eSports: a new channel of opportunity for advertisers

The emergence of eSports as a gaming phenomenon is giving rise to incredible new sponsorship opportunities, writes Starcom Mediavest Group’s Kieran Smith.

If the term ‘gaming’ still evokes images of teenagers tucked away in their bedrooms avoiding their parents, then think again.

It has been 21 years since the launch of Sony’s PlayStation and the gaming world has most certainly evolved since then; the reclusive individual no longer represents the core of the gaming community. In fact, there’s half a chance (55% to be exact) that you are classified as a gamer without even realising it.

Game developer King (creator of the popular game Candy Crush) has 474 million monthly active users globally and almost a third of them play daily. The UK boasts an astounding 34.7m people who regularly play video games across PC, tablet, mobile or consoles (PS4, Xbox etc.) according to research body, Newzoo (2014).

To put that number into perspective, more people play video games in the UK than have a Facebook account (approximately 33m). It even supersedes those that tuned in to watch England lift their only FIFA World Cup trophy in 1966, one of the largest TV viewing audiences ever recorded (32.3m). In fact, the UK is the 6th largest gaming nation on the planet (behind South Korea, China, Japan, Germany and the US), contributing £3.9bn to the economy.

But it isn’t just the speed of growth that is fascinating, it is the emergence of eSports as a gaming phenomenon that has huge potential for brands to get involved.

eSports is essentially competitive gaming, whereby gamers face off in titles like League of Legends and FIFA on grand scales (arenas, stadia and online) for lucrative prize funds, either as part of a team or independently.

It’s huge: global eSports audiences are predicted to reach 145m in 2017.

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Games such League of Legends (LoL), boasts an online audience of 67m monthly players. 2014’s LoL World Championship saw the final played out live in front of 45,000 paying spectators at Seoul’s Sangam Stadium (a 2002 FIFA World Cup venue), with an additional 27m streaming the contest between Samsung Galaxy White and Star Horn Royal Club online.

The prize fund that year was $1m for the winning team. In 2016, tournament prize money is expected to peak at $6m for victors. That’s nearly double the amount that the 2016 Men’s Singles US Open champion will take home ($3.3m), the highest prize fund in professional tennis.

In the UK, eSports is still in its infancy, with an estimated 4.4m participating in some form but it is already making tremendous strides forward. 2015 has seen the UK’s first sold out ‘Legends of Gaming’ event held at Alexandra Palace in September, following 2014’s G3 eSports summit at Queen Elizabeth Olympic Park’s Copper Box, which saw 4,000 attendees.

We’re also starting to see the emergence of physical eSports infrastructure, including purpose-built gaming arenas, such as Vue Cinema’s ‘Gfinity Arena’, where eSports tournaments are held on a weekly basis at their Fulham Broadway multiplex for prize money and qualification points.

However, watching tournaments in person is only half the story. In October 2015, the BBC signed an agreement to broadcast eSports content on its iPlayer platform, alongside BBC Sport.

Platforms such as YouTube and Twitch are reporting staggering growth in gaming video consumption, in which the UK plays an integral part. Betway even became the first major bookmaker to launch a dedicated eSports betting portal in August 2015, to allow fans to wager on tournaments in the same way they do for other sports. It is only a matter of time before there are more dedicated eSports platforms competing to play host.

Although farfetched, it’s not entirely unfathomable for the much-anticipated introduction of VR (Virtual Reality) gaming headsets in 2016 to become the catalyst for eSports to go from the screen to the real-world. The emergence of companies such as The Void (thevoid.com) would seemingly support that view.

What does it mean for brands?

Live experiential moments matter. eSports side-steps many of the traditional fears around solitary gaming because it is as much about the community and the feeling of the event as it is about the game itself.

As a result, eSports possesses all of the attributes to be the flame that finally starts the fire for advertising investment. With the expected increase in physical eSports infrastructure, there are also obvious opportunities for brand communications to geo-target venues with hyper-relevant messaging and experiential in the form of product trial.

eSports stars should be considered as important as other celebrities for brand endorsement. Given eSports was born at the intersection of technology, fandom and interactive entertainment, it’s no surprise that it is the players that are getting the most lucrative deals. Like traditional athletes, superstar gamers are commodities that can be sponsored or endorsed.

PewDiePie, one of the most popular gaming personalities, already boasts 40m YouTube subscribers (Cristiano Ronaldo has 38.4m Twitter followers, LeBron James has 24.5m) but the vast majority of eSports ‘pros’ are still relatively unknown, thus significantly cheaper if brands are looking to leverage their wide-reaching appeal.

Samsung has already formed its own teams in South Korea, providing cherry-picked ‘stars’ with bespoke kits which are then sold as merchandise, just as globally recognised sports teams do, and are one of the first brands to capitalise on the commercial opportunities eSports offers.

Corporate sponsorship is an important part of eSports global revenue. Total revenue was reported at $612m in 2015, with $111m of this total coming from corporate sponsorships. Major brands including Coca Cola, Intel and Nissan are now investing in the space in the US, and are expected to follow suit in the UK.

What does it mean for media and communications?

As media consumption fragments (especially amongst the younger generation), the challenge for many brands is reaching targeted audiences at scale. Gaming as a whole is potentially the largest passion point to ever exist, given half the population plays, meaning there has never been a better way to reach such a broad demographic audience in one fell swoop.

It doesn’t matter whether you’re targeting a 4 year-old or 74 year-old, C2DE or even female (52% majority), they’re all part of an extremely diverse and mainstream gaming audience that by and large has been overlooked to date.

If we consider the whole ecosystem of competitive gaming: the competitors, spectators, commentators, and the plethora of opportunities for brands to integrate within and around the games, eSports becomes a powerful means to connect with big audiences.

Kieran Smith is planning account manager at SMG

The Rise of eSports is taken from Starcom Mediavest Group’s ‘Needs to Know’ book which examines the five key emerging trends for 2016.