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Virtual Games Bring Real Opportunities

Virtual Games Bring Real Opportunities

Seoul’s World Cup Stadium is packed; 40,000 fans have been eagerly anticipating this tournament. The competitors have been training hard to make sure they’re ready. The winning team will be crowned world champions and take home $1 million in prize money. South Korea’s largest media outlets are covering the event and will be broadcasting the action to millions at home. While it sounds like your regular live sporting event, this is the scene at the 2014 League of Legends World Championships; an eSport tournament.

eSport is the competition of organized online video games. eSport can involve a variety of games but the most common are multiplayer games like League of Legends and Dota 2. Just like regular athletic competitions, teams train and strategize to become the best. Tournaments of various levels are held throughout the world with several millions in prize money to be won. eSport has been very popular in South Korea for many years now and the top competitors are even considered national celebrities. But it has only recently been gaining popularity in Europe and North America.

In 2014, there were 89 million people who regularly viewed/participated or occasionally participated in eSport. It is projected that by 2017 eSport’s fan base will grow to 145 million. North America is seen as a relatively new market for eSport with only 14 million fans, however that number is expected to grow to 21 million by 2017. A comparison of eSport’s fan base against other traditional sports properties helps to contextualize the property genre’s growing appeal. In 2014, the NHL had 94 million fans and the NFL had 151 million. 

Current Sponsors of eSport

In the early days of eSport, technology and computer companies were the most active sponsors in the eSport space. Intel has been sponsoring eSport for over ten years by promoting their gaming products and electronics giant Samsung also sponsors some of the top eSport teams. As eSport has gained in popularity, brands outside the category have increased their investments in the sport.

Some non-technology sponsors who have made eSports a growing part of their overall sponsorship portfolio include:

Coca-Cola- In 2013, Coke invested heavily in eSport sponsorship on a global level. Coke Zero partnered with the makers of League of Legends to create a new minor league series that will be a place for gamers to compete before going pro. Coke announced its new sponsorship at a sold out Staples Center in Los Angles during the League of Legends World Championship.

Nissan- Nissan promoted its new Versa Note through sponsorship of Team Curse, a top League of Legends team. Through Team Curse’s website, Nissan had fans create their own videos for a chance to win $1000 from Amazon and have their video appear in a new commercial. Nissan chose eSport due to the fact that their campaign was 100% online – a strategic fit with the tech-savvy eSport audience.

Red Bull- Red Bull hosts its own eSport events as well as it sponsors several eSport athletes, providing them with the same perks and benefits as the rest of the athletes on its roster. Red Bull provides these gamers with health tips and training facilities to prepare for their upcoming eSport competition. The “alertness and productivity” value proposition of Red Bull resonates with an audience that is prone to marathon gaming.

eSport Landscape in Canada

The current market for eSport in Canada is less mature than it is in the U.S. and other foreign markets. While eSport competitions are selling out NBA arenas in the United States, Canada is still trying to gain traction. Pro Gaming League was a Canadian eSport league created by American-run Major League Gaming. The league ran from 2007-2009 but folded due to lack of popularity. eSport has made attempts to return to Canada in one-off events. In 2012 there was a North American Star League final that took place in Mississauga. The event attracted 2,500 fans and 50,000 internet streams. Last summer the Intel Extreme Masters was held at the Toronto Convention centre. Besides Intel, other sponsors included niche computer gaming manufacturers primarily known to the eSport crowd. 

The fact that Canada’s interest in eSport is still in the early stages can provide the opportunity for a sponsor to gain a first mover advantage and be seen as a driver of eSport in Canada. Given eSports’ mass appeal in some of the regions that are Canada’s greatest sources of the new immigrants (China, South Korea, etc.) the market for gaming competitions is likely to increase as Canada becomes more diverse.

MKTG conducted proprietary research leveraging Google Consumer Surveys to understand consumer attitudes towards online video game competitions in Canada.

Question: Rate your interest in the following statement:

"I would like to attend/watch a professional video game competition where top gamers compete in video games in front of a live audience." 

MKTG’s research validates the American data where the typical eSports fans fall between the ages of 21-35. For sponsors, this demographic is becoming increasingly valuable due to the fact they are consuming less traditional television.  

Takeaways for Sponsors

Consider the medium- While the new eSport phenomenon has appeal to a growing number of consumers, it is still seen as a fringe property to many. In April of this year when ESPN 2 aired a League of Legends competition, many ESPN talents were vocally critical of the programming, claiming that the competitions didn’t belong on a sports network. This negative attention could affect the growth of the eSport into the mainstream. Corporate sponsors must consider the potential risks of associating their brand with a niche sport on a mainstream platform in the early adoption phase.  

Seek Opportunities to Compliment Sponsorship Portfolio- It is currently adventure games like League of Legends that are most actively played in eSport tournaments. However, there are still many popular eSport tournaments involving sports video games. Soccer game FIFA 15 has several eSport tournaments, providing the opportunity for brands that invested in soccer to extend their presence in the sport to the virtual world. This may serve as a natural extension opportunity in area where there is greater permission from consumers for an authentic brand to appear.  

Leverage eSport Celebrities as Ambassadors: Large Social Media Following- eSport teams have a large online following over social media. UK team Fnatic has 1.9 million likes on Facebook (greater than all but four English Premiership soccer teams). Sponsors can tap into this large and active follower base to authenticate their eSport sponsorship activity.

While it may be hard to believe that stadiums are filled with fans ready to watch a video game competition, it is a reality that many brands are no longer ignoring. In 2015, look for more sponsors to pick up their joysticks and seek to derive real and tangible value from the virtual world of video games.

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