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Study Confirms Esports Has Graduated to the Big Leagues

Esports has arrived — mostly because they offer partners and sponsors access to a valuable demographic not nearly as impacted by traditional advertising.

John Collins

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When a reputable consulting firm like Deloitte has its clients clamoring for more information about something, people begin to take notice.

Deloitte recently published a groundbreaking report titled “ESports Graduates to the Big Leagues,” which reveals just how large and rapidly growing the esports industry has become. The paper goes on to outline the various opportunities the burgeoning sector presents to everybody from media and entertainment companies to video game publishers, potential advertisers and professional sports leagues, as well as prospective athletes and franchise owners.  

“Esports is growing exponentially and starting to show up in places it wasn’t traditionally seen,” said Pete Giorgio, who leads Deloitte’s U.S. Sports Practice. “That explosion of the industry has clients consistently asking us more about it.”

Like any good consulting company, that client feedback prompted Giorgio and the Deloitte sports practice to dive in and wrap their hands around this former niche industry. It’s not just Deloitte’s sports partners so interested in understanding and getting involved in the burgeoning space, either.

“Yes, our sports clients want more information, but it’s also the game publishers, organizations building potential leagues, media, entertainment, and advertising companies, and a huge component is potential investors and private equities,” Giorgio stated.

One of the Sports Practice’s main directives is to be an expert that is well-versed in all the opportunities presented by the sports industry in general. “Now, they [our clients] are relying on us to help them think about and better understand the space, potential opportunities, and how they might get involved,” Giorgio said.  

Deloitte’s prospective clients are wise to be so intrigued by the allure of the esports space. The industry can already boast of having a passionate, global, highly engaged audience that’s only expected to grow. As evidence of that enthusiasm and reach, just look at some of the study’s findings.

Released a mere eight months ago, Epic Games’ “Fortnite: Battle Royale” already has 40 million users logging on to play each month. The game has also become the most-watched title on Twitch, which is no small feat, considering that means an average of 140,000 viewers at any given time. Popular title “League of Legends” has been posting similarly remarkable numbers. During one week alone, LoL reported having an audience that spent a total of 17.7 million hours watching league matches on Twitch.

Most astoundingly, those numbers and time spent viewing and participating are only expected to grow, according to Deloitte. In its report, the consulting firm forecasts an estimated audience of 600 million globally by 2020, with the esports industry generating approximately $1.5 billion annually from sponsorships and advertising.

What makes this robust, rapidly emerging esports industry especially complicated and intriguing is that “it’s still very much a ‘Wild West’ system without any established norms and patterns,” Giorgio stated. The structure of teams and leagues, formation of partnerships, and ‘best practices’ for those interested in the business are all still being created.

While it may be a bit confusing for now, the esports space is worth understanding. The demographics and habits of the audience in that ‘Wild West’ present a tremendous opportunity for media and entertainment companies, as well as potential partners.

“The esports audience is interesting, in that it shares many of the similar characteristics as a traditional sports audience: passion, fervor, and everything else you might see from fans of MLB or the NFL. Except the esports demo skews far younger, and reaches an entirely different ‘persona,’” Giorgio said.

Esports offers partners and sponsors access to an extremely valuable — and otherwise difficult-to-reach — millennial demographic not nearly as impacted by traditional television and advertising. You can be sure the fans are active consumers of what they are playing and watching. It’s not just background noise, with any marketing messages lost in the ether.

In addition, what’s especially powerful is the access to data and ability to execute highly targeted, tailored campaigns over a platform like Twitch to the esports fanbase. “What’s really interesting about these {esports} on Twitch is that unlike with ESPN or FOX, you know exactly who is watching,” Giorgio said. “The esports space offers access to a plethora of data on a much more granular level.”

And if Facebook has taught us anything, it’s that data equals money.

It’s these highly targeted, addressable, engaging campaigns that are going to be the future of sponsorships, advertising, and marketing. The esports industry offers a built-in trove of resources for those ambitious enough to take advantage of, just by its very nature of being digital. Perhaps when discussing the esports industry, we should start to think of the E as expansive.

