The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
Esports is the competitive side to online gaming for spectators to follow, usually played by professional gamers. ESI London, organised by Esports Insider, took place 16-17 September 2019 at Twickenham Stadium as a networking event for those interested and involved in the esports industry.
The event’s goal was to help participants understand and discuss the current situation and future possibilities of the industry, mostly focused on the European market. Throughout the two days there featured a number of panel conversations with guest speakers covering some of the important topics facing the market today, ranging from the involvement of traditional sports brands with esports, to how esports can affect the athletes themselves.
A main focus of the event for the European market seemed to be about unity. The industry is relatively new and growing, which leads to much unprecedented attention, not all of which is positive, such as the negative effects gaming may have on developing minds and the number of esports teams (aka brands) which have emerged and disappeared within one or two years.
Therefore, the industry needs transparency and collaboration between competitors to focus on the good of the industry long-term rather than individual financial gain. The rapid growth witnessed in recent years, which is expected to continue, is incredibly exciting, but can also be damaging for those involved as there are currently no standardised methods of data gathering and publishing.
This has reportedly become problematic already as there is a tendency to compile and group data points which can set the wrong image and mislead investors into unrealistically high expectations. As a result of inaccurate data, the industry has witnessed many esports brands come into the market and crumble within the first year or two.
Reaching a healthy method of data delivery without the need for combining numbers to make the industry appear more exciting is part of a larger point, and the main comment throughout the event. At this point in time the esports industry must undergo a professionalisation journey, which is why there is a call for cooperation between all aspects of the industry to help develop the infrastructure and guidelines required for long-term sustainability. Some comparisons for this were drawn between two of the largest esports regions in the world, China and North America.
China has the most established esports presence of any region. This was partly attributed to the popularity of internet cafés, as explained by guest speaker Xuan Li of LGD Gaming, to which gamers can go and play with their friends, offering a social environment and helping these games become more mainstream than niche in the region. The high level of involvement by teens in these social hubs helped the region get a head start on esports, as professionalism of athletes began much earlier than elsewhere in the world. This led to brands’ formation and developing strict training schedules from the outset, attracting the best talent.
North America has also been developing quickly in more recent years, although it has done so in a different manner to China due to the lack of necessity of internet cafés in the region as most gamers will own their own gaming devices. The increasing media attention and the obsession to reach younger generations has led to large numbers of investments being made with high profile personalities such as Steve Aoki or Drakeetting involved. Panel speaker Spike Laurie from Hiro Capital referred the capital investment situation in the US as “almost out of control”.
The European market is playing catch up against these two regions in terms of industry acceptance and development as a recognised professional industry. This region’s objectives mentioned through-out the conference referred back to focusing on nailing the grassroots of the esports industry. Commercial consultant David Fenlon presented a research study he’d conducted on this, from the get-go as to establishing a long-term narrative industry wide that can help all involved to grow within the markets.
It is widely understood that passion or video games and competition has managed to bring the industry to a very positive and recognised status, however, this is as far as it can go without the proper infrastructure and professionalised development schemes. Europe is learning from the mistakes and successes of China and North America to establish a best route for development.
The mentioned storylines and narratives pursued by esports brands also expands to non-endemic brands entering the segment via investments and partnerships. Usually interested in reaching a younger generation, non-endemic brands are increasingly interested in partnering and sponsoring esports brands. However, unlike in other regions, Europe is highly focused on making sure these brands also relate back to the game with any kind of activation at events or outside of these. This allows fans to truly engage with the brand and create the base for long-term mutually beneficial relationships.
In short, there is no interest in money and a logo, as it is clear that esports events especially are attractive to fans as an experience; more than the game and athletes themselves in many circumstances. Brands coming in must be credible and related back to the game, with some successful partnerships such as DHL with ESL (Electronic Sports League) and Beko with LEC (League of Legends European Championship).
A potentially beneficial opportunity for the esports industry, especially in Europe, is traditional sports teams, such as football teams entering the segment of esports as a way to diversify their brand and also attract a different kind of fan. Some football teams have already experimented in this field such as Celtic venturing into a Call of Duty competition which was well-received, and PSG partnering with a DOTA2 brand in China.
It is becoming clear for traditional sports teams that with the growing interest of generation Z in esports, traditional teams will need to venture out into this segment, as has also been tested successfully with the esports premier league in the UK. Better explained by chairman of the European Club Association “We should seriously start to think that the competitors of the game today are not other sports, clubs next door or in the next countries, but League of Legends, esports or Fortnite. Those are the ones who are going to be our competitors going forward”.
It seems that Europe is focused on working towards a common goal of establishing esports as a recognised and professional industry. Learning from China, European brands are exploring options to use the established position of esports in the region to help them grow, be it through partnerships with brands or targeting athletes.
It is clear esports is breaking its way into Europe and with it comes a lot of excitement. Hence the focus for businesses involved in this region seems more cautious, learning from some of the failed investment issues witnessed in other markets led by a lack of holistic harmony in providing data, and understanding the realistic potential of getting involved with esports.