Why Do You Need an eSports Strategy?

Reports indicate that eSports will be a billion-dollar industry in the next three years. How can you prepare to capture some of the market?

A few weeks ago Twitch, the live streaming video platform targeted at gamers, released its 2015 Retrospective that contained one stand-out statistic: in the previous 12 months its users had streamed 241,441,823,059 minutes (or, put another way, over 450,00 years) of content.

Wow.

Here are some other figures from the report:

  • There was an average of 550,000 concurrent viewers at any one time;
  • Peak simultaneous viewers numbered at over 2 million;
  • The average minutes watched per user per month was 421.6 (Twitch notes that it’s 291 minutes on YouTube);
  • Over 9 billion messages were sent (averaging at around 17,500 per minute);
  • One eSports tournament (ESL: One) had over 27 million unique viewers over one weekend.

Those numbers represent a level of engagement that some broadcasters can only dream of. They also reveal some pretty staggering growth – peak concurrent viewers grew by 100% year-on-year, for example. This raises an interesting question: should eSports form part of your broadcast offering?

Some thoughts below, from myself and a couple of gaming experts. Let me know what you think @consultVodkr.

#1. What Exactly is eSports?

The term ‘eSports’ essentially refers to the playing of video games at a competitive level. In the context of video, tournaments are streamed online via platforms like Twitch or YouTube Gaming ( which launched last year) and are watched by millions of viewers, in turn generating bumper profits through advertising and / or sponsorships.

Cyber athletes can become celebrities in their own right, establishing loyal fan-bases who follow their progress fervently from one competition to the next. Whilst the winners have the opportunity to take home huge cash prizes (not to mention serious bragging rights) they are by far the minority. Most gamers typically supplement their income via ad-revenue and donations on personal streaming channels.

So how big is the industry exactly? A report released earlier this year by Newzoo, a market intelligence firm specialising in gaming, mobile and eSports, anticipates the global market to grow by 43% to $463 million this year. In 2019 this number will rise to $1.1 billion and an estimated 180 million spectators will be tuning in regularly to watch their favourite cyber athletes battle it out (see infographic below). This alone should be piquing the interest of traditional broadcaster’s / service providers – eSports presents an opportunity to reach an audience that has been otherwise untapped.

 

#2. Why is it So Popular?

One of the main reasons why eSports is so popular lies in the level of engagement that the “athletes” can have with their fans. As mentioned above, the majority of professional gamers run their own personal streaming channels on platforms such as Twitch or YouTube Gaming. These channels, where essentially the creator is filming themselves playing video games, act as a direct portal through which they can communicate with their audience.

It is clear that there is a real sense of community within these services. The chatroom allows viewers to not only talk amongst themselves, but also directly with the streamer. Unlike celebrities in traditional media (i.e. TV shows or films), cyber athletes can foster a much more personal relationship with their fans in real-time. The best don’t simply sit there and play games – they entertain and engage their audience whilst doing so.

The rapid growth of eSports can also be attributed to its accessibility. The internet has enabled anyone with a strong enough broadband connection to tune in to tournaments; there are no broadcast rights to deal with, no expensive pay-tv packages to subscribe to and for a user it’s a case of just logging into their favourite platform and sitting back to enjoy.

All of this isn’t being lost on some broadcasters. Here are some other examples of major entertainment providers dipping their toes into eSports:

#3. How Do eSports Fit in My Roadmap?

For Neville Upton, CEO of Gfinity, a company which organises and streams gaming events from its own 300-seat arena based in Fulham Broadway, there is a clear synergy between eSports and TV networks. He told me:

“It’s a very fast growing market and for people under 30, it can be a fundamental part of their life. The audience is predominately 16-34 year-old males who we know are difficult to reach – they’re watching less linear TV and more OTT. For broadcasters, it’s important to be associated with [eSports] as it creates the right sort of brand image.”

This is a powerful thing. Whilst TV advertising is under pressure (thanks to the arrival of ad-free services like Netflix and the popularity of ad-blockers) its revenues still accounted for £5.27 billion in 2015. Being in a position to offer this sought-after demographic to brands looking to get their product in front of the right eyeballs is a win-win.

Upton also believes that broadcasters have expertise in regards to content creation that they can leverage to help grow eSports even faster. Specifically, he talked about the “human-dimension” of traditional sports, where networks produce lots of additional coverage surrounding the event itself:

“Take the Cambridge vs. Oxford boat race that happened this weekend. [The broadcaster] will be interviewing everyone pre- and post- show, go to their houses and talk to their parents, document the rigours of training, the sacrifice that goes into becoming an athlete. The gamers who compete at these events are making career decisions, sometimes giving up very successful jobs elsewhere, in order to be the best. That’s a very human story to tell.”

Whilst it’s clear that there is money to be made for those who secure the rights to a major gaming events, it’s important to consider where the audience for this type of content spends their time. The answer? Perhaps not watching terrestrial television. Check out this quote from a BBC interview with Michal Bilcharz, Managing Director of the eSports league Pro Gaming ESL:

“It sounds maybe arrogant but we’re not interested in television, being on television, because television actually limits us. We’re on Twitch, we’re global, anybody can watch…there are no limits to that and I think Twitch and entertainment like eSports is redefining how entertainment is consumed on a global level with the internet. I think the old borders of ‘this content is not available in your region’ is going away, and I think eSports is a young budding industry that had no choice but to find something like Twitch. It’s paving the way for future entertainment.”

Broadcasting an eSports tournament on a linear channel strips away some of the elements that make it so accessible for users on a platform such as Twitch: the ability to engage with fellow like-minded fans via the chatroom or to watch on any device or from any location. For the best ROI, networks that purchase eSports rights should broadcast them via the medium where the bulk of their viewers lie – online.

#4. The Future of eSports

So what does the future for hold for eSports? I think that over the next two years we’re going to see a growing number of service providers begin to pump cash into facilitating eSports coverage and attempt to throw off the idea that hard-core competitive gaming is an industry solely targeted at pre-pubescent males.

Distribution from broadcasters will be, in the first instance, linear, however this will quickly change as they experiment with leveraging their existing streaming platforms or perhaps even building their own bespoke gaming propositions complete with the functionality that enhances the eSports experience: chat rooms, donation buttons and the ability for users to set up their own channels. Monetisation will likely come from advertisements, sponsored content and pay-per-view and, as the medium grows increasingly more popular, mega profits will be up for grabs.

Tweet me your thoughts @consultVodkr



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