A Communication major from the University of Southern California, with eclectic experience in the sports, business, and the entertainment industry, John Collins is the baseball writer at Front Office Sports. An avid sports fan and highly opinionated writer, John is of the firm belief that Bull Durham is far superior to Field of Dreams and looks forward to you telling him otherwise. Reach out: John@frntofficesport.com any time!

Esports

New Sponsorship Maintains Trend of Quality Over Quantity for Riot Games

For Riot Games, the sponsorship strategy isn’t about stacking up sponsorship partners, but rather finding companies with aligned philosophical values.

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Photo via LOL Esports

A recent partnership between League of Legends Esports and Dell Alienware launches the new year for Riot Games with another quality sponsor.

For Riot Games, the sponsorship strategy isn’t about stacking up sponsorship partners, but rather finding companies with aligned philosophical values, said Naz Aletaha, head of esports partnerships at Riot Games. Aletaha oversees League of Legends global sponsorships, strategic partnerships, business development, and media rights.

Along with Dell Alienware, Aletaha mentioned the Mastercard sponsorship launched at the League of Legends World Championship last year as the two prime examples of quality over quantity.

“Ultimately, we focus on finding partners who can do right by our fans and our sport — partners who share our fan-first philosophy and who want to stand side-by-side with us for the long term to deliver meaningful and authentic experiences to the entire ecosystem,” Aletaha said.

READ MORE: Inside Riot Games’ Partnership with Mastercard and What It Means for the Future of the Publisher

“Both are world-class brands who prioritize their customers and celebrate their passions. They both recognize by combining our efforts, we can take League of Legends Esports — which has scaled to a global, premier sport — to new heights.”

The multi-year partnership with Dell Alienware makes the computer manufacturer the “Official Competition PC and display partner” for the two leagues: League of Legends Championship Series and League of Legends European Championship. The partnership gives Dell Alienware the same title for four other international competitions, including the League of Legends World Championship.

The World Championship had 99.8 million unique viewers for the World Finals, showcasing the potential brand value with the esports league.

The deal will bring League of Legends a fleet of hundreds of Alienware Aurora R8 desktop computers with cutting-edge gaming monitors. Along with the computers will be Dell’s SupportAssist diagnostic, helping detect and prevent technical issues before they impact a match.

The computers will be deployed across the globe and “establishes a consistently high-performance standard, much like traditional sports have done in the past across a range of equipment such as game balls, bats, sticks and pucks,” Aletaha said.

“We are thrilled to be able to tap into Alienware and Dell’s unmatched expertise in hardware and technology services to set the gold standard for the official equipment that will power our sport,” she said.

Mastercard has a long history of sponsoring traditional sports, like Major League Baseball, PGA Tour, Rugby World Cup, and UEFA Champions League, among others.

“Esports is a phenomenon that continues to grow in popularity, with fans that can rival those at any major sporting event in their enthusiasm and energy,” Mastercard Chief Marketing and Communications Officer Raja Rajamannar said at the time of the 2018 Mastercard announcement. “Our Priceless platform is built around connecting with people through their passions.”

Like Mastercard, Dell Alienware will also work with Riot Games for onsite fan activations at all the major League of Legends Esports events to help further the fan attraction of the events.

Along with Alienware and Mastercard, Riot Games is bringing a similar approach to sponsors at a regional level across the globe. In the U.S., the regional sponsorship is State Farm.

Riot Games also has partnerships with Kia in Europe, Mercedes-Benz, and KFC in China, and Gillette in Brazil. The major brands have recognized the growth and significance of esports across the globe and are buying into the industry and its potential opportunities.

READ MORE: Looking Into the Crystal Ball: 3 Esports Predictions for 2019

“The growth of the business of esports overall is incredibly exciting,” Aletaha said. “We’re very encouraged by the meaningful commitment that such respected and recognized brands are making in the space.”

Aletaha said the partnership has roots dating back to CES 2018, when she met key decision makers from the company for the first time. She said major industry conventions are invaluable to her job.

“We very quickly realized as that first meeting that we are both relentlessly committed to elevating the gaming experience for our audience and to the continued technological innovation and overall growth of esports.

“We knew right then and there that partnership was a no-brainer.”

