PCR puts a spotlight on esports in an interview with gaming creative marketing agency, Hotdrop, specialist esports agency, Promod Esports, events company, epic.LAN, Interactive specialist, SPREE and specialist manufacturer of Custom, Gaming, Desktop PCs, laptops, Novatech
Heather Dower, Founder and CEO of Hotdrop, Rob Black, Founder of Promod Esports, Jon Winkle, Managing Director of epic LAN and Jonathan Nowak Delgado, Co-Founder, Managing Director of SPREE Interactive and Novatech join together to give their views on the current state of the esports industry.
Please could you explain a bit more about what products and services your company offers to the sports and gaming markets?
Heather Dower, Hotdrop: “Hotdrop is an esports and gaming creative marketing agency. We have a great team who work with the likes of tournament organisers, teams, brands and government-backed research initiatives to successfully connect them to endemic esports and gaming audiences.”
Rob Black, Promod Esports: “Promod Esports is a specialist esports agency. We help brands and IP owners deliver the best esports experiences to fans from online tournaments to stadium events to live broadcast.”
Jon Winkle epic LAN: “We started putting on community gaming events (or LAN parties) back in 2003 for a small number of people in a village hall in Stoke-on-Trent. Since then we’ve grown organically and now see around 750+ people participating in our events along with thousands more watching online. We target these events at amateur teams and position ourselves as the first live event that players will take part in after joining online leagues and see ourselves as an important stepping-stone on the road to becoming professional.
For the other 49 weeks of the year we’re a technical support agency working alongside other events and gaming projects whether that’s providing event support, equipment hire, crew sourcing, custom software development, networking, broadcast engineering, you name it.”
Jonathan Nowak, SPREE: “SPREE Interactive delivers large-scale, multiplayer, free-roaming commercial VR attractions, content and technologies to the location-based entertainment industry.”
Novatech: “Here at Novatech, we’ve been working closely with the gaming industry for a fair few years now, supplying top-of-the-line workstations and rack-solutions to creatives and developers. We also provide premium gaming PCs, such as those in our Reign Gaming line-up, to gamers, content creators and streamers on Twitch and YouTube.”
What is the current state of the esports market in your opinion?
Heather Dower, Hotdrop: “The esports market is forming steady, sustainable growth where we have far more data rich approaches available to understand and create successful commercial viability and revenue streams.
Far more consideration is starting to take place in the initiation of forming long term, scalable, and realistic strategies that bring a true harmony between brand values and a compelling market offering for the fandoms to consume and engage with.
For Hotdrop and even personally, it’s exciting to be at the forefront, leading the charge on educating endemics and non-endemics and creating environments and approaches that work on an individual basis.”
Rob Black, Promod Esports: “While Esports has seen more and more mainstream media attention and is now gaining audience traction with traditionally non-gaming demographics, it is still a nascent market with a huge amount of evolution to come.”
Jon Winkle epic LAN: “It’s probably the strongest it has ever been. The industry as a whole hasn’t been fully stopped by COVID, leaving it as one of the few forms of entertainment that has continued relatively uninterrupted throughout the pandemic.
We’re finally at the point where you can have a conversation about esports with friends and colleagues without feeling like you should keep it a secret and most people have at least heard about it, even if they don’t fully understand it!”
Jonathan Nowak, SPREE: “While esports may have once stood for a subset of sports culture, it has grown into a full industry in its own right. As competitive video games continue to integrate into popular culture, global investors, brands, media outlets, and consumers are all paying attention.
With over 3 billion gamers globally by 2023, global VR gaming market estimated to reach $92.31 billion by 2027, esports revenues estimated to reach $1.5B by 2023, combined with increase foot traffic across a variety of retail locations, the company’s entrance to the eSports market is a strategic move.”
Novatech: “Esports was always a very niche market but it’s gained a great deal of traction, and quite quickly, in recent years. We think that’s partly due to how far technology has come, particularly smartphones, laptops and tablets. With more and more people having access to mobile devices and the app stores on those platforms, entering the world of gaming has never been more convenient, or affordable. There are so many free or extremely inexpensive games available on the market and a great deal of these games encourage competitive online play, so it seems natural to us that the influx of interest in esports is at least in part due to the explosion of mobile gamers looking for something a bit more robust than simple idlers, clickers or puzzlers.”
