eSports – the burgeoning battleground for brands

June 24, 2014

Image:  League of Legends Season 3 World Championship at the STAPLE Centre, 2013

How eSports get 32 million people to watch and raise $24 mil USD

How would you feel having 32 million people viewing your content for a single event? 

Last year, 32 million people viewed the League of Legends world championship, and 8.5 million watched the grand finals concurrently. What on earth is League of Legends you ask? In short, it’s an online battle arena game that has grown into more than just a video game; it’s become an electronic sport (eSport). Gone are the days of gamers hiding in their Mum’s basement and other stereotypical social stigmas. They now play live in sold out stadiums in front of thousands of cheering fans and simultaneously streamed around the world into people homes. 

You might be thinking “that’s cool and all but why should I care”? eSports are engaging with their consumers in new/compelling ways and generating revenue at the same time. 

Game development powerhouse Valve who own DotA 2, a free-to-play game, are using a crowd funding strategy to inflate the player prize pool for their world championship tournament The International. Players have the choice to purchase an in-game compendium that grants you cosmetic items and ways that you can interact with the tournament itself and the game. This gives you no competitive edge in the game and not purchasing doesn’t preclude you access to watch the entire tournament. This strategy has increased the prize pool to almost US$10M and generated Valve US$24M profit, with the main event is still a month away. This is the biggest prize pool in eSports history, and the tournament hasn’t started yet. 

This in-game crowd funding strategy is available to all organisations that use the DotA 2 platform. Valve has created something that people want to purchase for the love of the game and at the same time given their community a way to raise their own funds to further the eSport. 

Why attract gamers to your brand 

Gamers might not be the sexiest demographics, but they comprise of notoriously hard-to-reach young adult males who do not watch traditional TV. Just over one fifth (21%) of these males are between the age of 26 and 30. They are more likely to not have any dependents and – as you can see from the DotA 2 example – are ready to spend their cash.

The size of the eSports community is nothing to joke about according to Newzoo, a market research and consulting firm that specialises in the gaming community there are 227 million people who identify as PC/MMO gamers. Many of which are in Asia, including China which is typically a very hard market to break into.

So how do eSports manage to get and keep the attention of their consumers?

eSports have created their own channels moving away from traditional mediums. The biggest channel is the streaming website Twitch was not created with eSports only in mind; anyone can stream on it. Over 900,000 people broadcast their gameplay on twitch and 45 million people tune in each month. These viewers are highly engaged, each watching on average 106 minutes per day. It has become so popular that Sony has built streaming capability for Twitch into the PS4 and Xbox One is soon to follow suit. Other big players have noticed the potential of Twitch and eSports; Youtube is set to acquire Twitch for more than 1 Billion USD and they have plans to use the live streaming model across their other channels.

The most common way brands engage with eSports is the same as regular sports through team or event sponsorships. Brands well known for going off the beaten track like Redbull and Monster have been involved for a few years now. Recently other big names have entered the eSports arena. Coca-Cola, American Express & Nissan have all recently partnered with Riot Games who own Twitch’s number one viewed game League of Legends. American express has become the official payment partner of the league of legends championship series and offers special in game rewards. Nissan has partnered with a professional League of Legends team to run a series of online advertising campaigns. Nissan also take advantage of the increased interactions between talent and the public that eSports players have on a regular basis for direct marketing. Coca-Cola have got involved in a big way sponsoring and creating tournaments. They are positioning Coke Zero as their eSports beverage and have even crossed their hugely popular bottle naming campaign into the category. 

The eSports scene is maturing at an exponential rate as more established brands start taking notice. It is fostered by a community that is open to change in how content is delivered and how they interact with it. There are no completely established norms. This is not the final frontier it’s not actually a new one it’s been growing steadily in the background for years but it’s about to start taking centre stage in the mainstream.