "League of Legends" Championship (LEC) – one of the most important esports leagues in the world – take place in a Berlin-based studio. In addition, the "Virtual Bundesliga" of the "FIFA" football simulation attracts numerous professional football clubs to its German championships.
With so many top-tier competitions and events held here, Germany has attracted various top teams. Furthermore, there is a lot of attention among stakeholders from adjacent segments of the ecosystem. For example, multiple TV channels broadcast esports competitions, and several of the largest German companies are shareholders or top sponsors of different esports organizations.
Complementary to the business-oriented part of the sector, the industry association "game" has become a central point of contact in Germany for the gaming and esports sector. It aims to further develop the gaming and esports market as well as the gaming culture in the country as an expert partner for policymakers, the media, society and industry. Stakeholders from all areas of the esports and gaming ecosystem are members of game and, as the co-organizer of the annual "gamescom" in Cologne, it hosts the world's biggest computer and video games event.
Regular consumers are young and well-educated
Despite the comparatively well-developed esports structures in Germany, the revenue potential from end customers has been limited to date. Only 13% of Germans say they have spent money on esports-related products or services, although the rate among regular consumers is clearly higher. This is mainly due to an abundant supply of free content, which makes it difficult to convert media content into cash and limits the direct B2C revenue streams to merchandising and event tickets.
And yet, the German target group is quite interesting from a monetization perspective. Most of the esports audience in Germany is employed across all age groups (81%) and earns a high monthly income (€2,433 on average compared to an average of €2,117 in the overall sample). Among the regular consumers in particular, we find young (76% are 40 years or younger) digital natives, which are increasingly rare on traditional channels.
Pandemic conditions trigger ongoing transformation within the esports space
Like almost all industries and countries, the COVID-19 pandemic had a profound impact on the esports market in Germany in 2020. Esports gained reach and awareness during this period, with 52% of the German audience watching esports for the first time in 2020 or 2021. Additionally, 35% of those that had at least some pre-pandemic exposure to esports increased their consumption during the pandemic.
This did not result in overall revenue growth, however. Events and the associated ticket and merchandising revenues almost disappeared, while consumption was limited to digital channels (where growth was strong). Many market players managed to adapt quickly to the new dynamic, but most were at best able to break even. We only saw esports enterprises grow their revenues in exceptional cases.
The sector’s key challenge for the future is to retain and convert the fans and users that were attracted during the pandemic, so that esports can be turned into a mainstream product on the German market in terms of reach and economic power.
The European esports market
The 6th edition of the Deloitte study 'Let's Play! - The European esports market' focuses on the economically sustainable development of the European esports sector. The study was based on extensive consumer research and numerous expert opinions. In addition, there are 13 country profiles that outline the current state of the esports sector in different European markets
To download the full report, click here. For the individual country profiles, navigate via the map of Europe.
Deloitte services and contacts
The Sports Business Group at Deloitte is your go-to partner for the esports industry and players interested in joining the ecosystem at any stage of the esports venture – from building market knowledge to advising on complex matters, with a particular focus on commercial and financial issues.
With over 20 years of experience in the national and international sports, fitness and esports industry, you can rely on Deloitte’s vast global network of experts. We offer expertise in auditing, tax and legal, financial and risk advisory, as well as consulting services backed by the industry expertise of the Sports Business Group. This multidisciplinary approach combined with digital competence in all areas enables us to tailor our work specifically to the needs of our clients.