Interviews, insight & analysis on digital media & marketing

It’s time to take esports seriously

By Brett Phipps, Senior Editor at independent creative agency Waste

With more viewers than the MLB and NBA, this “niche” is taking over

It’s fair to assume that the general public still views esports – the competitive realm of video games in which players and teams compete for cash – as a niche market in which only the most dedicated gamers venture. But with over $973.9 million in forecasted revenue in 2020 , and projected higher viewerships than both the MLB and NBA, it’s time to take this niche into the mainstream.

Esports has enjoyed rapid and continuous growth in recent years. With an estimated global audience of 395m in 2018, that number increased over 25% to 495m in 2020. Projections have this expansion continuing to an eye-watering 646m in 2023 , an increase of more than 30% over the next three years.

The deeper you dive into the data, the more positives there are. The ratio of dedicated fans to casuals is promising. Market segregation shows a near 50:50 split between enthusiast and casual viewers (45:55 in 2020, projected to remain stable into 2023). What does this mean? It means the audience is committed, predictable, and most importantly for your brand, engaged.

It can be scary to dip your toe into a new market without first understanding the landscape, so what does spend actually look like? Well, in 2020, three quarters of the $973.9 million revenue was media rights and sponsorships. This slice of the pie is expected to grow to $1.2B in its own right by 2023.

Big name brands have already thrown their weight (and wallets) behind esports. Domino’s and Coca-Cola teamed up for “esports Moments” – an activation which encouraged friends to get together to watch tournaments – while Louis Vuitton launched a League of Legends clothing line and sponsored the World Championships.

Seeing big names jump in continues to further esports’ broader cause of achieving legitimacy within the wider cultural space. What was once “not a real sport” is now very much being treated like one.

There’s already a lot of cash in esports, but there are still plenty of opportunities to invest. In 2019, over 885 major esports events took place, awarding around $167.4m in prize money. Naturally, events in 2020 have been disrupted due to the ongoing pandemic. But where other sports had to pause completely, esports adapted and thrived.

“Esports has been able to continue while traditional sport has not because the playing field is virtual and can be replicated online,” Mike Sepso, co-founder and CEO of Vindex, an esports infrastructure platform, said in an interview with WeForum.

Despite this silver lining, much like other events-based industries, Covid has still made its mark. Many events were cancelled, others moved their tournaments online, putting systems in place to ensure a level playing field for all participants (you wouldn’t want the internet to cut out during the final, would you?).

Newzoo also twice downgraded its annual forecast for projections of yearly revenue within esports. Where pre-pandemic forecasts predicted $1.1 billion, this shrunk to $973.9 million come July. However, this is still a 2.45% increase from the $950.6 million in 2019. Projections for 2021 and beyond also remained stable.

The key takeaway is that, despite Covid-19, the industry continues to go from strength to strength. Newzoo still predicts astronomical growth into 2023, making very clear in its updated figures that, despite the downgrade, the demand is still there, as are the number of organisations providing supply.

But, if you want to join the party, you’ve got to have something to say. The International Advertising Association (IAA) summed it up most succinctly: “Success in esports doesn’t depend on budget, it depends on authenticity and consistency.” Brands which simply look to capitalise on a moment will be quickly found out, as Aldi will attest.

Aldi’s “Teatime Takedown” invited parents to recruit a squad of professional gamers to “take down” their kids in online games, in order for their children to free up time for dinner. The activation was quickly pulled following backlash, labelled ‘the worst esports marketing campaign of all time’.

So, moving forward, the most important thing that a brand can have is an understanding of the audience they’re targeting. Communicate with them in a way they’re prepared to be spoken to, and by people they can identify with.

2021 will be an interesting year for many industries as they look to bounce back from the pandemic, but esports is already in a strong position to do so ahead of others.

With all the facts and figures in place, it’s clear that esports should be on the mind of any brand looking to grow its audience. If done correctly, the ROI can be incredible.