A Look Into The World Of Esports, And Why Heads Are Turning.
We all know that games have been an integral part of our childhoods, from Super Mario and Sonic the Hedgehog to Dark Souls and the likes of the Tekken franchise that provided us endless entertainment growing up. From consoles and PC’s to the recent times of what seems to be limitless technology, virtual reality, mixed reality and holograms are now capturing gamers across the globe.
But within this highly entertaining industry a niche was developed, one like no other, one that soon to be will no longer be known by that insignificant term, we welcome the birth of esports. We’ve always looked at gaming as a form of entertainment, never to be taken seriously, an activity specifically made for fun and enjoyment, but here’s how that notion has evolved.
Esports, a term used for coordinated multiplayer video game tournaments or better understood as electronic sports. Alike traditional sports the similarities are profound, from having professional athletes, a multitude of game options and an audience – we start at this point, to uncover the reason to why esports is unavoidable.
The once called “bedroom gamers” and “geeks” of our current and past generations have now flourished into professional esports athletes and have put a new meaning to the term “gaming”, with acquired skill sets we see these athletes compete for prize pools greater than what we see in the NBA, Wimbledon Open and even football.
Diving deeper into the esports ecosystem we see that both traditional and esports athletes follow a similar if not mirror image model, from sponsorships, acquisitions, payrolls and prize pool divisions. Of course the value and monetization channels of this model varies based on the maturity of the scene in each country and/or region, many have stated that growth is imminent if not on a steep vertical ascend.
But where does all the monies come from? We now look at two aspects of why and how the esports industry is climbing at such a swift pace.
Viewership in the millions
With esports tournaments like Valve’s “The International” Dota 2 Tournament, a scale of which is similar if not bigger than the Formula One – Grand Prix and offering an ever growing prize pool which has now risen to USD 20,770,460 in 2016, it is only natural to see a hike in viewership numbers. To put things into context, if the general population of the world saw anything with a prize pool of USD 20 million, heads would unnatural turn to a point it might snap some necks. The world is watching, with a total of 6 billion gamers in the world and over 660 million of them willing to pay to watch esports content, one doesn’t need to number crunch to know that these numbers exceed any form of viewership on cable TV and IPTV (or better known as “Video on Demand”). Using “The International” as an example, the biggest Dota 2 event of the year garnered an estimated 142 million views
Caption: The International 6, a pack Key Arena in Seattle only shows a positive future for the world of esports.
These numbers are astounding but now we ponder on where all this generated monies come from. Which brings me to my second point.
Where is that Leprechaun and his pot of gold?
With viewership numbers at an all-time high esports has gained immense popularity with many companies realizing the potential of the growing industry. To marketers and advertisers opportunity now presents itself and gamers now being in the predominant age range of 16 – 35 Y.O it only makes sense to explore this as a new marketing avenue to reach our ever so changing target demographic. Sponsorship, the first on the roadmap of many more marketing execution milestones starts pouring in to gain branding and awareness. And this is only just the beginning of the immense growth we are about to see in this segment of the industry.
Perhaps 2 pots of gold can be found? With micro transactions now being the main source of income for game publishers, we see an increase of community growth, with constant engagements and item goodies to keep both casual and professional gamers alike excited for what more is to come. Some local statistics here to keep the numbers more manageable - based on the statistics on Newzoo, of the 14.9 million gamers in Malaysia, 7.8 million spend money on games, a payer-to-player ratio of 52%, which is above average for Southeast Asia. The average annual spend per payer of $37.31 (MYR 160.43) is also above the regional average. Total revenues will grow towards 2018 with a CAGR of +20.9%. In a nutshell, Malaysians are more than ready to spend tons of cash on the games they love, now imagine the numbers on a global scale? The opportunity for publishers and developers to pump a fraction of these monies back into esports and the community as “growth” or “marketing” spend is exponential.
To paint a clearer picture of what the industry has become and perhaps, its future. The prominence of esports has led multinational corporations and citizens across the globe to turn their heads and start to embrace the change that is already in progress, gone where the days of gaming being taboo or an activity for the lazy, the birth of a new main stream genre is here, and it’s already shining.
Till next time at RBEZ,
Red Bull, Charge Ahead!