Only recently have we witnessed a surge of interest in esports from brands, broadcasters and publications alike, and there’s one simple reason—the numbers are now just too big to be ignored.
Where there is money, interest always follows, so it’s not surprising many articles have focused on the industry’s impressive audience and revenue numbers—380 million fans in 2018, producing a 14 percent YoY audience growth, and US$900 million annual revenue, with US$1.5 billion expected by 2020.
But beyond the numbers, what’s more beneficial for marketing practitioners to understand is the audience behaviour, the range of stakeholders within the industry, and the complex drivers of this burgeoning phenomenon. In this series by TBWA, in partnership with Riot Games, we’ll be exploring distinct elements of the esports ecosystem, to help brands better navigate the different industry stakeholders.
Breaking the stigma
For marketers who have been hesitant to enter the esports arena, the first thing to realise is that the demographic of gaming fans is very different to the commonly perceived anti-social teenage boy playing mindless video games in his bedroom. They are in fact a highly dynamic, digital and diverse audience.
To understand this, we only need to look at how the industry developed in the first place—connectivity. Technological advancements in computers and broadband—the necessities of online gaming—have allowed esports to grow at such a rate. This has meant many of those involved are inherently digital and tech savvy with the ability to intuitively master new games, software and applications, whilst also versed in unique social and streaming platforms.
This can explain why tech, software and ISP brands were amongst the first to get involved, with the likes of Intel, Samsung, and T-Mobile all now prominent in the world of esports. Multinational software company SAP recently partnered with one of the most successful teams, Team Liquid, stating that part of the reason for its investment was to attract innovative talent from the hi-tech esports audience, even labelling them as the IT decision makers of tomorrow.
Likewise, the U.S. Air Force has partnered with American esports team, Cloud9, as jersey and content sponsor, undoubtedly to tap into the young, quick-thinking, and precision-skilled gamers in esports.
Although digitally savvy natives comprise the early esports fans, the audience continues to expand and diversify into a broader slice of the millennial generation. One contributing factor is the explosive growth of mobile gaming, which for many is a gateway to the larger gaming community and the esports world. Over 2.1 billion people globally now play mobile games (63 percent of which are women), cementing it as a common everyday pastime, and as these gamers filter into the esports community, we’re seeing an increasingly diverse audience with their own individual genres and game preferences. In the coming years, esports will certainly move from being the world’s largest niche to becoming the newest part of the mainstream.
High connectivity has not only bred computer savviness, but also created a unique culture that in many ways traditional sport is still catching up to.
Esports is a digitally native cultural phenomenon. The entrance costs are incredibly low, and fans flock to homegrown stars. Today’s esports celebrities got there on their own, without support from large organisations or media outlets. This authenticity and democratised access to the larger gaming community has allowed esports and its athletes to grow faster. At the recent International Olympic Commitiee, Nicolo Laurent, CEO at Riot Games stated that “Esports is the fastest growing sport of the last ten years.”
With the absence of an official sports association such as FIFA or NBA, eyeballs were up for grabs to anyone with something worthy to offer the ravenous esports fanbase. This quickly evolved into a hyper-connected industry in which a diverse range of fans have access to real-time content 24/7, sprouting different genres and games, along with cultural extras such as cosplay and shout-casting. Chris Tran, regional manager, Southeast Asia Markets at Riot Games said, “Through esports, any hardworking talented player has the opportunity to create their own content, build their own personal brands and pursue their own destiny without the support of a major organisation.”
But what’s truly unique about esports compared to its traditional counterparts is the unprecedented access to industry superstars. In every sport, stories off the field are just as important as the competition on the field. Getting to know the individual players provides added depth, drama and connection at a human level.
In esports, players don't just stream their games, they often interact directly with fans through video-chat running alongside the gaming footage. It’s also common for teammates to live under the same roof, allowing them to practice and share content around the clock, creating entertaining videos that provide a look into players' lives—many of which are not even related to esports. “Each piece of content a player creates is an opportunity to connect with a new fan. The internet allows upcoming stars to create scalable relationships at an unprecedented rate. Fans appreciate the personal stories of their favorite athletes—their personal struggles, their unique idiosyncracies and sometimes even their romantic entanglements,” added Tran.
Optic Gaming has been leading this space and was the first to turn its players into celebrity streamers, which helped revolutionise the industry business model. The organisation, which includes over ten employees dedicated to creating high-quality video, has now partnered with brands such as PepsiCo to create premium branded content series. It provides a unique opportunity for marketers to collaborate and own a share of this new level of emotional connection and dedicated following.
The majority of this content is shared through live-streaming platforms, with the most popular being Amazon-owned Twitch.tv. It averages nearly one million viewers at any given time—more than Netflix and HBO combined.
Twitch offers various bespoke monetisation models for different content categories—including multimillion dollar broadcasting rights for tournaments, audience donations for streamers, as well as revenue share of paid channel subscriptions. The streamer can also control when to interrupt their content to ask viewers to watch an ad-break, explaining that it will help support their career. This adds to the refreshingly honest and authentic relationship with fans.
Authenticity is by far the most important consideration for marketers when engaging this audience. Even though esports teams are eager for brand sponsorship (as it makes up the majority of their revenue), their millennial fans are far less receptive to advertising and are keen to ensure brands don’t cloud their esports experience. They often shield themselves from traditional advertising, and are amongst the most likely to use ad blockers.
Therefore, marketers need to spend time truly understanding the audience as well as their brand’s authority within the gaming ecosystem in order to figure out what value they can bring to the industry.
Authenticity, creativity, and altruism, matched with a genuine interest in esports, will define a brand’s role within this rising phenomenon.
Look out for the next article in the Exploring esports series by TBWA, in partnership with Riot Games. Chapter two will provide insights into the deeper workings of players and teams, and the opportunities for brands in this space.
Chris Tran is regional manager, Southeast Asia Markets at Riot Games
Tuomas Peltoniemi is president, Asia digital & innovation at TBWA\Digital Arts Network