Brands and sponsors have much to gain from entering the booming eSports business—but only if they take the right approach.
With Newzoo forecasting over 335 million global eSports fans and revenues of more than $1 billion by 2017, it’s a huge audience to tap into. But Ed Zhao, business analyst at video game research and consulting firm EEDAR, warns that the average eSports consumer is wary of sponsorships and often see them as “selling out,” so brands and sponsors have to be careful how they position themselves.
“Quality is important in selling products to eSports fans getting any type of market share,” Zhao says. “We asked PC gamers to rate brands and Logitech G and Razer topped their list because the products are already good, so they’re not considered sellouts with this audience. Those two brands also correlate to being the two most successful companies in the PC gaming market today.”
The PC gaming market accounted for $3.6 billion in revenue in 2014, according to EEDAR. Patrick Walker, vice president of insights and analytics at EEDAR, says that eSports viewers spent twice as much money on peripherals like gaming keyboards, mice, and controllers than PC gamers who don’t participate in eSports. They also spent one-third more on their PC gaming system than non-eSports PC gamers.
“Just putting an ad out there won’t work for millennials, who make up the majority of eSports fans,” Zhao says. “Companies have to think outside of the box with different ways of marketing. “If you’re a new player in the market going up against a Coke, your voice could be lost if you don’t directly incorporate eSports elements into your plan. You should try to do something new. One of the easiest ways to speak to this market is to take current or ex pro gamers and work with them present it.”
According to Zhao, there are three opportunities for companies in eSports today: Ads for things eSports fans are already interested in, hosting eSports coverage or events, and entertainment.
For instance, HBO advertised Season 4 of Game of Thrones in-game on League of Legends last year by showing exclusive clips before the show launched. Coca-Cola (KO) sponsored live coverage of the League of Legends Mid Season Invitational in movie theaters around the world, and Red Bull has been hosting its own eSports tournaments. And PC gaming memory and peripheral Kingston HyperX created a series of humorous ads with pro gamers pretending to work at the company—similar to the ESPN SportsCenter commercials with pro athletes.
Zhao points to Asia, where eSports originated and there’s a more widespread acceptance of it, as the future for North America. Big Internet companies like South Korea’s SK Telecom sponsor teams as well as entire seasons of the Global StarCraft II League (GSL).
“We’re at least three to four years away from that in the U.S., but we’re heading in that direction,” Zhao says. “Viewership hasn’t changed since Valve added in-game ads to Dota 2. We’re slowly transitioning to where sponsorships and ads are accepted in eSports just like NFL sponsors and ads are in traditional sports.”