How is your company involved in esports gaming?
Heather Dower, Hotdrop: “Our involvement is about harnessing the true potential of the industry’s dynamic demographics by constantly innovating and creating new, exhilarating ways for our clients to activate within the space.
Our team brings a diverse skill set and perspective to the industry. We’re masters of the delivery process, from concept to creation. We provide everything from campaign management, brand identity, shoulder content production, social media strategy, through to the creation and go to the market of IP. We’re bold in how we help brands execute, whether it’s for tournament organisers, teams, vendors, etailers or IP owners.”
Rob Black, Promod Esports: “Our team works with IP owners to create white label events, tournaments, or broadcasts, or we work with existing product platforms to provide genuine experiences for audiences and customers. We also have great access to a diverse range of inventory for brands to get involved with within the esports space.”
Jon Winkle epic LAN: “In terms of our direct involvement, we’re an amateur level events organiser hosting 4-day feature events in the UK aimed at those looking to break into a more competitive career.”
Jonathan Nowak, SPREE: “We recently announced our first exclusive, licensing partnership with VR Nerds to distribute the world’s first all-in-one, mobile free-roam, immersive VR eSports experience for Tower Tag, the largest VR eSport game globally currently with over 1 million plays.”
Why is esports on the increase and how has it helped during the Covid lockdown?
Heather Dower Hotdrop: “Viewership and hardware sales have seen direct uplift during COVID, this is down to the ease of accessibility to always-on content, alongside gaming hardware, seeing prices that are more attainable, lowering the barrier to entry, enabling aspirational drive and overall involvement.
The sector sees year-on-year growth despite Covid. Global audiences were watching in their masses before the pandemic and fans expected continuation with minimal disruption, so esports reverted back to online only competitions. Although easier to execute than sport, revenue streams have been hit without physical events and we won’t know the true impact for another 2-3 years.”
Rob Black, Promod Esports: “Esports had a breakout year in 2020 predominantly caused by Covid19, which meant most traditional sports programming was no longer possible. Esports was given an opportunity to
capitalise on its exponential subculture growth to step into the mainstream, filling in gaps for linear TV takers around the world. This was predominantly through simulation esports such as FIFA20 or F1 2020 etc., this small jump from physical traditional sports to their digital equivalent helped to show audiences to CMOs the world over, the power and potential of esports.
Jon Winkle epic LAN: “There’s no doubt that esports has seen a huge growth during a year in which so many forms of entertainment have been reduced due to the global pandemic.
That’s not to say areas of the market have not suffered, it’s been 12 months since any sort of sizeable live event has been able to take place and that’s hurt a lot of brands and jobs, but in terms of viewership on esports products there’s been some serious numbers generated online.
The lack of traditional sport has certainly been a factor, just look at F1 Esports as an example where for many months, virtual races involving some of the famous faces from the cockpits took the usual live race spots on a Sunday afternoon.”
Jonathan Nowak, SPREE: “Like in many areas, COVID has accelerated existing trends like the rise of eSports.
COVID lockdowns have led to many people increasing their time on Twitch. 889 billion minutes have been watched over the last year, up from 660 billion minutes in 2019. Similarly, there are now 4.4 million monthly streamers in Twitch in 2020, compared to 3.64 million in 2019.
COVID has fueled even more demand from shopping malls, which now desperately need alternate revenue streams and innovative ways to utilise the floor space especially with foot traffic fluctuating and increasing in various markets.”
Novatech: “Exposure and awareness are probably the key factors when it comes to growth, which is true of any industry, really. The more people who see it, the higher the chances of someone taking an interest.
