The rapid growth of esports as a profession is having a massive impact on the video-game industry. Games being played competitively are overwhelmingly proving far more popular than games than aren’t – which is something developers and publishers simply can’t afford to ignore.
ESL: the world’s biggest esports video-game events company
Formed in 2000, ESL has grown to become, in 2015, the biggest video-game events company in the world. It has vaulted high-stakes virtual battles from diminutive cafes to stadiums and arenas with tens of thousands of roaring fans. The company runs an all-encompassing global eco-system from grassroots to the world’s elite players.
The company said annual viewing of ESL productions more than doubled from 2012 to 2014, to more than 50 million hours, reaching 70 million individuals, mostly online. By 2016 this reach had topped 171.9 million viewers – and, buoyed by its recent streaming deal with Facebook, is projected to increase that figure to a staggering 250.5 million by 2025.
ESL also is also busy branching into related businesses. It’s looking to spearhead drug testing, betting regulations, stat-keeping and other industrywide standards. If the pieces come together, Reichert sees media rights fees, ticket sales and sponsorship deals booming. Merchandise, tournament entry fees and online ads also contribute revenue.
Can ESL survive? Let’s put it this way: it’s brand value is seen to match that of other major sports brands – including Adidas, Nike and Red Bull – and it currently ranks as the 23rd most influential such brand.
ROI: Reaching the millennial demographic
According to André Fläckel, Director of esports at marketer Lagadère Sports, “esports are on the path to becoming among the most important sports worldwide.” The most important reasons? “The target group is young,” ages 16 to 25, “well-educated on average, and are becoming more and more difficult to reach via classic channels.”
esports present optimal opportunities to reach a target group facing “lots of first-time experiences,” as Cédric Schulte-Langforth, Manager of New Business at Lagadère Plus, explains. Buying their first car, for instance, getting insurance, and where possible, committing themselves long-term to a brand: “This target group is uniquely attractive,” he says.
It’s thought that the opportunities presented by this flourishing sector are such that, sooner rather than later, every major player in the sports business will have to ask themselves how to get involved.
Innovative Distribution Strategies
esports and digitalization go hand in hand. Accessed games digitally offers numerous benefits over the traditional model whereby games were bought in retail stores (and played mostly by single users). Digitally delivered games allow multi-users to play, which tend to be more popular these days.
Video streaming portals like YouTube and Twitch are now making tonnes of money through their free streaming services. Game companies are devising ways to monetise this by introducing revenue-sharing programs to users. (For example, Major League Gaming has added subscriptions to its sport streams.)
ESL’s holistic global content distribution approach comprises six main channels:
- Virtual Reality
- Subscription-Based Service
- Linear TV
- Digital Global Live Streaming
- Global Video on Demand
- Local Digital Streaming