XLIVE Online is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Investing in Esports Why brands and Celebrities Want a Piece of the Esports Scene.jpg

Investing in Esports: Why brands and Celebrities Want a Piece of the Esports Scene

INVESTING IN ESPORTS: WHY BRANDS AND CELEBRITIES WANT A PIECE OF THE ESPORTS SCENE

Sixty-million viewers. A $4.5 million prize pool. Accomplished singers. The prestigious Beijing National Stadium.

The stadium, known for hosting the 2008 Summer Olympics, this venue is known for normally reserved for big events. This event would be among the biggest yet: the 2017 League of Legends (LoL) World Championships.

As the band Against the Current and famed Taiwanese singer Jay Chou sang their song for the event, “Legends Never Die,” the throng of fans at the LoL event showed the immediate power of esports.

But it’s not just gamers that see how much esports have grown in just the past few years. Celebrities, CEOs, and millionaires have noticed the power of the genre as well.

Investing in Esports Why brands and Celebrities Want a Piece of the Esports Scene 2

The 2017 League of Legends (LoL) Finals had 60 million viewers

Today, esports is a very profitable and in-demand scene. Each year, more brands are starting to take notice and want a piece of the esports pie. This is with good reason.

Just a quick look at the numbers show just how powerful esports is:

  1. Over 380 million people watched esports both online and in person in 2016
  2. More people watched the 2017 LoL Finals (60 million) than the NBA Finals (31 million)
  3. In 2019, there will be about 427 million projected esports viewers
  4. More men age 18 to 25 watch esports than traditional sports
  5. In 2018, esports revenue is predicted to be $905 million, a 38% increase from 2017’s $655 million

Non-gaming brands such as ESPN, Gillette, T-Mobile, BMW, and Mercedes Benz are just a few that are investing millions into the genre. But it’s just not companies either. Celebrities like Mariah Carey, Shaquille O’Neal, Steve Aoki, Alex Rodriguez, and Mark Cuban are already tapping into the esports scene.

Although not all celebrities that invest into esports actually play games, they know opportunity. The sheer number of gamers say it all. To many of these new esports moguls, they see competitive gaming as a profitable venture and want in early to reap the potential profit.

But don’t lump Mark Cuban in the “celebrities that merely invest into esports without playing them.” After all, he experienced it firsthand when he played with his LoL team in a Celebrity match at IEM San Jose 2015.

“I love Colin, but he’s an idiot when it comes to esports” – Mark Cuban, Owner of the Dallas Mavericks and Shark Tank investor

“I’m a noob, but I love it [esports]. This is a real sport and people will figure it out,” Cuban said.

Cuban, who’s the billionaire owner of the NBA team, the Dallas Mavericks, and one of the shark investors on the show Shark Tank, is a big esports supporter. Not only did he back the ever-growing genre, he publicly called out his friend and Fox Sports host Colin Cowherd of the Cowherd Show at IEM San Jose.

“I love Colin, but he’s an idiot when it comes to esports,” Cuban said to the cheers of the IEM audience, as well as Cowherd’s former co-host, Kristine Leahy. Earlier in the week, Cowherd called esports players nerds and stated that if Fox Sports ever got into esports, he would quit the network.

He continued to profess his love for esports, giving respect to the players, coaches, and teams on how complex esports matches can be.

With moguls such as Cuban backing esports, one would think that gaming has been in the spotlight for a long time. Yet the origins of modern esports is still relatively new.

Investing in Esports Why brands and Celebrities Want a Piece of the Esports Scene 3

Dallas Mavericks owner and billionaire Mark Cuban endorsing esports with Kristine Leahy interviewing him

SO WHERE DID ESPORTS START?

It all started in the esports capital of the world nearly two decades ago. Seoul, Korea, 2000.

That year, the Korean government formed the Korean esports Association. Back then, investing in video games risky. While there have been esports tournaments in the 90s in the Quake series, Warcraft, and Counter-Strike, these gatherings would only happen every so often. The idea of having brands and companies sinking millions of dollars into competitive video game events year-round was still unheard of.

The concept of paying individual players and teams a salary, having video game teams sponsored alongside big brand names, and players having popularity the likes of famous rock and pop stars was laughable back then.

Yet, the Korean government and their esports Association took the plunge and invested in a Blizzard game called Starcraft: Brood War, not knowing if esports would catch on. To the surprise to nearly everyone, Brood War didn’t just succeed in Korea. The game exploded and became the national game of the country. Starcraft games would be televised throughout Korea and its players becoming overnight esports celebrities.