As for Covid, it’s actually two-fold; in a roundabout way, it’s helped with some of that exposure and awareness. In the wake of social distancing and trying to keep professional sportsmen and women safe, we actually saw a number of sports take the opportunity to utilise esports as a means of continuing to do what they do best, such as with the F1 racing last summer. The Grand Prix went virtual and drew in several million viewers on YouTube alone, many of whom were likely existing F1 viewers, and new to the idea of esports. So not only did esports get some of the limelight for a short while, but it also helped fill what would have been a significant gap in the sporting and entertainment industry last year.”
How are you seeing the esport market evolve? What are the current trends?
Heather Dower, Hotdrop: “Gaming and esports audiences are leading the way; their subcultures are the ones influencing and infiltrating mainstream mediums such as music, sport and apparel. We’re seeing music artists like Onset wearing a FaZe Clan tracksuit over mainstream designer brands on his own merit, emphasising how conventional esports has become.
Gamers are early adopters; they are the ones creating Internet culture and viral moments that become recognisable in an offline capacity to the everyday person. Their power in numbers dictates what’s on trend, no matter the category.”
Rob Black, Promod Esports: “In the short term the necessity of remote broadcasting during lockdowns has driven an understanding of how brands and IP owners can still create engaging content using remote broadcast teams, rather than physical studio broadcasts. This has created an understanding of how to still engage the audience while reducing some costs and allowing for different types of content and or spend. We are also seeing the increased leverage of esports teams and players’ own IP, the teams and players are beginning to understand that they’re media businesses rather than a traditional sports team.”
Jon Winkle epic LAN: “In the UK in particular we’re starting to see a huge shift in the level of professionalism with top tier teams.
The UK hasn’t had a great reputation for many years in terms of its players and teams (where it’s always been strong for on screen talent and production quality), but with the recent examples set by teams such as Excel Esports, other teams are starting to follow suit with how they conduct themselves in partnerships, the level of content they create, the way that players appear in front of the media etc.
On the B2B side, we have seen lots of new entrants into esports during recent years, particularly from those looking to pivot while their main business is on hold or due to the ease of setting up remote broadcasts. I suspect that once things start to recover we’ll hit a saturation point where there isn’t enough work to sustain all of the “bedroom” businesses and we’ll see things condense back down again.”
Jonathan Nowak, SPREE: “The eSports market is a very exciting place to be at the moment. While platforms like desktop and mobile are dominating, we at SPREE believe that new technology platforms like AR and VR will power up the eSports gaming experience to a whole new level.
The rise of XR eSports will be inevitable and more affordable XR hardware plus top games like Tower Tag on the SPREE arena are boosting this trend.”
Novatech: “At the professional level, there has definitely been a significant increase in areas around funding, sponsorships, tournaments and their prize pools, which is almost certainly a by-product of the increased interest in esports that we’ve seen over the years. One article recently pointed out that winning a Dota 2 tournament in 2019 would have netted you more in winnings than Wimbledon by a margin of about $1 million.
If the year-on-year growth the industry has seen continues, this trend will likely scale with it too. We could also see the industry expand to include or tap into other game genres that would suit the format as well – the esports scene is very much dominated by FPS and MOBAs, but it would be interesting to see if it started to branch out into other genres like virtual sports, racing sims and online TCGs.”
Where do you predict the future of the esport market going? What can we expect to see more of?
Heather Dower, Hotdrop: We see the future of esports moving towards brands understanding the esports audience and its sub cultures a lot better, instead of treating ‘esports’ as one mass generic audience.
Each sub fandom and community requires its own unique approach with empathy to ensure you are making meaningful connections and creating brand affinity.
Building a highly engaged ‘sticky’ audience is invaluable as you can’t put a price on genuine passion and excitement for a product or brand, and like traditional sports fans, esports fans will only buy into brands if the relationship feels honest and if they truly ‘get’ it.”
Rob Black, Promod Esports: “I think we can expect to see more control exerted by the game publishers of their IP, in the games and how their esports offerings will tie into the overall media landscape they’re creating around the games they make. This will likely lead to some amazing experiences for audiences and revenue potentials for IP owners and selected 3rd parties. However, on the
flip side it could be detrimental to professional players and competitive integrity, with IP owners seeing esports more as a marketing exercise than about providing a fun and safe platform for competition.”
Jon Winkle epic LAN: “The last year has incited some pretty rapid innovation and efficiency as companies have been forced to adapt to an online-only world, it’s very likely that these changes will continue post-pandemic.
Events and broadcast in particular are unlikely to be back to “normal” for some time, so better use of cloud-based technology, connectivity and remote workflows will probably at least be a part of most shows in the future, regardless of where the main event is held.
In terms of what the public sees, we’re only going to see viewership numbers continue to rise, broadcasts become more interactive and visually impressive and more mainstream brands using esports as a means of accessing their future customers.”
Jonathan Nowak, SPREE: “Since consumers spend so much time on eSports, this means that brands need to meet them where they’re at by adopting eSports marketing. This could be through entertainment, fashion, sportswear, food/drink among other strategic collaborations partnerships in addition to let’s play reviews, product positioning, influencer marketing, and more.
Realising the potential of tapping into the eSports market, some brands have already made significant eSports marketing investments. So, the industry has seen an impressive increase in revenue in recent years.”
Novatech: “We believe the future of esports will come from the inevitable trickle-down effect that we’re still waiting to see. There’s a lot of focus on the professional-level esports currently, but ultimately, there’s an expansive and completely untapped foundation below it. We’re talking all of the high-level streamers, content creators and enthusiasts that compete with one another for fun, or for large charity events, that sort of thing. The same goes, though to a lesser extent, with amateur teams as well.
And it also goes beyond independent creators and close-knit online communities – just look at the business and education sectors. Organisations like Business Fives and NUEL are becoming increasingly common. Even the armed services have started putting together esports teams for team building days, R&R and even tournaments of their own.
Professional esports is really just the tip of the iceberg; the future of esports is everything below the water.”
How does esports impact physical sports? Is it good to encourage virtual gameplay rather than physical?
Heather Dower, Hotdrop: “Both sport and esports share the same ideologies and attributes at heart. They help develop invaluable personal soft skills, drive inspiration and positive change, and can even be an engagement tool to interact within our offline communities.
From a wellbeing perspective, physical and digital can and should coexist. Pro teams are now heavily focused on player wellbeing, and for casual gamers, virtual gameplay is helping them have a healthier lifestyle and can help introduce them into the physical sport, allowing the physical sport to benefit.”
Rob Black, Promod Esports: “I don’t think it’s healthy to encourage any one thing over another for anything in life. Enjoying a balanced lifestyle has long been proven to help provide increases in happiness and wellbeing. In recent years we’ve seen professional teams start to develop their holistic training approach for their players, with a focus on how eating healthily and exercising can increase peak performance during stressor moments while competing.”
Jon Winkle epic LAN: “As someone who previously worked in the physical sports world, I was constantly going on about how that industry could and should learn from esports, particularly with how it engages some of the harder to reach corners of the market.
We’re already seeing more esports teams take wellbeing more seriously and even fitness brands entering new esports partnerships, particularly during the COVID impact and that’s only going to grow as people become more conscious of their health.
I don’t think there will ever be a full crossover, but both industries can learn a lot from each other.”
Jonathan Nowak, SPREE: “This is exactly where SPREE Interactive does combine both worlds, the physical and the virtual ones.
SPREE Interactive’s motto is: ACTIVE. SOCIAL. FUN. So our goal is to combine the physical aspects of real sports in an immersive way.”
Novatech: “Given the current Covid climate, it definitely gives us all a fantastic alternative until physical sporting events can resume as normal, though it certainly won’t ever replace it; both should be encouraged, both have different merits. We don’t believe it’s as simple as one being better than the other.
In the future, we imagine the two will exist alongside each other, perhaps even in equal measure, as parties on either side start to take an interest in the other. In some ways, this has already started to happen. The F1 example we mentioned is just one case, and F1 esports series has actually been around since 2017. Then there’s the whole community of professional footballers who play FIFA in their spare time and stream those games on Twitch. The interest is there, but, as we said before, it’s still in its infancy.”
Read the latest edition of PCR’s monthly magazine below: