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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

Full Sail University Anchors Strong Orlando Esports Ecosystem

A vibrant esports economy has emerged in Central Florida, and an industry-leading esports arena at Full Sail is set to boost it even further.

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Photo Credit: Full Sail University

Orlando, Florida is becoming a hub for esports, and much of the credit can go to Full Sail University and its extensive gaming and esports programs.

The city was recently named the second-best city for gamers in the United States, and the Full Sail administration is embracing the culture. Next month, Full Sail will open The Fortress, a $6 million project that will become the largest esports arena on a college campus. All told, The Fortress is 11,200 square feet with a 500-person capacity and the ability to support 100 athletes in play at a time. According to Sari Kitelyn, Full Sail’s director of project development, the fan capacity and the venue’s educational potential are what help distinguish “The Fortress” from existing esports arenas at other schools. 

“It’s a chance for students to learn hands-on, a place for the community connection to the industry,” Kitelyn said. “We were already the home to so many types of esports activities, we wanted to help elevate Central Florida by giving a permanent place to make sure everyone can see and realize it’s the place for esports.”

READ MORE: Blast Pro Series Debuts in U.S. with Fan Focused Esports Tournament

Kitelyn said building Central Florida as a hub of esports activity is a collaborative effort between the school, the city and the variety of companies in the industry that call the region home.

Along with Full Sail, Orlando is also home to the game developer EA Tiburon and a number of startups like GameSim, Gentleman Squid, Werd! Interactive, Steamroller Studios, Phyken Media and ootii. Aside from gaming, there’s also a rich tech hub in Orlando featuring more than 2,000 companies. In particular, that includes a vibrant augmented and virtual reality space, including Advanced Micro Devices and the University of Central Florida’s Institute for Simulation and Training. Full Sail also has a focus on the technology with a $3 million, 8,000-square-foot augmented reality lab.

“[Full Sail is] building an entire ecosystem of esports for students who want to have esports as part of their college lifestyle and experience,” said Jason Siegel, CEO of the Greater Orlando Sports Commission. “This means appealing to top competitive esports athletes, casually competitive esports athletes and esports fans by offering a holistic experience that includes top college esports competition, other external esports events and competitions and esports research and testing.”

When looking at esports, the commission no longer treats the industry as an “emerging category.” Instead, it’s now a key part of the city’s plans in the next decade.

Full Sail’s involvement in the gaming space is not new, having a large gaming development. program for a long time, said Bennett Newsome, Full Sail’s esports strategist.

“Our graduates are blazing the trail in this industry,” Newsome said. “They’ve set the foundations and it’s grown over the years, and we’re proud of what our graduates have gone on to do. It’s something we want to continue to build on and feel like we have our fingers on the plus of what’s next.”

As more game development and esports programs and varsity teams pop up across U.S. universities, Full Sail administration will continue to keep tabs on its student body and alumni to hopefully stay ahead of the curve, Kitelyn said. She hopes Full Sail can be a resource for other schools looking to build programs.

“The community of collegiate esports, in general, is very warm and inviting,” Kitelyn said. “Every school wants to see this grow. We love being able to be a home for anyone within the community and sharing information.”

Newsome credited part of the program’s growth to an open-minded community of administrators. While other schools may need to fight to convince faculty to sign off on new programs, Newsome said that Full Sail has been empowered to push the program forward by an administration that is very up-to-date on the happenings in the gaming world.

“We’re lucky to have executives here who know what’s going on and where the opportunities to invest in are,” Newsome said.

READ MORE: Celsius Makes Esports Inroads With Echo Fox Partnership

With The Fortress set to open, Full Sail plans to court professional leagues and collegiate championships to play in the new arena. It’s a strategy consistent with the wider aims of the city. Siegel believes esports can join four other key categories the city has attracted in the past: major professional sports, NCAA Championships, US Olympic sport competitions and amateur sports.

“There is no reason to believe we can’t have the same success when it comes to attracting esports events and conventions to Orlando,” Siegel said.

With all parties on board, the future of the esports ecosystem in Central Florida is ripe to grow even more.

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Blast Pro Series Debuts in U.S. with Fan Focused Esports Tournament

Blast Pro Series launches its U.S. presence with a Counterstrike tournament in Miami, focusing on attracting casual fans to esports.

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Jordi Roig realizes the strong potential of esports on a global scale.

Roig and fellow RFRSH Entertainment executives come from traditional entertainment options, such as European soccer, handball, rock festivals and operas. In 2016, they started the Blast Pro Series, a Counterstrike esports tournament focused on the fan experience. Now, it’s coming to the U.S. with an event this weekend in Miami.

“We could see esports was definitely a strong, new and upcoming entertainment format,” said Roig, Blast Pro Series executive producer. “Our goal was to do the same thing with esports as we’ve been doing with entertainment.”

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

Rogi said previous esports competitions have largely catered to core esports audiences, those who know the games being played, so Blast Pro Series set out to build an experience meant to attract general fans. The producers looked at a variety of how other sports build a fan experience. He said it was important to also cut the time of traditional Counterstrike competitions, which can run up to 25 hours.

“The original drama, of course, lies in the game, but you need to package a fan experience to make sure the fans are having a good time,” Rogi said. “I’ve traveled to a lot of esports competitions and there’s not a lot of entertainment and fun if you don’t already have a love for the game or are very savvy to what’s going on. We tried to build a format that is entertainment first and foremost and then it’s esports.”

The Blast Pro Series fan experience includes a large A-shaped stage with multiple large screens and surround sound, fan cams, t-shirt guns. Prior to the games, explainer videos are played so casual fans can learn basics of the game. Among the casual fans, Rogi said the series hopes to capture are parents bringing their fanatical children to the tournament.

“If you’re a parent, you might not have the passion the kid has,” he said. “If we present a platform where families can have fun together around what the kid’s passion is, that’s our target group, the families.”

Blast Pro Series announced its international expansion last fall, as the series finished its 2018 season in Lisbon, Portugal and this season has dates in Miami; Sao Paulo, Brazil; and Madrid, Spain. Prior to the expansion, Blast Pro Series tournaments had only been held in Copenhagen, Denmark, and Istanbul, Turkey. The full series is seven regular-season tournaments and a global final.

Roig said Blast Pro Series will also make another stop in the U.S. in Los Angeles in July. Burger King, a new partner of the series, will run an online competition for tickets to the LA competition. In the future, Rogi said Blast Pro Series would like to make two or three North American stops at regular locations, which could include Miami and LA or other cities like Austin, Texas, or San Diego.

“We want a strong foothold like cities in Formula One where we come back every year,” Rogi said. “We’re having a lot of conversations with cities that are very keen want to capture the esports capital of the U.S.”

The U.S. has the largest base of CS:GO players, with more than 5 million players, so there’s plenty of market to capture, Rogi said. He also said while the U.S. has plenty of momentum with esports, there’s plenty of runway to catch up to the world leader’s in esports popularity and production.

READ MORE: How Players Associations Could Help Improve Esports’ Infrastructure

Competition at the first Blast Pro Series event in the U.S. will include teams like Team Liquid and Cloud9 competing for a $250,000 prize pool.

Russel “Twistzz” VanDulken, a member of Team Liquid, has played other tournaments in the U.S. but is excited to make his way over for this weekend’s Blast Pro Series event in Miami, a location he has yet to play. There is an opportunity in U.S. markets for esports that VanDulken said is ripe for success if done correctly. He regularly frequents Europe and Asia in international tournaments, so he’d be excited to come to North America more often.

“Blast kind of puts the spotlight on us more and it should give us a special feeling,” VanDulken said. “North America has a lot to offer in terms of events, fans and locations but the area isn’t utilized properly. Blast is taking a step in the right direction by having an event in Miami.”

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NBA 2K League Eyes Growth in Second Season

With 90 sponsors already, the league is looking at everything from finding ways to elevate the studio and venue experience to delivering more engagement.

Tim Marcin

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Photo Credit: NBA 2K League on Twitter

If you’ve got a passing familiarity with basketball then you can show up at the NBA 2K League’s studio in New York City—or jump into its Twitch livestream—and you’ll get the basics of what’s going on.

In some ways, that might be the biggest asset afforded to the upstart esports league that just kicked-off its second season last weekend. More than one-third of all people in the Americas, Europe, the Middle East and Asia has an interest in basketball, second only to soccer, Nielsen data has shown. That’s a strong wave the NBA’s gaming league knows it can ride.

“I don’t think anyone in esports has the opportunity to engage a casual audience like we do. You walk in [to the studio] and see, like, family members of players or people you wouldn’t consider tradition esports enthusiastswithin two minutes you hear them say ‘Oh, this feels like I’m at a real basketball game,’” said Brendan Donohue, managing director of the NBA 2K League.

He mentioned the NBA’s social reach likely hovers around 1.5 billion fans and followers. “That’s a huge opportunity,” Donohue said.

Each team in the 21-team NBA 2K League is run by an NBA franchise (like the New York Knicks, Philadelphia 76ers or newly added Minnesota Timberwolves) and features gamers who play as avatar versions of themselves—so you won’t see virtual Steph Curry on the virtual court. The live arena features a theatre-in-the-round set-up, fans looking down on the 5-vs-5 that’s also broadcast on massive screens. That same broadcast, featuring announcers and chat hosts, is sent out to thousands of fans online. The gamers physically face one another as they play, which leads to trash talk and yelling matches. It’s a fun watch in-person, which is a point of focus for the joint venture between the NBA and Take-Two Interactive moving into Season 2.

“I want to take our studio/arena experience and elevate it a lot,” Donohue said. “I want to make this a place where people in New York are like, ‘I want to go check that out.’ I think we’ve now got the physical set-up right. And we’re getting closer.”

The league had its kickoff Tip-Off tournament last week, won by 76ers GC for the second straight year. The regular season follows and, over the course of the season, $1.2 million in prize money will be handed out. The gamers are focused on winning that cash. Yet the business strategy for the 2K League is similar to that of a traditional sports leagues. For instance, this year it locked up Champion as the league’s outfitter.

READ MORE: How Players Associations Could Help Improve Esports’ Infrastructure

“It’s sponsorship. It’s media rights. It’s merchandise, which helps a ton that now we have Champion on board,” Donohue said. “[The goal is] just elevating that from Season 1. We’re going to start doing events on the road, also we’ll have ticket sales. You’ve got to remember there’s the league and there’s also the teams. We have 90 sponsors across the league.”

Talking with the players, they treat it much like NBA stars might—they even sound like the NBA pros in interviews. Michael Key—a 27-year-old gamer who goes by Bear Da Beast for Minnesota’s franchise—serves as a brash, vocal leader for his team despite being a rookie. In a recent matchup against Memphis at the 2K League’s Tip-Off Tournament, he was standing and shouting trash talk, even getting a slight reprimand from league officials. But after not getting a spot in the league in Year 1, he seemed set on making his presence known.

“I wasn’t here last year, so I come here this year and everybody says, ‘It’s a stage,’” he said shortly after his debut. “I’m the stage. I don’t get scared of no lights.”

Later, speaking about his goals, he’d add: “I want everything. I want Rookie of the Year, the MVP, the championship, the Sixth Man if I can get it. I want everything.”

Bear is the sort of player who brings energy to the fun live experience—transferring that to the stream is a major objective for the 2K League moving forward. According to the league, last year’s final garnered 645,000 unique viewers and, overall, the league generated some 152 million video views throughout the season. They’re working on getting those fans (and hopefully more) engaged with the broadcast, most notably through the lively chat coinciding with the game.

“The guy on the analyst’s desk, Phil, his whole job is in the chat, engaging in the chat and bringing the chat into the broadcast, which we didn’t do last year,” Donohue said. “Last year it existed almost on the side of the broadcast. It was cool… people were engaged, but now we’re trying to connect it. That’s a big change for Season 2.”

Donohue described potential areas of growth moving forward, including 40 million fans in Asia who’ve downloaded a free version of 2K. The league hasn’t even been able to approach that audience yet. There’s a whole world of basketball fans (and gamers) out there, and the league plans to take some of its tournaments on the road in an effort to court them. Donohue also said he felt esports growth, in general, helps the NBA 2K League. They feel they have the best sports-game offering and that some of the biggest titles out there, like Overwatch and League of Legends, likely boost their viewership on Twitch.

“Esports is growing so fast that we’re nowhere near worried about this being a zero-sum game,” Donohue said. “If anything, when our games are on Twitch sometimes, I think we have people who are watching Overwatch that go on the carousel and see our game and just check us out. I think in many ways we benefit from the success of other leagues.”

Esports is still relatively new and the NBA 2K League is very new. Donohue noted that the biggest shift in the business plan for Year 2 was an investment in data—key information about its fans or how its sponsorships perform—that it could then use with partners moving forward. “We’re investing in things normally the NBA would do in its sleep,” said Donohue, who worked for the NBA for two decades.

READ MORE: Rick Welts Talks NBA Business, Distribution and Mental Health

With such a young product, in a new space that folks are still just trying to figure out, Donohue said the attitude is “keep doing the right things, the revenue will follow.”

“I just think we have so much green space in front of us,” he said.

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