The esports industry is growing quickly, with new leagues, teams and distribution channels, and this growth is attracting new high-profile esports investment from brands, media organizations and traditional sports rights holders.
Esports can be defined as professional, organized competitive video gaming. Major esports competitions are often held in arenas in front of large in-person audiences, where players or teams compete for money and prizes. Unlike traditional sports, the majority of esports tournaments and events are broadcasted online via live streaming, though television broadcasts do also occur.
In the past year and a half alone, Nielsen Esports has tracked the appearance and value of more than 300 brands in major esports tournaments around the world. And while technology, gaming and consumer electronics brands dominate, more non-traditional esports brands are entering the picture. Automotive, food and beverage, personal care, finance and insurance brands that have been prevalent in traditional sports are investing in esports as well.
But while some brands are generating significant returns on their investments in esports, others have frankly missed the mark. Opportunities in esports are available to many — but not without a clear strategy on how and why to execute, as well as a reliable way to measure esports sponsorship values, audience dynamics and viewership.
Understanding esports' appeal
Earlier this year, Nielsen published the Esports Playbook: Asia to provide a deep dive into the Asian esports fan including what genres they prefer, which brands resonate, how fans are introduced to esports, the most followed titles, how they view traditional sports and the demographics of fans across China, Japan and South Korea.
South Korea, often referred to as the birthplace of esports, is by far the most developed of these three key Asian markets. More than 40% of fans in the country have been following esports for five or more years, with only 10% becoming engaged for the first time within the past year. That following shows no sign of slowing down.
In contrast, the Asian esports market experiencing the newest growth is Japan, where over 80% of followers have only been following the sport for two years or less, with almost 40% following esports within the last year. In comparison, the growth of the esports market in China has been more gradual over the past several years, with most fans following for 2-3 years.
For brands, part of esports’ allure is reaching the valuable millennial male segment. Males comprise 70% of esports fans in Japan, 62% in South Korea and 61% in China. The biggest single age segment across all three markets are 25 to 34 year olds. However, reducing the value of this category to this one demographic doesn’t do it justice. The esports audience is as complex as any established sport, with notable differences across games, genres, markets and more.
While esports is primarily seen as an online-native activity in most parts of the world, in South Korea, events are also commonplace on linear TV. In China, audiences primarily engage online, while in Japan, consumption across mediums is more varied, with fewer engagement points across media types in general.
One hesitation for brands looking to enter the esports market has been the common misconception that esports fans reject sponsorship or brand involvement. Our research shows quite the opposite. The majority of esports fans have a positive or neutral attitude towards brand involvement in esports, with less than 10% feeling outright negative. However, fans do expect brands to show a similar passion for esports and integrate sponsorships in a way that is seamless and additive to fans’ entertainment experience.
Measuring brand exposure
Esports stakeholders have increasingly voiced their desire for more professionalization and unbiased, independent measurement within the industry. While the growth of esports and the potential it holds is no doubt incredible, a realistic understanding of the size of this opportunity is important.
Last year, Nielsen began a syndicated measurement of esports brand exposure called Esport24, using the same sponsorship media valuation approach as in traditional sports. And our research found that, in events tracked through the first half of the year, sponsorship assets and execution within esports events still vary dramatically for any given game or event.
On average, overlays and on-screen graphics had the largest share of voice, followed by apparel, in-venue signage, equipment and in-game logos. Besides sponsorship during events, brands are also increasingly using original content and social activations to connect with fans and engage with an audience hungry for more of what they love.
As brands take the time to learn more about esports in a nuanced way, we expect to see ever more relevant, engaging and ground-breaking activations with impressive returns on investment.
Regan Leggett is executive director of thought leadership and foresight at Nielsen.