Esports opportunities for retailers and brands
by Mathew Weiss. Esports is the fasting growing sport in the world. And will no doubt explode globally online with half the world under lockdown in their homes and real sporting events cancelled.
by Mathew Weiss. Esports is the fasting growing sport in the world. It is increasingly popular locally, yet it remains a mystery to most of us in marketing. This lack of understanding by local brand owners represents an opportunity for retailers willing to take the lead.
Much has been written about esports’ staggering growth. Newzoo’s 2020 report predicts global revenues will reach $1.1bn in 2020, an increase of $150 million over the previous year. The highest-grossing esports revenue stream will be sponsorship, which will generate $637 million in 2020.
The global esports audience will grow to 495 million in 2020, of which 60% are occasional viewers and the rest dedicated fans. These people are young – on average, much younger than other sports fans. The median age is 28 compared to 42 for the English Premier League and 64 for the PGA. For many brands, 18-34 is the sweet spot for campaigns.
Prize money now reflects the scale of the sport. In 2019, Kyle “Bugha” Giersdorf, a 16-year-old from Pennsylvania won the $3m solo prize, of a total $30m in prize money at the Fortnight World Cup. Between YouTube and Twitch, the World Cup attracted more than two million concurrent viewers. By comparison, winning Wimbledon will net the champion of both the men’s and women’s singles $2,9m out of a total purse of $44m.
Esports vs gaming
A lot of this growth is coming from emerging markets, especially China, but also South Africa. PWC’s 2019 report on Africa’s Entertainment and Media Outlook, forecast total esport revenue in SA will reach R138 million in 2023, up from R46 million in 2018. That’s a CAGR of nearly 50%, albeit off a low base. This could be even higher if the government acts to bring down data costs.
From working with ESL and others in the category, we’ve learned that a barrier to entry for clients is the confusion around esports terminology and its complex ecosystem. Take football; it’s the same game with the same rules whether it’s kids kicking a ball around or Christiano Ronaldo celebrating his latest wonder goal for Juventus. It’s not the same with esports. On a small scale, kids playing at home are ‘gaming’, but when it becomes competitive, played by professionals that have a coach, it’s called esports.
This is an important distinction because the audience profiles for gaming and esports are different. Women make up 48% of people who play video games, but in esports, 90% of fans are men. This will change over time, but if your brand is more focused on female customers, then you would probably want to do something in gaming rather than esports.
Another consideration is the fan base linked to different games, as the eyeballs that brand owners are looking for aren’t evenly distributed. In gaming, you get fewer players as the skill levels go up. Take a game like FIFA, for example, a lot of people play it, but few are good enough to play it professionally. But the inverse is true of fans. The greater the skill on display, the greater the number of fans that watch. Relative to strategy or multiplayer games like Counter-Strike: Global Offensive (CS:GO) playing FIFA competitively is less complex, so the number of fans that watch FIFA competitions globally is significantly lower than CS:GO. Brands that are looking to align with a specific title rather than be part of a multi-title event, held by the likes of ESL or VS Gaming, need to take the game’s fan profile and reach into account.
Understanding local context also matters if you are choosing an esports title to focus on. The fact that football is already popular in SA and is simple to pick up on makes it an easy entry point. And as in any sport, equipment matters, so the fact that you only need a console and a TV to play means FIFA will attract a sizeable local audience.
Retailers can get involved through supporting grassroots development and smaller competitions or investing in bigger events. Vodacom has done both by launching a new esports hub at Vodacom World and is the headline sponsor of the annual Rush esports event at the Rand Show. A significant commitment that aligns well with Vodacom’s own future-focused and technology-driven brand.
While event sponsorship is good for awareness, getting involved at a grassroots level could have longer-term strategic value for retailers. Younger audiences are hard to reach with traditional advertising mechanics; so a brand that ‘shows up’ for the long haul, nurtures an interest in the sport, supports local venues and helps find the next star, will appeal more to esports enthusiasts than a brand spending big at a one-off event. Not least because doing so helps drive inclusion.
Like other sport in South Africa, esports is one of those occasions where people can come together around a shared passion. Debonairs Pizza has gone this route hosting casual tournaments and sponsoring prizes as part of Arcade X, in addition to sponsoring well-known esports teams; Sinister 5 and White Rabbit Gaming and “keeping their players well-fed during the build-up to their tournaments”.
Based on the numbers, the audience profile and the relative lack of brands involved, it appears the goal is wide open for more retailers to get involved in esports and piggyback on the rapid growth forecast by PWC and others.
Mathew Weiss is the managing director for Superunion Africa. He has accumulated broad experience in both design and advertising in the US, Central America and EMEA where he built brands across a range of industries including FMCG, Financial Services, Hospitality and Tourism. He has a degree in English literature and a diploma in strategic marketing from Cambridge. As a keen sportsman, he spends much of his spare time in pursuit of a lower handicap and fewer double faults.
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