One of the buzzwords of 2019 is indisputably ‘Esports’, and the numbers and statistics explain why this industry is a growing phenomenon. With many projecting that esports spectatorship and revenue will cross into the high billions by 2022[1], esports is thriving with no signs of slowing down. It comes as no surprise then that a whole plethora of stakeholders and brands are now turning their attention to the esports industry.
Finding your foothold
For brands seeking to enter into the esports foray, their marketing and sponsorship budgets are now geared towards engaging esports audiences. Some brands have attempted to do so through team sponsorships. With ‘Cloud 9’ recently valued at a whopping $310 million[2] and with 100 Thieves securing $35 million from Groupe Arnault in Series B funding just yesterday[3], it is unsurprising that stakeholders have elected to move in this direction.
By cultivating, investing and supporting esports teams, stakeholders are endorsing ‘celebrities’ or athletes within the esports sphere, and associating their brands with these teams. However, it must be asked if team sponsorships are the most efficient way to engage with the esports audience.
Interestingly enough, esports and traditional sports can be considered as two sides of the same coin, with both sharing similarities such as revenue generation, operational structures, team organization and athlete management. In this vein, traditional franchised sports leagues like the NBA and the English Premier League have started developing their own NBA2KL and FIFA esports teams.[4] There are some within the sports industry who predict that esports franchised leagues might one day reach the same level as traditional sports.[5]
In the short history of esports, the most ambitious franchised league has been the ‘Overwatch League’ (OWL). The OWL is a league organized by Blizzard Activision, based around its’ massively popular First-Person Shooter game, ‘Overwatch’. Incredibly, franchise fees for teams seeking to compete in the OWL reached $20 million[6], and despite this lofty cost of entry, the ‘OWL’ leagues have been fully subscribed. As a chain reaction, and to generate revenue for entry fees, teams have turned aggressively to securing sponsorships. Yet over the last few months, viewership for the ‘OWL’ league has dipped.[7] This is because unlike traditional sports leagues such as the ‘NBA’ or the ‘English Premier League’, volatility within the professional esports scene is still prevalent.
The rapid nature of gaming and game creation means that new titles can emerge literally overnight to eclipse existing and well-established games — consider the meteoric rise of Apex Legends[8], which had dominated social consciousness and viewership ratings for the first few weeks it was live.
Speculation was rife on the emergence of a potential esports following. Yet, just as quickly as Apex Legends had risen, the general interest of the game plummeted — mainly due to rampant hacking issues.[9] While there is still interest in the game, it is no longer viewed as a competitor to existing titles. Aside from rival esports titles forming, stakeholders should be aware that an active esports scene can be easily disrupted overnight. The most recent incident would be when Blizzard Activision chose to ‘pull-the-plug’ on its Heroes of the Storm (HoTS) esports franchise.[10] This effectively destroyed the HoTS scene and forced many organizations to release their HoTS rosters and players.
This episode served to highlight two key facts:
· First, established esports titles, franchises and leagues are not insulated from new trends or internal issues; and
· Second, there are no guarantees that a new popular title translates into a sustainable esports eco-system, adding a ‘time uncertainty’[11] for stakeholders.
Traditions need to be broken
Various studies over the last few years have highlighted that the new generation of Millennials and Generation Z are cynical of traditional marketing techniques.[12] It is no surprise then that brands have failed to break into the esports industry through traditional marketing techniques.
In 2016, ‘Bud Light’ asked esports fans to vote from a pool of 20 esports athletes across five (5) different games, with the highest scoring athletes slated to become ‘Bud Light All-Stars’.[13]
Speculation on the benefits of ‘Bud Light All-stars’, attracted avid discussions online but ultimately, the end result led to bitter disappointment for esports fans and participating athletes when it was revealed that the winners of the ‘Bud Light All-stars’ challenge were simply made to do promo work and wear some hats.[14]
It is imperative then, that stakeholders realize, that as the esports industry continues to grow, new methods ought to be explored to cultivate brand loyalty and awareness beyond the obvious (and frankly, “lazy”) strategy to solely utilize traditional marketing.
Gamification as an Experience
Gamification to create an experiential marketing domain has the potential address the challenges faced by brands to engage esports audiences. Gamification introduces playful elements into otherwise mundane tasks (such as passively spectating an esports match) by tapping into the two core motivations that human beings desire: Intrinsic and Extrinsic motivations.[15]
Intrinsic motivations are the desire for intangible rewards, such as feeling of succeeding in a challenge.[16] Conversely, tangible rewards appeal to extrinsic motivations, which prompts individuals to exert effort for some form of external reward.[17] Fundamentally, gamification utilizes these motivations to shape positive consumption behaviors towards your brand by emplacing your target audience into an experiential domain that provides a meaningful and authentic experience, all while embedding your brand equity at the center of their gamified user journey.
The Next Steps
As the esports industry begins to become an increasingly time-starved and saturated environment, audiences are less concerned with “what” your message is but are instead more captivated by “why” they should pay attention to your brand.
If you want to engage the esports audience, you should not divest your entire marketing budget into overused channels such as team sponsorships or traditional marketing.
You will need to reimagine how your brand engages with the esport audience — and TOKIGAMES has made it its mission to enable you to do just that (gamify@tokigames.com).
Written by Mervyn Lau, CEO and Legal Counsel at TOKIGAMES | Advocate & Solicitor of the Supreme Court of Singapore | Member at MENSA Singapore |
Sources
[1] https://www.emarketer.com/content/esports-disrupts-digital-sports-streaming
[2] The World’s Most Valuable Esports Companies
[3] https://techcrunch.com/2019/07/16/esports-org-100-thieves-raises-35-million-in-series-b/
[4] Esports: Liverpool win first ePremier League tournament (The finals of the first ePremier league tournament was held on the 28–29 March 2019, with big stakeholders in the football industry such as Manchester United, Liverpool, and Chelsea fielding their own esports teams. The 40 players who won their respective club’s qualifiers faced off on the 28–29th of March at the Gfinity arena, which is used exclusively for Esports events.
[5] https://onlinebusiness.syr.edu/blog/esports-to-compete-with-traditional-sports/
[6] Refer to note 3.
[7] https://esportsobserver.com/owl-twitch-stage-three-2019/
[8] https://supplychenmanagement.com/2019/03/13/rise-and-fall-of-apex-legends/
[9] See note 8.
[10] https://kotaku.com/blizzard-abruptly-kills-heroes-of-the-storm-esports-le-1831103023
[11] Stakeholder seeking to move into the esports industry, might have to factor in that an esports title can lose popularity rapidly, from an emerging competitor or a few bad patches (game balances).
[12] Nielson Esports Playbook 2017, amongst other sources.
[13] Esports meets mainstream: Looking back on Bud Light’s failed entry into esports one year later (https://www.thescoreesports.com/news/14165-esports-meets-mainstream-looking-back-on-bud-lights-failed-entry-into-esports-one-year-later).
[14] See Note 13.
[15] “Examining the impact of gamification on intention of engagement and brand attitude in the marketing context” by Yang Yang, Yousra Asaad, Yogesh Dwivedi (2017).
[16] See Note 15.
[17] See Note 15.
