- From Small Venues To Sold Out Arenas, Esports Marches On - January 30, 2020
Are you letting a $200 million opportunity pass you by? Is there a $1.5 billion business you’re ignoring? If so, then it’s time to think again about eSports. 20 years ago, it was common to see video games as an expensive waste of time. The idea of people sitting for hours watching others play might have seemed laughable. Yet now the world’s biggest games have a quarter of a billion active players, while a global community of millions will spend hundreds of millions of hours a year watching the world’s top players in action. eSports have entered the cultural mainstream in a big way. Go back to the 1990s and video games were primarily a solitary activity enjoyed by a young male niche demographic, before a wave of PC games—Doom II, Quake and Warcraft II—popularized competitive play over local networks.
The casual ‘LAN party,’ where players literally brought gaming PCs to one location and networked them together, morphed with the growth of the internet into online
gaming. Players began to compete, both solo and in loose organizations known as clans. By 1997, iD Software, the developer of Doom and Quake, was giving away a Ferrari for winning tournaments. Early eSports stars, like Jonathan ‘Fatal1ty’ Wendel and Dennis ‘Thresh’ Fong,
were earning hundreds of thousands of dollars in both prizes and sponsorship deals. Yet this was just the beginning. In Korea the sci-fi strategy game, StarCraft, became a cultural phenomenon, drawing in four million viewers to watch the biggest tournaments. By the end of the 1990s organizations like the European Electronic Sports League (ESL) had sprung up in
Europe and the US. As online gaming spread from the PC to a new generation of gaming consoles, titles like Call of Duty: Modern Warfare and Halo 2 grew a global audience and global demand. Clans became teams and teams became wealthy enough to support full-time star players. Events like the World Cyber Games and the Intel Extreme Masters moved from small venues into huge arenas. Sponsors and advertisers charged in.
Between 2009 and 2011 eSports reached a new level, as the growth of higher-speed ADSL and fiber broadband services arrived alongside the launch of Twitch. With Twitch you no longer needed expensive studio equipment and expertise to broadcast eSports; with a PC and a fast internet connection, almost anyone could stream. What’s more, eSports
organizations weren’t dependent on TV broadcasters for coverage. They could
converge and edit streams together and create their own. Now eSports is a billion-dollar industry, where games like League of Legends, Overwatch, and Rocket League reach tens of millions of viewers every day. The biggest games, like Fortnite, have championship prize funds in excess of $100 million. As Walker Jacobs, chief revenue officer of Twitch puts it, “Gaming is absolutely not a niche vertical—that is a common misconception. Gaming is a mainstream activity with a massive audience, with 66% of people over the age of 13 identifying as a gamer.” What’s more, eSports already has a massive global audience. As Jacobs notes, “In 2018, 63 million Americans watched eSports league games, matching the viewership of NBA games and making competitive video game events tied for the third-most-popular spectator sport in America last year.” What’s more, this audience is growing. A recent report by eMarketer.com suggests that 30.3 million people in the US alone will watch an eSports event at least once a month and that the audience will grow by more than 50% between now and 2023. Ad revenues from eSports are expected to grow from $102.5 million in 2017 to $213.8 million in 2020. Needless to say, this is a massive opportunity. High profile brands like HP, Intel, Gillette, and Mercedes- Benz have been involved for years through partnership and sponsorship deals, with HP sponsoring the Overwatch League franchise in the US, while Intel has extended its long-term partnership with ESL with a three-year, $100 million deal.
Mercedes-Benz has run campaigns tying nostalgia for pioneering eSports in with the changing shape of its cars. Why are global brands trying so hard? “It all starts with fan engagement,” Jacobs explains. “eSports fans are so passionate and thrive on being part of the content they’re watching, creating a lot of unique opportunities for brands. There is no more effective way to reach young adults in the marketplace today.”
What’s more, it’s a mistake to see just one demographic. In fact, there are as many audiences for eSports as there are eSports games. Even titles like League of Legends and DoTA2 have a broader appeal than the classic young, male geek, while games like Overwatch and Fortnite appeal to young women as much as young men. The research firm, QuanticFoundry, found that women made up some 16% of Overwatch players—more than double the number of other major FPS games. And this is why, as Jacobs puts it, “brands have to determine which leagues and games make the most sense for them. Not all games are appropriate for all brands.” This can be challenging. The eSports audience can be tough, even judgmental, wary of brands jumping on a bandwagon or throwing money at their favorite eSport. They appreciate brands that can understand and show respect for their chosen game and—preferably—brands whose products connect to the game or, to some respect, its perceived values. Luckily, major players like Twitch have the expertise to help. “Advertising on eSports broadcasts is one of the best ways for risk-averse brands to begin to reach this demographic of people between the ages of 18-34,” says Jacobs. “In terms of approach, we aim to help brands speak the eSports language and connect with audiences in their own arena through unskippable, live commercial breaks as well as campaigns that embrace Twitch’s live, social and interactive multiplayer experience.” It’s a move that brands from Gillette to Netflix are making—witness the recent tie-in between Fortnite and the hit show, Stranger Things. “It’s exciting to see how brands are embracing gaming,” Jacobs adds. “It’s a trend I think we’re going to continue to see through integrations with the games themselves, brand partnerships with Twitch streamers, and unique campaigns that are curated for Twitch communities.” This is a sector with huge potential, and there’s still time and space for brands to jump onboard.