Category Archives: eSports Gaming

The Future of eSports

esport

I’m really excited to be here today to talk about eSports and represent Activision Blizzard Media Networks. You know in the simplest terms, eSports is just competitive gameplay. It’s me playing you in ‘Call of Duty’ or ‘Counter-Strike,’ whatever your favorite game is and just like football or basketball, there’s professionals who do this. There’s professional broadcast with professional broadcasters announcing the games, there’s lots and lots of amateurs now trying to make it into the big leagues and most importantly there’s millions of passionate fans who really love and engage with this as a sport, as a content type and are really focused on the personalities behind the sport that is striving forward.

And one of the things that we noticed very early on is how do you know this is a sport not just people at me pretty good at video games? The skill gap between top professional players in eSport is it is very similar to me trying to play basketball against LeBron James. It’s just, the skill gap is enormous and a lot of that has to do with, with NA talent, but it’s also a lot of hard work.Right now, the sport globally is over a hundred million uniques v iewers. So, we’re talking about a sport that in aggregate is bigger than the NBA in terms of viewership. A big part of what we’re trying to do at Activision Blizzard Media Networks is really celebrate these players and bring them to the forefront and tell those stories behind what it is that they’re doing. If you think about traditional sports, it’s it’s much less for most fans about the technicalities of the game or really understand the rules, or how different defenses and offences work.

It’s really all about the personalities and storylines and that’s what we’re bringing to the forefront where we sold out Nationwide Arena with 10,000 people paying fifty to a hundred and fifty dollars for tickets and literally tens of millions of people tuning in over the course of the weekend. 10,000 live spectators like I said, 71 million video views and 45 million hours viewed over the course of the six days globally. So, it was broadcast in 15 different languages across a variety of digital platforms and 0 television. All live over the top digital broadcasting to you the whole world. What we really want to do those take this to the next level and that means not just getting ‘Counter-Strike’ fans or ‘Call of Duty’ fans involved in eSports, but getting mainstream sports fans involved in this. And I’m gonna go a little bit deeper into why we think Activision Blizzard Media Networks is uniquely positioned to do that.

So, in a global basis, the aggregate eSports audience is a little bit bigger than major league baseball and just under the NBA. That kind of scale is unbelievable and it’s getting bigger. Their projections are that by next year I’ll be over 300 million viewers globally.

You know, you would probably expect these people who are super passionate fans are little bit more interested, but there are actually a lot more interested in this stuff. They are, they spent two times as much gaming peripherals and all sorts of gaming equipment. The fans, not the players. Just the fans of eSports. They also spent thirty percent more on gaming hardware and software.

So, they’re buying more games and they’re buying more gaming hardware. The four major pro sports leagues in the US do about 29 billion dollars in revenue a year and against 1.4 billion viewers. So, $21 per viewer. So, if you think of it as like a ARPU calculation. $21 in ARPU annually against traditional sports. ESports is a 100 million viewers and 200 million in revenue, so we’re only at $2.

We’re at the very early stage of this curve. Using this kind of pretty conservative projections we think the growth of the audience and moderate growth in ARPU will put the eSports industry at about a billion dollars in revenue by 2018. Not only is it big and scaling, but it’s growing quickly and it’s starting to mature as a business. What we’re really, all we’re doing is following traditional sports formulas to present a new kind of athlete to the world. But they are engaging, they’re really interesting people and I think if we tell these stories the right way, it won’t just be the super hardcore fans that into this, it will be people like you. And that’s what’s really exciting for us.

We brought eSports to the X Games with ESPN for the first time at the Austin X Games and an interesting thing happened. The day before the event started I was flying Austin and the guy that runs the X Games for ESPN called me and he said ‘what the hell did you guys do to our app?’ and i said ‘I don’t know what you’re talking about, what do you mean? ‘..He said, ‘open the app,’ and they had produced app just for the event and that had kind of the map and everything in it and the core feature was you could like or favorite all of your favorite athlete, so they had every single athlete in the X Games in this app. People were liking him like crazy, but you have people like Travis Pastrana, Tony Hawk, big action sports athletes who get a lot of TV time.

Some are in the Olympics, it’s a big deal. Anyway, the most favorite athletes in the ESPN X Games app numbers were 1- 26 were MLG Pro gamers and Travis was 27. These guys are very accessible, they’re a new kind of athlete, they are digital first, over the top, social media trained athlete. Projecting to you guys what we’re trying to do at Activision Media Networks, which is to bring the storylines and the personalities to the forefront and create kind of big safe and scale of a way for brands to attach so that we can drive more investment into into the industry and bring the whole thing for it and then also provide a lot more value to our players and fans. We’ve come a long way, I mean what’s the tipping point?

When did this flood gate suddenly open? So, we use, at Twitch we use the analogy of eSports is a lot like poker, where poker had a large community people. People have been playing texas holdem for hundreds of years, or over a hundred years.

Everybody knew it, people have played it in back room bars and in back rooms and so forth and casinos, but so it’s own built in community. They created a technology, the pocket cam, that allowed people to watch poker from the outside and make the game interesting, so a technological change and then distribution. So, we started to see with the pocket cam, ESPN and Fox Sports started to broadcast poker. So, with eSports, you know, eSports has been popular for years and years and years you talked to Mike, some of you guys have been around for 10 plus years in the eSports space, so it’s been existing. It was the existence of the developers created a spectator mode in the games that made it interesting for people not playing the game to watch it and then this little thing called Justin TV which is what which came out of created an opportunity where it could these matches could be broadcast globally, digitally all across the world so the matches now had viewership. So, if you take the poker analogy and apply it to eSports it is very similar in that again, probably a two, two and a half years ago is where it really took off.

