Bridging The Gap: Why traditional sports IPs are doubling down on the gaming & Esports market

Headshot for Jehan Moorthy, CEO of New Frontier Esports & Entertainment

With more than 2.7 billion gamers on earth, traditional sports & entertainment brands are seeking the infinite possibilities for adopting Esports as part of their digital strategy. 

Last month, Monumental Sports & Entertainment (MSE) announced plans for the development of a state-of-the-art, destination gaming studio and hospitality space to house an esports competition venue, esports practice, and streaming facility that also provides a food & beverage experience.

To readers familiar with MSE, you are probably most aware of their involvement in operating many top tier sports brands in the National Hockey League (NHL), National Basketball Association (NBA) and Women’s National Basketball Association (WNBA). To a lesser well known extent, MSE has been making incredible strides toward building a brand presence in a segment of society known as gamers. 

Gamers can be summarized as those aged between 18 to 25 who, for the last decade, have been immersed in adopting predominantly digital entertainment-based pastimes and hobbies including video gaming and Esports. For those that skipped our primer on Esports, you can read more about what Esports is here.

gaming & Esports market

For the uninitiated, Esports is best described as any other sport.

But instead of baseball, hockey, football, and rugby, it’s video games like CSGO, League of Legends, Call of Duty, and Fortnite — each with their defined competitive format and legal rules. 

Like in real-world sports with rules, a field of play, and competitive infrastructure spanning players, teams, leagues, broadcasters and the viewing audience, every game in Esports has its own parallels (rules, field of play, competitors, viewing experience and fandom).

Now, replace stadiums, arenas and ballparks with virtual arenas, game modes, and digital infrastructure, and you have competitive Esports. Esports can be further compared to traditional sports where players make split-second decisions while ensuring that the clock or timer hasn’t run them out. Or, when the underdog clinches a one-in-a-million play to take home the title, players get to take home the prize and pride of being the event title holder. 

gaming & Esports market

So then, why are Esports so impactful to brands in sports & entertainment?

On the highest levels, events like League of Legends World Championships have similar audience metrics to major events such as the Superbowl in terms of viewership.

Second to this is that Esports are a consumable form of entertainment for an important consumer group, Gen Z. Young gamers in the 17- to 25-year-old age group watch 34% more esports than traditional sports.

One big reason for this is that Esports, like its audience, is a digital native. In a world where few millennials consume television or radio, Esports are everywhere. You can stream matches on Twitch, play them back on Youtube, discuss them on Discord, watch and share clips across social media, or read about them online on countless gaming-culture blogs and news platforms.

The gaming audience is the future consumer that brands should be looking to capitalize on.

As a whole, Gen Z has an incredible buying power potential. To brands in the sports & entertainment space, it’s an important demographic to secure (especially when the average season ticket holder and long term fan are rapidly increasing in age).

As a Consultant within Esports and Gaming, I often tell brands during our first meeting that they should be concerned by the Gen Z market. For example, they don’t imminently threaten the very fabric of the traditional sports & entertainment industry, but their consumption habits should be looked at carefully. If anything, it’s the perfect time to begin building bridges with this market audience and identifying where you can best serve their interests through brand loyalty and security. 

According to a recently published white paper by strategic consultants Nielson and Fnatic Gaming, the Esports industry is worth $1 billion dollars in 2022 with an audience base projected to exponentially rise by 10%-20% per year. With the gaming and Esports market regularly consuming content in hundreds of billions of hours per year on platforms like Youtube, it’s no wonder that brands see advancing into Esports as the logical next step forward in digital strategy adoption.

In just the past decade, Esports has made huge strides — evolving from a largely underground culture into a mainstream industry featuring leagues, athletes, teams, franchises, back-room staff, and an emerging fan culture.

Important titles to the Esports and gaming community include events around titles such as DOTA 2 (with a mega event featuring a $34.3 million dollar prize pool) to Fornite which regularly schedules a World Cup akin to an Esports variant of the Major League Baseball World Series or Golf Open.

