The German esports market: Let’s Play! 2022
Diverse esports landscape with great industry importance
Germany a very diverse and mature esports market by European standards. Based on its considerable size and the number of prominent esports stakeholders located in Germany, it assumes an important role in the European esports sector. However, with a regular reach of 8% of the population Germany still lags behind other European esports markets such as Poland and Spain.
Home to leading players in esports
Distinct esports sub-ecosystems have been established in Germany, most notably through titles such as "Counter Strike: Global Offensive", "League of Legends", "Dota 2" and "FIFA". In these titles, pyramidal competitive structures have evolved, from grassroots or open tournaments through semi-professional leagues to top-tier competitions at 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. In early 2022, ESL and FACEIT, a leading digital destination for competitive gamers, merged under the new name ESL FACEIT Group, joining forces to shape the future of competitive gaming.
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 studio in Berlin. In addition, the "Virtual Bundesliga" of the "FIFA" football simulation game attracts numerous professional football clubs to its German championships.
Germany has attracted various top teams, due to the many top-tier competitions and events held there. Furthermore, there is a lot of enthusiasm among stakeholders from adjacent segments of the ecosystem to get involved in this market. 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 for stakeholders across the gaming and esports sector in Germany. This organization aims at developing the gaming and esports market further and contributes to the evolution of the gaming culture in the country by assuming a role as expert partner for policymakers and players from the media, society, and industry. Hosting the annual "gamescom" in Cologne, the world's biggest computer and video games event, “game” brings together stakeholders from all areas of the esports and gaming landscape.
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 20% 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 of merchandising and event tickets.
And yet, the German target group has significant potential from a monetization perspective. 81% of the German esports audience is employed, many with a high monthly household income (€3,782 on average compared to an average of €3,142 in the overall sample). Notably, the regular consumers include a large share of young digital natives (76% are 40 years or younger).
Pandemic conditions trigger an ongoing transformation
Like nearly all industries and countries, the esports market in Germany has been profoundly affected by the COVID-19 pandemic. Esports gained reach and popularity during 2020 and 2021, with 52% of the German audience having watched esports for the first time in this period. Additionally, 35% of those that had at least some pre-pandemic exposure to esports increased their consumption during the pandemic. While overall reach hit a plateau, regular engagement decreased as the pandemic-related restrictions were lifted. Still, the level of viewer numbers and engagement is in total higher compared to pre-pandemic level.
Converting a broad audience into regular viewers and gamers remains the major challenge to sustained economic growth. However, even the positive developments in 2020 and 2021 did not result in overall revenue growth. 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 environment, but most were only able to break even at best. 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 growth in terms of reach and viewing numbers and gamers into revenue numbers. With the aim, 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 7th edition of the Deloitte study 'Let's Play! - The European esports market' focuses on the development of the European esports sector. The study is based on extensive consumer research across 11 European countries and interviews with 53 market experts, outlining the current state of the esports sector across Europe.
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 for those interested in joining the ecosystem – 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.