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Looking Into the Crystal Ball: 3 Esports Predictions for 2019

We figured out what fans and gamers can expect from the world of competitive video games in 2019 with the help of a few industry professionals.

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In 2018, fans worldwide watched 6.6 billion hours of esports. With the ability to stream competitions becoming easier to access, the rise of newer games like “Fortnite,” and more fans coming on board, that number will most likely rise once again.

With the new year upon us, we took a look at what else fans and gamers can expect from the world of competitive video games in 2019 with the help of a few industry professionals.

Player welfare will take on more importance

In the past decade or so, the world of esports developed some habits that would probably be considered unhealthy. Players would all live and train together in a single facility. Not many resources were made available to players in terms of mental or physical wellness. Esports organizations also rarely made it a point to help players transition into a different career once their playing days were over.

Now, large organizations like Gen.G are changing the conversation.

At its newest facility in Seoul, Gen.G offers players access to resources like a nutritionist, a psychologist, a full gym, and streaming resources once players are done playing competitively. Players also work in this facility while commuting from their homes around the city in an effort to avoid mental burnout.

READ MORE: Gen.G Is Leading the Highly Competitive Esports Arms Race

In a recent interview, Gen.G Chief Growth Officer Arnold Hur spoke to the importance of his company dedicating resources to improve player welfare.

“I really don’t understand it when I see other organizations that aren’t as focused on player welfare,” Hur said. “It’s our top priority to make sure that a player can be more successful with us than with any other organization. In any sport, your number-one cost is going to be your talent, your players. Making sure that they’re able to perform at their best should be your biggest investment. Since they are our most important investment, we’re going to give it our best shot, so that our athletes can be the best that they can be.”

More non-endemic brands will come on as sponsors and investors

Brands like Alienware and Razer are deeply embedded in the sponsorship space of esports due to their long-established credibility with gamers.

Thanks to esports continuing to dominate the attention spans of the highly coveted 18-35 demographic worldwide, brands that offer products or services that aren’t specifically tied to gaming will likely be moving into esports at a quickened pace. Nike, for example, signed Chinese League of Legends player Jian Zihao to an endorser contract early in the year.

Based on this and other similar deals, fans can especially expect this in esports leagues adjacent to traditional sports like the NBA 2K League.

“We’ve seen a number of large, non-endemic brands and investors come into the space over the past few years, but most recently in 2018,” said Grant Paranjape, director of esports business and team operations for Monumental Sports & Entertainment. “For those who have entered with a thoughtful approach and an ability to integrate endemic esports knowledge into their organizations, I think they’ve been well rewarded by the reception from a very difficult to reach audience. During 2019, I would expect more brands to investigate the space, learn from the mistakes and successes of others, and bring a level of investment into the industry that further professionalizes every aspect, from organizations to individual teams and players.”

READ MORE: Study Confirms Esports Has Graduated to the Big Leagues

Chris “Chopper” Hopper, Riot’s North American head of esports, echoed this sentiment.

“There was a lot of discussion in 2018 with non-endemic brands in terms of sponsorship. That will turn into more closures in 2019. There’s a lot of value here in esports, and brands are aware of that,” Hopper said.

Riot has names like State Farm Insurance and Mastercard sponsoring its major competitions. Expect more larger brands to follow suit in the new year.

Esports will gain more traction in traditional athletic competitions

The 2019 Southeast Asian Games will take place from November 30 to December 11 this year. For the first time in its history, esports will be a part of the competition alongside 55 other athletic events. Games included are “Dota 2,” “Starcraft II,” “Tekken 7,” “Arena of Valor,” “Mobile Legends: Bang Bang,” and one yet to be announced.

The Southeast Asia Games are sanctioned by the International Olympic Committee (IOC). This competition will mark the first time that esports is a medaled event in a competition sanctioned by the IOC.

Does this mean that we will see video games make their debut in the next Olympics? Not necessarily, but the IOC is opening the door here for other regional athletic competition to include video games in the program, which means the process is underway for esports to be an Olympic competition at some point in the next few years.

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Gen.G Is Leading the Highly Competitive Esports Arms Race

Gen.G, which is opening eyes around the industry, owns and fields teams across the world’s biggest competitions in the most recognizable gaming franchises.

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Fans of traditional sports will be familiar with the concepts of facility wars. This is where a college or pro team will invest in the best-of-the-best facilities and equipment in order to attract the top talent, as well as keep that talent performing at their best.

Thanks to some big recent developments, this movement may be spreading across esports. One of the organizations leading the way for this is Gen.G — a global organization with offices and facilities in Seoul, Los Angeles, San Francisco, and Shanghai.

For those unfamiliar, Gen.G owns and fields teams across many of the world’s biggest competitions in the most recognizable gaming franchises — including “Overwatch,” “Overwatch Contenders,” “League of Legends,” “Fortnite,” “PlayerUnknown’s Battlegrounds,” “Heroes of the Storm” and “Clash Royale.”

While Gen.G has a presence in several cities, eyes around the industry for the last month have been focused on its operations in Seoul, South Korea. Gen.G recently unveiled a new seven-floor facility in the Gangnam area of the city that is one of the most impressive ever seen in the space.

Within the new facility, players have access to a training room, a lounge, a gym, a sports psychologist, a streaming room and more. In contrast to what has become the usual esports setup where players live and train in the same building, Gen.G players in Seoul live off-site and commute to this facility. This is done in an effort to allow players time to mentally recuperate in between training sessions. As Gen.G Chief Growth Officer Arnold Hur can attest, player welfare is a top priority for the organization.

READ MORE: Study Confirms Esports Has Graduated to the Big Leagues

“I really don’t understand it when I see other organizations that aren’t as focused on player welfare,” Hur said. “It’s our top priority to make sure that a player can be more successful with us than with any other organization. In any sport, your number-one cost is going to be your talent, your players. Making sure that they’re able to perform at their best should be your biggest investment.

“For us, we feel like we’ve done things that, I think, are pretty innovative and ahead of the curve — whether it’s providing streamer opportunities, providing physical training and a nutritionist, or a sports psychologist on staff, we want them to be the best player they can be.”

Another aspect of Gen.G’s growth can be attributed to its partnerships strategy. Now working with brands like SIDIZ and Razer to give their teams the best equipment, the organization takes the quality over quantity approach with sponsorships and partnerships.

This makes it easier both in terms of activating in meaningful ways and in terms of the players getting acquainted with companies, which, in turn, helps with meaningful relationship building.

“Generally, in the esports market, you have a lot of teams out there that try to fill up as many patches on their jerseys as possible,” Hur stated. “We have to take a bit of a different approach. We try to grab some key partners that really believe in esports that are strategic for us and that we know we do a great job for them in terms of activations.”

With SIDIZ specifically, Gen.G found the partnership attractive because of SIDIZ’s desire to grow with the company on top of the quality of its product.

“We’re great at bringing non-endemic brands into the space. And for SIDIZ, what’s really exciting is that they’re going to make their move into gaming and esports, and we’re going to be a partner that helps them right from the beginning. They want a partner to grow with them. And I think that’s what was really meaningful for us.”

READ MORE: Inside the NFL’s New Partnership With ‘Fortnite’

“The importance of the player’s chair in esports is significantly underestimated from a health and comfort perspective because they spend so much time sitting down. As one of the most advanced chair brands, SIDIZ is the right partner for us,” added Edward Choi, head of marketing, Gen.G Esports. “Together with SIDIZ, we are aiming to supply our teams with the ergonomically designed chairs and create diverse marketing content that promotes both Gen.G and SIDIZ to consumers and gamers alike.”

With another new facility in Los Angeles set to open soon, Gen.G is setting the pace for esports to grow at an even faster rate. Look for more organizations to follow suit soon if they are hoping to compete.

“I think less about ‘are we behind, or are we ahead?’ — and more about moving faster, growing faster, and doing better. In the startup world and entrepreneurship, every single big company will look at a startup’s innovation and think, ‘we’ve got to go copy that.’ They’re better off just focusing on ways that they can make gradual improvements. With the L.A. facility, we’re definitely going to improve on what we’ve seen in the Korea facility side. We take all of these things and continuously and constantly improve on them.”

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