As this industry continues to grow, it has attracted notable investors and sports & entertainment ownership groups led by Mark Cuban and Stan Kroenke, respectively. As this nascent industry further solidifies itself as a viable alternative of entertainment, there are vast opportunities ahead to develop infrastructure, attract talent, and create content geared toward this market segment.

gaming & Esports market

Over the last few years, we have identified a trend in consumerism within gaming and Esports only exacerbated by the stay- at- home orders and the pandemic.

Consumerism  of stream based entertainment is a massive aspect of the gaming & Esports ecosystem. Unlike traditional media, it can be produced by anyone leveraging broadcasting platforms to connect with others and showcase their gameplay, content, highlights and conversation.

Consumers (aka the audience) engage in highly watchable gameplay and learn about what it takes to pull off feats of skill. This format also features comedic meme-centric gameplay that’s often on par with the entertainment offered by the players on the professional Esports scene. There are billions of hours of hyper-social, high-value stream-based entertainment created by streamer personalities or what are known as content creators. 

gaming & Esports market

Occasionally, content creators are retired competitive gamers who continue to hold strong ties to a dedicated community of followers who aspire to play and learn to play Esports at the highest levels.

According to Twitch, a major platform for broadcasting, 3% of users create content with much of their audience subscribed to consuming content. Brands aligning with popular content creators has been a progressive step forward for brands looking to authentically get their foot in the gaming industry door. Brands have successfully leveraged the expansive consumer engagement within stream-based entertainment and created partnerships with streamer personalities through activations.

This week, Dennys and Warner Bros. Studios worked in partnership with Twitch creators to celebrate the release of the Matrix Resurrection. Over 110,000 people signed up for the Denny’s rewards program during the live stream stunt. 

Platforms like Twitch and Tik Tok have allowed consumers to experience deeply personal engagements with their favourite creators through both long form and short form crowd- sourced entertainment. It has also allowed brand IPs such as the Australian Open and NHL teams such as the New York Islanders, Washington Capitals and San Jose Sharks to create successful extensions of their brand in the metaverse through digital fan activations.

Last month, the Australian Open tennis Grand Slam continued a long-term strategic partnership with Fornite to develop a metaverse-orientated exhibit and immersive fan area that exist within the game. The Tennis Grand Slam also hosted another iteration of an annual $100K Australian Dollar Fortnite tournament featuring some of the worlds best Fortnite Duo players. Teams in the English Premier League and Major League Soccer have recently adopted Twitch based content creation as a viable opportunity to host collaborative projects with existing streaming personalities and engage new audiences in brand-led initiatives around gaming culture. 

gaming & Esports market

So how can brands begin creating viable opportunities within the Gaming & Esports ecosystem?

It doesn’t have to start by hosting an event with a massive prize pool, purchasing a team to compete in an established league, or creating a 14K square foot state of the art facility. I write this knowing that the gaming ecosystem can be a daunting space to set foot in — especially for those unfamiliar to the terrain.

New Frontier, as an agency, was formed to assist brands with their entry into the Esports & gaming space through a variety of entry touchpoints that fit within a wider framework of objective-based digital marketing strategy.

We have been tracking the explosive growth of Esports and gaming entertainment firsthand within the domestic market as well as globally. We look forward to partnering with brands to create impactful creative campaigns as part of a wider strategy into the digital economy.

At New Frontier we know that activating within this space leads to one thing — entrenching brand equity with the audience of tomorrow.

Sources:

https://esportsinsider.com/2022/01/nielsen-fnatic-the-roi-of-esports-whitepaper/
https://www.theverge.com/2020/12/8/22163728/youtube-viewers-100-billion-hours-gaming-videos-2020
https://ausopen.com/articles/news/fortnite-returns-australian-open

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Samuel Harrison
Samuel Harrison
9 months ago

Exciting stuff, looking forward to seeing all the possibilities unfolding in this space.

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[…] you missed out on my article about why sports brands are doubling down on the Esports industry, it explains this phenomenon in detail. Generation Z, who have the future in their hands through […]