 Remastered)

Starcraft: Brood War would be a huge phenomenon in Korea (this is from Starcraft: Remastered)

Brands such as Korean Air, GOMTV, and AfreecaTV bought in and believed in the Korean esports scene. In the mid-to-late 2000s, esports brands in the US and Europe were starting to emerge. The future of esports looked bright.

In the 2010s is where esports grown immensely, with companies willing to pour massive investment in the genre.

Since esports is on a global scale today, with tens of millions watching either live, through Twitch, or YouTube, companies know that the immense advertising, branding, and marketing opportunities are there. With millions of the lucrative 18-35 year demographic into esports, many brands see a huge gold mine largely untapped.

Investing in Esports Why brands and Celebrities Want a Piece of the Esports Scene 5

Food brands such as Mountain Dew and Doritos are getting into the esports scene

Food and beverage brands, such as Red Bull, Mountain Dew, and Doritos have invested millions in esports. Since gamers are a huge market for snacks and energy drinks, these companies are sinking their money into advertisements on social media, team uniform logos, and sponsoring esports tournaments. These brands are banking that gamers will associate their food products with esports. In turn, this will translate to more profit and a stronger social media presence.

Computer hardware companies such as Intel, AMD, and Razer, have also already put their fingerprints in esports. In 2017, PC hardware sales was roughly $20 billion dollars, with an addition $2.4 billion in gaming peripherals, such as mice, headsets, and keyboards. Consumers are more likely to buy PC hardware if they see esports players associated with PC brands.

GAMING POWERHOUSE COMPANIES ARE ALSO HOPPING ON THE ESPORTS TRAIN.

China’s Tencent is one of them. As the world’s largest mobile gaming company and parent company to LoL’s Riot Games, Tencent became a big player in the esports scene. China has one of the largest esports scenes in the world, with the Chinese government warning up to the esports scene.

Tencent knew the huge gaming demand in the country, with internet cafes popping up and more Chinese pro players turning pro. In June 2017, they made their move, as announced that they plan to pour about $14.6 billion dollars in the industry. The investment will be used to create new leagues, tournaments, and esports-themed parks.

Another example is the Overwatch League. Created in 2017 and headed by Blizzard Entertainment, the league is modeled after traditional sports, where teams are tied geographically, rather than by brand name.

For much of esports history, teams were named after their brand or team names, such as Korean companies SK1 Telecom and JinAir or US teams TSM (Team SoloMid) and Cloud9. However, with the Overwatch League, teams such as the Houston Outlaws or New York Excelsior will share the pro sports naming convention.

When the league first started, there would be 12 teams. To be an owner of one of the 12 teams, there was a $20 million buy-in fee, a price exclusive only to the biggest companies, investors, and A-list celebrities. Two sports owners, New England Patriots’ Robert Kraft and Los Angeles Rams owner Stan Kroenke saw the immediate potential in esports and bought into the league. Their teams would be the Boston Uprising and the Los Angeles Gladiators respectively.

But it’s not just huge conglomerates or billionaires getting into esports. For some, gaming was their childhood. And for others, esports scratches that competitive itch you won’t find in many places.

One person is former NBA player Rick Fox. He believed in esports so much after witnessing the 2015 LoL World Championships that he wanted in. His competiveness is one big reason that drove him into the esports scene.

Rick Fox channeled his NBA competitiveness into esports

Rick Fox channeled his NBA competitiveness into esports

Shortly after, he created his own esports brand Echo Fox for $1 million – a value that’s now a steal, since his team is probably worth several times more. Unlike in traditional sports, where one team plays one sport, esports teams has several teams under the same banner. Fox houses several esports teams under his brand such as Street Fighter VLoLDragonball Fighter ZSuper Smash Bros, and Tekken 7.

But unlike many esports investors that dump millions into a club and are hands-off, Fox is the exact opposite. He completely hands-on and not only cares for his esports teams, but the genre itself. To set the tone for his teams, Fox and his coaches infused some of Fox’s old-school NBA habits on his players.

“I think today’s gamer is proud of what they do. They own it, they  celebrate it [their gaming accomplishments].” – Rick Fox, Former LA Laker and co-owner of Echo Fox

Whereas gamers are prone to wake up around noon, if not later, Fox urged his teams to wake up much earlier when the sun rises. When he sees some of his players downing Pop-Tarts for lunch, he says that a healthy nutrition plan should look like this instead, showing a much healthier food selection. When his players show predictable tendencies or bad habits during a match, he calls them out for being too predictable and needing to fix those mistakes.

