The esports industry has garnered significant growth over the last couple of years, with both COVID-19 and the lockdown accelerating and boosting consumer and commercial interest globally. Meanwhile, betting has significantly increased its interest around esports, which has helped sponsors ease their way into this ever-growing market.
Moderating duties at the ‘Perfect Partners’ panel on day two of Betting on Sports Europe – Digital, Tatiana Tacca, Director of Esports at Monument Worldwide, shared that the esports audience is mainly millennials, 30% female, with a higher than average household income. They also have high spending habits and they invest around 14 hours a week playing or watching esports. According to Tacca, this is a very valuable and engaged audience, but sometimes “there might be some assumptions or stereotypes about this space as a whole.”
Julian Tan, Head of Growth & F1 Esports at Formula 1, said that they’ve been “spearheading a lot of the esports initiatives within the sport since 2017”, and as a result of the lockdown and the competitions shutting down, they “used esports in an innovative way to continue rising virtually and bring racing to our fans at a time when the cars and wheels couldn’t hit the tarmac.”
Also taking part in the panel sponsored by Neosurf, CEO of PixelBet Eirik Kristiansen said that “there’s no industry that has seen a more parabolic growth than esports. Over the past 4 or 5 years, it has basically quintupled and I don’t think that’s gonna change anytime soon. The diversity of the revenue opportunities is one of the reasons why because it’s so immense and it’s reflected through the innovative structure and the extremely loyal fanbase that esports has, which is also ever-growing.”
Kristiansen explained that all these verticals within esports have created a lot of value through franchising, media rights, sponsorship, advertising and betting. “It’s the combination between innovation and technology as well as parabolic growth, everybody wants to jump on the esports bandwagon because it’s a trend that has already left the station and it’s not gonna stop anytime soon. When you look at all the verticals within esports, everything is growing year-on-year, and it’s growing more than anything else, so it’s a really exciting place to be,” he said.
Tan echoed these thoughts and added that more and more people are spending time on video gaming, especially accelerated by the impact that COVID-19 has had in consumer behavior. “People are spending more time home, and as a result of that more and more people are entertaining themselves through video gaming and esports. You only have to look at the time that people below the age of 35 are spending on esports and video gaming to know that there is a generational shift to come.”
Particularly this year, esports has had more exposure than ever before, there have been bigger opportunities for brands to start exploring this space, which is a really positive and healthy thing to further optimize the opportunities within the space of esports, Tan said. Additionally, he revealed that they’ve experienced a 1000% month-on-month growth in streaming hours in the Formula 1 games during lockdown.
In terms of how their organizations have changed in recent months, Kristiansen said that they’ve focused on creating a good experience for the end-user and therefore have improved the streaming aspect, making it easier to watch their favourite game while also making it seamless for them to bet on it.
“Because of the fact that it’s a young audience, things need to happen rapidly. We focused on fast payments, on fast and seamless backend work and we also worked with our partners to deliver more in-play and live odds so everything is more real-time,” he added.
Adrian Figallo, CFO & Co-founder or World Pro Racing, said that expanding into esports and betting has been something that they’ve been exploring in the last couple of years. “We’re having high levels of content so we’ve reached our goal already. The experience is already there and the next step is to collect data because it’s something fundamental to offer to the betting companies so they can make their odds. So hopefully next year we’ll manage to get our tournaments into the betting side of esports, which is the future and has been growing exponentially throughout the last few months.”
Serge Vardayan, CEO & Founder of WIN.GG said that the industry has also evolved in terms of integrity, as multiple organizations have focused on that part of the business. “Betting companies have also joined the self-governing bodies which tells me that everybody understands the importance of valuing integrity. It’s very pleasing for us to see this evolve,” he commented.
The moderator talked about understanding the opportunities for brand sponsorship when it relates to the intersection between betting and esports: “There are a lot of brands increasing their spending in the esports space and brands that historically have a great way of having betting as a central role in the sponsorships. Buffalo Wild Wings is a great example of that, they are now the official bar of esports and they’ve done a lot of work around sports betting.”
Steven Salz, CEO & Co-Founder of Rivalry, said that “most brands that are betting brands like Rivalry do a lot of marketing branding around esports betting. But a majority of non-corporate brands are still going to be a little bit cautious about how they choose to promote and interact with betting brands combined with their own and pushing towards that, but we’re seeing that betting is becoming one of the largest sponsorship verticals for esports teams and organizations.”
As an example, Salz highlighted that this is a much different generation that they’re marketing so the way they engage with them has to be different. “You have to engage in sponsorship on a much deeper level, you have to be super engaged with the community. The fans of this sport being younger do see through that typical mad man mentality and approach to sponsorship that might be still installed in traditional sports but in esports doesn’t really work.
“I think the creativity level has to be different, how you engage on social media has to be very different, but there’s definitely a sense of a compounding of opportunities that are coming for brands, esports and betting, so it’s directionally heading there and it’s exciting for us.”
Tacca added: “There’s always been excitement about esports because it’s growing and evolving and brands have to figure things out in real-time. Having a more solidified product is a key component to that.”
The Rivalry CEO said: “The brand sponsorship level, particularly being on the jerseys, is like the very top layer, I don’t think it’s super successful in esports. In our experience, sponsoring a team is great but it’s actually the individual activations that you do with the individual players that really move the needle because they have a one on one relationship.
“If you look at viewed hours per year on platforms like Youtube and Twitch, a low percentage is from esports, it’s all digital content creating, the esports fans are also watching content creators, most of them are engaging with them. So one of our bigger acquisition channels is content creators, they’re all esports fans as well, the one on one relationship resonates well with them.
“Understanding how to tap into that network is critical to conversion, it’s much more than the traditional sports advertising where you wanna be the main logo. That kind of thing is okay in esports, but you have to go much deeper to be successful.”
Tacca explained that “esports fans like to see behind the curtain”, that those activations are crucial and that’s how the value of a brand can be delivered and they can play their role in esports. “Although esports and content creators are in different fields, they’re both incredibly related and both have offered different values and opportunities.”