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The unstoppable development of technology has led to the growth and development of new activities and professions, which in the past would have been unthinkable.
One
of them, which is the subject of this reading, would be the birth of
e-sports, a discipline that was born in the seventies, but which has taken
on a brutal importance in recent years.
E-sports are video game
competitions, usually of a multiplayer nature, in which professional players
compete. The competitive environment has always been in the DNA of video games,
but since the year 2000, it has undergone a great increase, both in terms of
participation and audience. This increase has not gone unnoticed, so the
economic results have not taken long to arrive.
The
profile of the participants in this world of electronic games is mostly male,
with 85% compared to 15% of women. The vast majority of this audience is
concentrated between 15 and 35 years of age. This age range has been key to
their growth, as they were born with technology and are considered
"digital natives". This has led to the growth of this discipline, due
to the easy access of this group to the Internet.
In the 1990s, video games benefited from the development of Internet connections. Already in this decade, the first big tournaments started, such as the Nntendo World Championship (1990), based in the United States, which was held again 4 years later due to its great success. Beginning in 2000, the discipline began to become more professional when South Korea began licensing professional players.
One
of the video games with the highest participation in E -sports was Dota2,
a team-based combat game in the "Online Battle Arena" genre. This
game's tournament, called "The International", boasts the largest
prize pool, reaching an astronomical $40 million in 2021.
This
doughy world began to accumulate a large number of fans, reaching 72 million in
2013. This figure did not go unnoticed by companies, which began to notice the
great attraction of E-sports, detecting new business opportunities.
The
financial results soon exploded, reaching $325M in 2015. Most of this revenue
was generated from competitions in the three biggest E-sports games, Dota2,
League of Legends and Counter Strike: Global Offensive. All of these games
were played in teams
Year
on year, turnover increased, reaching a record $500M in sales in 2017. This
triggered the entry of economics and marketing, due to increased sponsorship
and increased media coverage.
In 2018 and 2019, E-sports managed to surpass the billion-dollar mark, suggesting that this competition is here to stay. These figures are staggering, given their rapid development, but where do they come from? Well, let me explain this:
1. The majority of revenue is generated through
direct advertising, mainly from advertisements and sponsorships. The
marketing departments of large companies have managed to detect the importance
of this new form of promotion.
This
sponsorship can be very varied, as you can sponsor anything from a
competitive event, to professional players and even e-sports teams. These teams
are key players in this discipline.
Their
development has reached the level of football, the king of sports. Their organisation
is very similar, since E-sports also sign players, design kits and have support
teams, such as physical trainers or coaches. Two of the most important teams
are:
Ø Faze Clan: This is one of the most mediatic, reaching 15 million followers on their social networks. It is estimated to be worth $350 million.
Ø Team Liquid: This team, born from the merger with Team Curse, is a specialist in
the game "League of Legends". It is worth more than 400M
dollars.
Another
important part would be the players, who are the protagonists of these
tournaments. They are all backed by their teams, and they make astonishing
profits. Here are 3 of them:
- Ø Johan “N0tail” Sundstein: This player has the highest earnings in history, being a two-time champion of the game Dota2, has brought him a total of 6.8M dollars.
- Ø Kyle “Bugha” Giersdorf: This professional Fortnite player managed to win the Fortnite World Cup, earning a total of 3 million dollars.
- Ø Lee “Faker” Sang-hyeok: One of the greatest players in history, winning three League of Legends world championships for a total of $1.3 million.
2. The second largest source of revenue for e-sports is media rights and licensing fees, related to live broadcasts of these competitions, as well as the hosting of these competitions.
3. The third main source of income would be the sale of tickets to events and merchandising. The growth of these competitions has led to these competitions being brought to the on-site format. This requires a huge amount of event organisation. One such event was the Fortnite World Cup, which was attended by 24,000 people, as well as a total of 2.5 million people streaming.
In terms of merchandising, it is similar to football again, as they sell team shirts with their favourite player on them, as well as flags, scarves and other items specific to the game.
E-sports and
Marketing
As
I said at the beginning, technological development allows companies to develop
their activity in a more efficient way. For this, investment in E-sports is an efficient
strategy.
The
effectiveness of this type of promotion lies in the direct impact to which your
brand is exposed. For example, sponsoring a streaming event allows your brand
to be seen directly by the entire audience. This impact can increase as the
sponsorship increases, even to the point of organising such a competition
around your brand.
Many
brands have taken positions on E-sports. Here are several examples, from the
lowest to the highest degree of promotion:
1. Heretics X San Miguel: The first would be a sponsorship. The beer
manufacturer San Miguel decides to sponsor the Spanish E-sports club Heretics.
Through this, the two brands go hand in hand, and the brewery takes up a space
in the club's kit.
2. Vodafone Giants: The phone giant is betting on E-sports, going
so far as to found its own e-sports club. This action will allow Vodafone to be
present in this world.
In short, when planning a company's strategy,
the marketing department must take this discipline into account, as it is one
of the forms of advertising with the greatest impact today, due to the
popularity it generates and its easy accessibility.
Do you think this discipline will continue to
grow? Is this the future of marketing and advertising? I await your comments on
this topic.
https://es.wikipedia.org/wiki/Deportes_electr%C3%B3nicos
https://es.wikipedia.org/wiki/Dota_2
https://www.marca.com/esports/2019/12/27/5e063727e2704e7e8b8b4594.html
https://www.revistagq.com/noticias/articulo/equipos-esports-mas-dinero-del-mundo
https://lol.fandom.com/wiki/Team_Liquid
Comentarios
In marketing terms, I think that San Miguel has been very quick and clever when deciding to sponsor the Spanish E-sports team Heretics, because it is probably going to gain a lot of popularity and all thanks to detecting a commercial opportunity to get to the target in a more friendly way; by, for example, appearing in the team's equipment.
The main idea that this blog conveys is the rapid evolution that video games have undergone. This evolution has gone hand in hand with the evolution of technologies. Video game competitions started several years ago but it has not been until 15 years ago where overwhelming amounts of money were achieved annually, as the article comments many companies have already directed their strategies towards these new technologies and Esports. In my opinion it is a very good idea for companies to look at these new trends as they are the future. These new technologies are attracting more and more young people and have been keeping their loyal followers for many years. Therefore, I believe that in the future, video games will no longer be aimed only at young people, but will have no age limits.