Michael Wolf: E-Sports May Disrupt Sports Viewing – WSJ – Wall Street Journal

Competitive videogaming, or e-sports, is becoming a significant new category of entertainment with the potential to even disrupt traditional sports viewership, strategist Michael Wolf predicts.

By 2020, e-sports will make up roughly 10% of U.S. sports viewing, according to a presentation prepared by Mr. Wolf’s consulting firm Activate Inc. for WSJDLive, The Wall Street Journal’s global tech conference. E-sports will reach 88 million fans in the U.S. and 495 million world-wide, exceeding baseball, basketball or hockey, the firm estimates.

Videogame tournaments held in arenas across the globe now regularly attract thousands of spectators who cheer for teams with matching jerseys and high-tech gear. Hundreds of millions more catch the action online at sites such as Twitch—purchased by Amazon.com Inc. in 2014—and Facebook Inc.,
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as well as on cable networks including Time Warner Inc.
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’s TBS and Walt Disney Co.
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’s ESPN.

Competitive videogaming is already chipping away at viewership of traditional sports. About 76% of e-sports fans are spending less time watching athletic competitions because they are instead tuning into videogame competitions, according to an October report from research firm Newzoo BV.

The phenomenon is garnering interest from major advertisers such as Anheuser-Busch InBev
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NV, Berkshire Hathaway Inc.
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’s Geico unit and Arby’s Restaurant Group Inc. Some are crafting marketing campaigns aimed at e-sports fans, while others are sponsoring teams, players and events.

Meanwhile, investors are looking ahead by putting their money behind the makers of popular e-sports games and teams. For example, Chinese internet giant Tencent Holdings  Inc.
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in 2015 bought the remaining stake it didn’t already own in Riot Games, creator of the popular e-sports game “League of Legends.” In September, the National Basketball Association’s Philadelphia 76ers became the first organization among the four major U.S. sports leagues to invest in e-sports teams.

Global e-sports revenue from sponsorships, advertising, prize pools, ticket sales and more is on track to reach $5 billion by 2020, according to Activate. Should that happen, competitive videogaming would secure a seat at the same digital media table as streaming video, streaming music, e-books and digital newspapers, the firm said.

Write to Sarah E. Needleman at sarah.needleman@wsj.com