Fox even hired a nutrition coach and made his players work out at a gym called TriFit. He knew that gamers needed exercise and needed to stay healthy to not only stay in peak shape during games, but to also avoid an early retirement.

Investing in Esports Why brands and Celebrities Want a Piece of the Esports Scene 7

Former LA Laker Rick Fox explains why he’s all in in esports

TriFit co-founder Gina Baski’s take on Fox’s belief in fitness, “I think what they’re looking at is long-game and long-game is you can’t have all these guys retire at 22. You can’t invest in them and have them retire two years later because they’re so burned out.

To many close to Fox, they believe he’s already putting his stamp in the esports scene through Echo Fox. Many think Fox gets it.

”I think today’s gamer is proud of what they do,” Fox said. ”They own it, they celebrate it. ”That education needs to happen for people to understand that a kid playing video games is not wasting their time.”

Atlanta Hawks player Jeremy Lin is another ardent esports supporter. Playing DoTA growing up and later DoTA 2, he bought into the Brooklin-based esports team, Team VGJ Storm. Like his NBA breathen, Fox, Lin is also hands-on when it comes to his team.

To Lin, he wanted to be “a voice and a mentor” in helping the gamers with pressure, team dynamics, business decisions and anything more a gamer may encounter. As an avid gamer, Lin understands firsthand about esports dynamics.

“In the pro circuit, everything counts, and you’re fighting tooth and nail for every bit of progress, advancement, improvement, advantage,” Lin said. “There’s a whole mental component of figuring out how to make your craft a lifestyle and how to give yourself a better chance of success than the other person.”

Lin delves deeper, saying he wants his esports team to go further than just kills, deaths, and assists, stats that many players only focus on when assessing a game. He goes beyond and looks at his team’s efficiency and the causes that leads to victory or defeat. One aspect Lin researches is analytics, as he participated in an esports panel on analytics.

Like Fox, Lin also takes many NBA concepts and instills their lessons upon his team. “I think what we’re going to see is just another level of depth of understanding and detail in how you recruit players, how organizations are run, how teams operate, how to watch film, even travel plans and living situations,” Lin said.

From its humble beginnings to the projected $905 million juggernaut in 2018, esports has arrived. Brands and investors will continue to pour serious money into the genre, esports players will become more famous, and gaming will garner even more respect. Esports show no signs of slowing down and has now become mainstream.

It’s safe to say that esports is here to stay for good.

Author Bio

Jason Yu is an esports writer with XLive. When he’s not professing his love for gaming and esports, you’ll find him working out, talking about traveling and movies, or K-pop on his YouTube channel Popsori. If you wanna talk about esports, find him at @IAmJangta.

References:

  1. https://www.quora.com/eSports-What-are-some-ways-to-invest-in-the-e-sports-market
  2. https://www.toptal.com/finance/market-research-analysts/esports
  3. https://www.forbes.com/sites/insertcoin/2013/08/24/league-of-legends-finals-sells-out-las-staples-center-in-an-hour/#690b6c632b80
  4. http://www.espn.com/esports/story/_/id/18221739/2016-league-legends-world-championship-numbers
  5. https://onlinebusiness.syr.edu/blog/esports-to-compete-with-traditional-sports/
  6. https://medium.com/tnlmedia/100-brands-have-invested-in-esports-q3-2017-brand-tracker-9b6f5092229
  7. http://adage.com/article/news/e-sports/308447/
  8. https://www.forbes.com/sites/elaineramirez/2018/05/16/chinas-32-5b-gaming-market-is-driving-mobile-esports-to-new-heights/#7737ae626362
  9. http://www.espn.com/video/clip?id=20072623
  10. https://ftw.usatoday.com/2017/10/rick-fox-esports-echo-fox-brandini-changing-culture-fitness-workout-stigma-video-games-real-sport
  11. https://esportsobserver.com/tencent-china-investment-plan/
  12. https://www.techinasia.com/china-esports-centers
  13. https://www.sporttechie.com/jeremy-lin-brooklyn-nets-dota-esports-team-vgj/
  14. https://www.youtube.com/watch?v=JN-1vDd8arw
  15. https://www.forbes.com/sites/mattperez/2018/02/21/report-esports-to-grow-substantially-and-near-a-billion-dollar-revenues-in-2018/#7e1ca54e2b01
  16. https://www.foxsports.com/nba/story/former-nba-player-rick-fox-big-in-esports-gaming-world-020917
  17. https://newzoo.com/insights/articles/hardware-brands-take-center-stage-amid-global-gaming-boom/
  18. https://www.linkedin.com/pulse/doritos-esports-perfect-time-match-will-cutrone
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish