Daily Fantasy eSports – How Big Is The Market, And Where Is It Heading?
Chris Grove, September 20, 2015
The news that DraftKings is entering the market for daily fantasy eSports has sparked a surge of interest in the fantasy eSports category.Before the news, many were likely unaware that such a category even existed. That’s fair, as DFeS effectively didn’t exist prior to January 2015. But, despite that brief ramp, the product has proven incredibly popular – and potentially lucrative.
I recently published an in-depth analysis of the eSports betting vertical for Eilers Research(executive summary available here) that covered both eSports betting and fantasy eSports. Below are some of the highlights from that report pertaining to daily fantasy eSports.
Daily fantasy eSports: the market today
The product
Daily fantasy eSports (DFeS) is essentially identical to the mainstream DFS product. The competition structure, lobby, promotions, and other core elements are more or less interchangeable.
The difference is that DFS players build rosters from athletes in stick-and-ball sports, while DFeS players build rosters from athletes in eSports like Dota 2 and League of Legends.
The major operators
There are two major players in the DFeS vertical: AlphaDraft and Vulcun. The two sites are effectively the FanDuel and DraftKings of DFeS, controlling virtually the entire market for daily fantasy eSports.
Vulcun appears to hold a measurably larger share of the market than AlphaDraft. A rough but fair estimate at this stage would be a 60-40 split favoring Vulcun.
Both were launched in January 2015. Combined, they have raised roughly $20mm in funding.
Many people mistakenly assume Unikrn is a DFeS site. Unikrn offers a more traditional sportsbook product focused around eSports, and does not currently offer a DFeS variant.
The size of the market
We estimate that in 2015, DFeS sites will collectively take in roughly $20mm in entry fees from just under 600,000 active, unique customers participating in real-money contests.
How it compares to DFS
The entry fee number for DFeS is obviously a fraction of the several billion in entry feesDraftKings and FanDuel are collectively projected to take in during 2015.
But $20mm in annual entry fees would actually be a relatively healthy number for a mid-tier DFS site.
On the user side, DFeS compares far more favorably. I estimate that, industry wide, DFS saw somewhere between 1.5m to 2m active players in 2014, a number likely to end up around 4m in 2015.
Measured against that bar, the user numbers for daily fantasy eSports are impressive – especially when you consider that the daily fantasy sports industry has been driven by nearly a billion dollars in funding.
Where the daily fantasy eSports market is heading
We project a burst of growth for both users and handle in the next two years as organic awareness spreads and increased marketing budgets help drive the product into new spheres:
Following the period, we project steady growth on the user front and a secondary burst on the revenue-per-user front as the DFeS product matures and eSports becomes a more trusted and familiar space for wagering.
Feel free to contact me for more information regarding the research from Eilers.
Can DFS operators make inroads into fantasy eSports?
That’s an open question.
On the one hand, traditional sportsbooks like bet365 and William Hill have successfullylaunched eSports betting and appear to be experiencing steady growth.
Working in favor of traditional operators: superior funding, large existing user bases, mature technology, and deep relationships with major media outlets.
On the other hand, eSports is something of an insular culture, one that may prove a poor fit with the image and approach of DFS sites like FanDuel and DraftKings.
An inability to appreciate that culture – to speak the language, as it were – could moot the other advantages of traditional DFS operators. To wit: Vulcun started life as an eSports team before evolving into the DFeS operator. The resulting wealth of industry connections and cultural capital in an intangible edge that will be difficult for DraftKings to replicate simply through spend alone.
Chris Grove, September 20, 2015
The news that DraftKings is entering the market for daily fantasy eSports has sparked a surge of interest in the fantasy eSports category.Before the news, many were likely unaware that such a category even existed. That’s fair, as DFeS effectively didn’t exist prior to January 2015. But, despite that brief ramp, the product has proven incredibly popular – and potentially lucrative.
I recently published an in-depth analysis of the eSports betting vertical for Eilers Research(executive summary available here) that covered both eSports betting and fantasy eSports. Below are some of the highlights from that report pertaining to daily fantasy eSports.
Daily fantasy eSports: the market today
The product
Daily fantasy eSports (DFeS) is essentially identical to the mainstream DFS product. The competition structure, lobby, promotions, and other core elements are more or less interchangeable.
The difference is that DFS players build rosters from athletes in stick-and-ball sports, while DFeS players build rosters from athletes in eSports like Dota 2 and League of Legends.
The major operators
There are two major players in the DFeS vertical: AlphaDraft and Vulcun. The two sites are effectively the FanDuel and DraftKings of DFeS, controlling virtually the entire market for daily fantasy eSports.
Vulcun appears to hold a measurably larger share of the market than AlphaDraft. A rough but fair estimate at this stage would be a 60-40 split favoring Vulcun.
Both were launched in January 2015. Combined, they have raised roughly $20mm in funding.
Many people mistakenly assume Unikrn is a DFeS site. Unikrn offers a more traditional sportsbook product focused around eSports, and does not currently offer a DFeS variant.
The size of the market
We estimate that in 2015, DFeS sites will collectively take in roughly $20mm in entry fees from just under 600,000 active, unique customers participating in real-money contests.
How it compares to DFS
The entry fee number for DFeS is obviously a fraction of the several billion in entry feesDraftKings and FanDuel are collectively projected to take in during 2015.
But $20mm in annual entry fees would actually be a relatively healthy number for a mid-tier DFS site.
On the user side, DFeS compares far more favorably. I estimate that, industry wide, DFS saw somewhere between 1.5m to 2m active players in 2014, a number likely to end up around 4m in 2015.
Measured against that bar, the user numbers for daily fantasy eSports are impressive – especially when you consider that the daily fantasy sports industry has been driven by nearly a billion dollars in funding.
Where the daily fantasy eSports market is heading
We project a burst of growth for both users and handle in the next two years as organic awareness spreads and increased marketing budgets help drive the product into new spheres:
Following the period, we project steady growth on the user front and a secondary burst on the revenue-per-user front as the DFeS product matures and eSports becomes a more trusted and familiar space for wagering.
Feel free to contact me for more information regarding the research from Eilers.
Can DFS operators make inroads into fantasy eSports?
That’s an open question.
On the one hand, traditional sportsbooks like bet365 and William Hill have successfullylaunched eSports betting and appear to be experiencing steady growth.
Working in favor of traditional operators: superior funding, large existing user bases, mature technology, and deep relationships with major media outlets.
On the other hand, eSports is something of an insular culture, one that may prove a poor fit with the image and approach of DFS sites like FanDuel and DraftKings.
An inability to appreciate that culture – to speak the language, as it were – could moot the other advantages of traditional DFS operators. To wit: Vulcun started life as an eSports team before evolving into the DFeS operator. The resulting wealth of industry connections and cultural capital in an intangible edge that will be difficult for DraftKings to replicate simply through spend alone.