You know, one of the most interesting things about eSports is, imagine if you’re a basketball fan or football fan and you can watch Russell Wilson practice for six hours privately at home and then and then you know go pick up a football and play, that’s what you doing with eSports. You’re watching your favorite you know player in the world practice at home and their game. That’s what your kids are doing in their rooms for hours at a time. They’re watching their favorite players playing then they don’t play the game, it’s crazy.

But, it is also important to understand that when you see it in aggregate number of eSports whether it be revenue or whether it be viewership, what you’re really talking about is that being spread across multiple games right? And when we talk multiple, I would say we’re at 10 games that consider themselves eSports? That have competitive sporting analysis or games in tournaments. And 10 more waiting in the wings. Yea, and the Gold Rush, the Gold Rush is coming as far as from the publisher perspective, so you really need to understand that, that number is broken down by game whether that’s ‘League of Legends,’ ‘Hearthstone,’ ‘Dota Starcraft,’ ‘Halo,’ ‘Call of Duty,’ ‘Counter-Strike,’ all those different things.

So, that’s really important that the apples to apples would actually be all sports against all eSports or NBA vs League of Legends would be would be fair consumption for that perspective. Yea, with OpTic Gaming in particular products facilitated the relationship with Pepsi. I don’t think it was a real big surprise to anyone that Pepsi would get involved with eSports. The real big story there was that they launched a brand new product called Brisk Mate on the backs of any sports team. I really applaud these brands because they are working with us to back away from some of those traditional metrics that everyone in this room is held to and they’re providing somewhat of a creative latitude to approach the space differently than they do traditional marketing.

You mentioned, now they’re not really look at the traditional metrics, but they still need to evaluate whether this number one, alliance with their brand image and number two what kind of returns are getting out of these. Hhow are they doing that calculation? I mean can you share anything insight? Yeah, I mean there’s definitely a secret sauce. Unfortunately, there’s a ton of metrics that the industry holds all of their vendors and partners to.

My attitude is like ‘look just because something can be measured doesn’t mean you have to measure it.’ I actually like the industry as a whole has gotten kind of away from that visceral approach like ‘hey, does it just feel right?’ So, we understand that their traditional metrics that need to be accountable or that need to be folded into the space, but simultaneously you know, what Andy just mentioned is when we have that kind of creative latitude we are now starting to Explore what does the social currency look like rate like? Right? Like how do we start to redefine how you actually evaluate the success of the program?

And there are a lot of social functionality is behind this which you don’t necessarily have to measure within the traditional sense, but it absolutely has an impact on your ROI and it’s something you can see almost immediately which we have seen. And what you can’t do is just say I want to I want to market to eSports. I mean that it’s just it’s just too generic. ESports as an entity would be like’ I want to touch sports consumers ,’ ‘I want to hit people have mobile phones.’ And there’s a very close relationship between content creators and brands in the space. Your very well aware of of the relationship and certainly with influencer marketing brands are maybe a half step removed from from what that content is.

It’s it’s a little bit more akin to that, its understanding that you know the way to your brand is perceived within the space may not be entirely against your defined brand image, so you know, have again the creativity in the sort of foresight, the bravery to say okay, we’re looking at something different, maybe there’s a different way to approach this or maybe you shouldnt be there at all. Maybe it’s not the space for you. You know, maybe if you are a feminine forward fashion line you should not be advertising on NFL Sunday. My piece of advice would be for anyone in this room or anyone looking to get into this space is actually don’t get hung up about the particular game. It’s really the lifestyle of these guys right?

Whether it’s individuals or the community it’s it’s the lifestyle aspect that’s very appealing for a brand marketers. So, for us we actually see the Andy’s point earlier like they’re definitely subcultures within eSports and where does your brand align. There’s what we call the I would call the “typical geek culture,” right? Like they’re certain games where these guys their entire lifestyle actually revolves around the game.

There is the bro-culture where there where the game is just a part of their lifestyle. So, you know some of it is somewhat stereotypical. Like that bro-culture, they don’t plan their entire life around the game, the game is just a natural extension of what they’re doing versus the other culture where their entire lifestyle actually does revolve around the game and their whole social structure. But again, don’t get too hung up in the games, try to pay more attention to the lifestyle. We still have a lot of challenges, right? I mean what are some of the key challenges that are facing the industry?

It’s, it’s how do you get in like what sport do I look at? What game do I look at? How do I understand what’s happening on the screen? You know, if you look at if you look at the traditional sports industry where it’s more mature, you know you watch NFL they, tell you exactly what’s happening. You don’t have to know a whole lot about NFL to understand what’s happening on the field because they will walk you through it. ESports traditionally up to this point has played very much to its core.

You play the game, you watch the game. How do you get beyond that? How do you bring in new viewers?

How do you create understanding where there isn’t understanding. If you can create that sort of understanding and open things up and welcome more people into the tent, then you sort of a wide and out the opportunity. Then you really start to see viewer growth. Then you can connect even more deeply to this sort of emotional storytelling we saw Mike’s team at MLG put together some great stuff, you know, you can connect to those things unemotional level. That’s great, that’s hooking me in, but if you don’t tell the rest of the story within the game or the presentation of the game or the presentation of the sport, you’re gonna dip right out and you’re not going to create a relationship with the game or a brand or anything around it and they’ll go find something else it’s a little easier to understand. So can you create on text I think that’s a huge, huge open opportunity right now.