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eSports have quickly emerged as a market leader

Escrito por Marjorie DeHey el 11/09/2019 a las 20:23:24
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(Co-founder of MediaMojos)

Marjorie DeHey

Over the past few years, eSports have quickly emerged as a market leader for the elusive 18-35 year old market segment. Traditional sporting events used to dominate the viewing habits of this demographic, but that is changing quickly.  Recently, Activision is making a bigger splash into the eSports space by commanding television-type budgets to broadcast eSports tournaments and they are using comparable metrics to “justify” spends which compare with broadcast television programming.

 

esports

(Live eSports Tournament; Photo courtesy of Geek.com)

 

Then term “eSports” (short for Electronic Sports) refers to organized competitive sports, whereby eSports athletes (players) from different teams and franchise leagues compete in multiplayer video games. Athletes require extensive training to compete in games that involve skill, strategy and focus. In 2013, the U.S. government recognized full-time League of Legends players as professional athletes. Millions of fans watch the competitions (held at a variety of live venues) in real time on streaming platforms such as Twitch (owned by Amazon), Mixer (owned by Microsoft) and YouTube.

 

Like other forms of sport, eSports consists of professional and amateur leagues. Of note, the International Olympic Committee recognized in 2017 that eSports “could be considered as a sporting activity.”  eSports are currently being considered for inclusion in the 2024 Paris Olympics.

 

According to Newzoo, by 2021, eSports will generate revenues of over $1.6B with over $1.3B coming from brand investments.  Last year, eSports revenues grew over 38% and are estimated to reach $1.65B by 2021.  Last year, Forbes Magazine noted that bankers valued League of Legends franchises at over $50M and Overwatch franchises between $60M-$80M.  Along with sponsorship and event revenues, media rights have been growing and are projected to be more than $320M by 2021.  This foray into linear media is showing the strength of eSports in capturing the key viewing audience of 18-35 year olds.

 

One of the reasons for this huge growth is advances in metricizing eSports. Previously, it had been challenging to truly measure eSports viewership in comparison to traditional sports on TV.  Recently, some of the largest eSports developers have partnered with analytics guru Nielsen to utilize a metric which allows for accurate comparisons between traditional sports and eSports -  AMA, average minute audience.  This formula takes the total minutes watched and divides it by the total minutes broadcast and is comparable to the formula that traditional broadcasters use - thus allowing for a more accurate comparison of the value of traditional broadcast TV versus eSports broadcasts. Using AMA, Nielsen has shown that eSports viewership is growing at a faster rate than traditional sports such as basketball and hockey.  

 

Previously, eSports were measured by concurrent views to show the size of its audience and this metric was often inaccurate as the numbers were often self-reported by the eSports developer and left marketers and brands unsure of the true advertising value of an eSports event or tournament. Utilizing AMA, top brand sponsors such as Coca-Cola and Toyota (who support Activision Blizzard’s Overwatch League) and Mastercard and Honda (who support Riot Game’s League of Legends) can better measure their sponsorship dollars.

 

According to Kasra Jafroodi, Strategy and Analytics Lead at Activision Blizzard eSports, there is a need for brands and agencies to be able to directly compare eSports with “sponsorship/marketing” investment in traditional sports – such comparison allow brands/agencies “to quickly understand how things are performing, and, when your story is positive, these numbers are even more valuable.” 

 

Beyond the sheer increase in eyeballs watching eSports, its dominance in the highly sought after 18-35 year old demographic, makes eSports a wise investment for smart brand targeting these consumers.  According to Activision Blizzard, the numbers are impressive as more than 300M people play Activision Blizzard games each month and they spend around 50 minutes per day on its games.  Last year, over 500M people around the globe watched live eSports tournaments and these numbers are making traditional broadcasters, and sports organizations, take notice.

 

Which brings us back to potential inclusion in the Olympics which is also chasing the 18-35 year old demographic.  Like so many other events, the Olympics have seen a decline in audience in recent years and in an attempt to regain viewership, the International Olympic Committee (IOC) has added 5 new sports to the 2020 Summer Olympics - baseball/softball, karate, sport climbing, surfing and skateboarding.

 

With the rise of eSports internationally and with an effective viewership measurement, it seems the IOC is seriously looking to make the Games relevant to a new generation. Let us know what you think about the rise of eSports - and… should eSports be included in the Olympics?