The eSports opportunity!
How do sports managers need to approach it?
Written by Nathan Moyse, Oren Simanian, and Lilly Cordover.
In this article, sports managers will learn what mindset is needed to approach the eSports opportunity and how to adapt to this new trend that is taking over the sports industry.
First of all, what exactly is eSports? Electronic sports, or eSports, is a form of sports competition using video games. Instead of relying on large muscle groups in order to tackle a player, shoot a free throw, or dribble down the field, eSports involves fine motor movements. These fine motor movements are triggered when there are visual stimuli that are processed by the brain, and then only through rigorous training can patterns be learned and automatic reflexes be developed.
An exponential growth
According to the Global eSports Market Report, the global eSports economy has revenues exceeding $1 billion. Whereas before, eSports were mainly seen as a hobby, we have seen the professionalization of eSports unfolding in the last decade, which substantially increased the investments made in the field. The growth that eSports had been experiencing until 2020 has skyrocketed since the beginning of the recent pandemic.
“In the past year, as the pandemic has ravaged so much, it’s been sort of the opposite for eSports. eSports has been lifted, accelerated, and amplified, largely due to the fact that traditional sports broadcasting, events, and competitions have all been affected in some way, shape or form” said Wim Stocks, former CEO of CSL gaming, at the Sports Tech Nation Summit 2020 session on Innovation and The Future of Sports.
“What has happened is that eSports has been elevated as a replacement program. When there weren’t games in the spring, what took its place from a broadcast perspective resolved around competitive video gaming and eSports.” The most famous example of eSports as a replacement program is Formula 1 organizing online races with its drivers, but this also concerned eSports other than simulated sports. What would have taken at least half a decade to accelerate eSports into the mainstream actually occurred over the last year.
Not to mention, virtual reality will bring about new possibilities in 2021 as it will revolutionize the eSports world by allowing players to seek greater immersive experiences. Through market research done by Newzoo, the eSports demographics of 2021 will continue to expand, and there is an expectation that more females will join the increasing fan base of gamers. Hence, it is safe to say that now is the moment for sports managers to jump on the eSports train, if they haven’t already.
If you’re still not convinced, consider that “traditional sports have a Generation Z problem.” According to Wim Stocks, “Generation Z and millennial aren’t tuning in the same way as the mainstream audiences to traditional sports. eSports is a great tool to bridge the Generation Z with traditional sports.”
With all of that being said, now is the time to invest in eSports. Because of its high growth market, intensity of user engagement, under monetized users, and global audience, it is the premium time to invest. As the sports industry is moving toward entertainment, sports organizations need eSports to stay relevant as brands.
Choosing the right eSports category for your organization
The eSports industry generally makes the distinction between simulated sports and action/fantasy/shooter games. For those who are still unfamiliar with the second category, entering simulated sports can be a good first step to enter the eSports industry. In fact, it will probably be the first of the two categories to be truly a mainstream product according to the PWC Sports Survey 2020. Younger athletes, for whom gaming is a cultural norm, bridge the gap between virtual and traditional sports. Therefore, simulated sports is an opportunity to attract both gamers and non-gamers, and reach a wider audience. For example, the NBA launched its eSports league NBA 2K League in partnership with Take-Two Interactive in 2017. The League comprises 21 actual NBA franchises that create their own 2K team and games are streamed on Twitch. Most soccer teams also have a FIFA team that competes in major competitions. These partnerships between professional teams and eSports teams will create a truly global fan base.
In terms of action/fantasy/shooter games, League of Legends is clearly the leader in terms of viewership (average of 420 hours watched for every hour streamed). In particular, League of Legends tournaments boast higher viewership than some of the biggest U.S. sports leagues. According to PWC, League of Legends, Fortnite and Dota 2 have the greatest return of streaming games online.
Not to mention, the growing use of smartphones globally, the development of 5G and cloud gaming platforms will lead to a surge in mobile gaming. More people are spending their time playing games than ever before as a way for entertainment and social interaction, and COVID-19 has only accelerated this progression. According to Business Wire, the mobile gaming market is expected to have a compounded annual growth rate of 14% during 2020–2025. Therefore, it is also worth exploring collaborations with gaming developers around mobile gaming.
How to approach the eSports opportunity: stay true to yourself
Whatever part of eSports you decide to enter, it is crucial to reflect on what game and what platform would be the most relevant to your organization. Authenticity is a very important factor for Generation Z and it should be perceived around any initiative that emerges from your organization. Choosing the right partner to enter eSports is important, and it will help your organization understand which part of eSports is right to reach the relevant viewership you are aiming for. The best strategy is to select partners that will allow you to maintain your brand identity while also positively contributing to the eSports experience for fans and players. As eSports revolves around its fans, brands should think about the values they can add to the fan experience, and build their eSports around that message with the help of their partners. Most importantly, pick the partner that best aligns with your marketing and business objectives.
Whatever option you choose, it is the peak time to be a part of a rapidly growing industry that is our future.
For more content on eSports, check out the Sports Tech Nation 2020 session on “eSports: the Champion of Disruption”:
