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On Nov. 14-15, over 200 people made the trip to Marina Del Rey, California, to participate in the 2019 Lagardère Sports Esports Rising Conference. The conference, designed to engage and inform attendees about the business side of esports, saw some of the biggest names in the space take the stage to share their stories and knowledge.
From esports organization valuations to sponsorship ROI’s, The Esports Observer has put together the top 10 insights from the conference.
No. 10 – For Gen Z it’s All About Connections, Community, and a Little Competition
“The game I would play forever is Fortnite. I know it’s very basic, it’s very cliche, but it’s been a way that I can connect with my sister. She’s younger than me and she lives on the other side of the U.S. but I am able to feel connected to her and feel this close bond when I’m playing this game. And that makes me happy.” – Leanne, Age 20.
The four young adults on the Gen Z panel, which focused on their experiences with esports, had a common theme that stems from their ability to connect with others, whether in person or remotely via gaming. It wasn’t the competitive aspect that came through during this panel so much as it was that connecting through a fun online medium was fun and important.
No. 9 – Content Development and Distribution–No Content Strategy, No Business Success
“You really got to focus. It’s not just because you’ve got a training facility now and you’ve got your studio. You now have the opportunity to actually create content with brands who want to understand how are you using that content to solve my business problem?” – Marc Riccio, EVP, U.S. commercial, Lagardère Sports and Entertainment
Riccio driving home the point that simply having an incredible facility doesn’t guarantee brands will want to work with you. What values do you hold that will engage your audience and how can you use your brick and mortar assets to achieve a relationship with sponsors and consumers?
No. 8 – Esports is the Hottest Space in any Business Right now
“I think it’s the hottest space in any business right now is esports. So we have more inbound stuff. I get more emails of people saying they’re wanting to sponsor us, wanting a job, wanting their kid to get into it. I don’t think there’s a more interesting space to be and right now than esports.” – Tucker Roberts, President, Philadelphia Fusion & Spectacor Gaming
According to Newzoo, esports was expected to explode, reaching $1.1B in revenue in 2019 with most of that coming from endemic and non-endemic brand investments such as media rights, advertising, and sponsorship.
No. 7 – There is a Massive Population of Late Gen Z and Millennials That Consume Digital Goods
“I know the forecast for both team liquid as well as rumors associated with the forecast for some of those other teams. The logic associated with how they get to that revenue is sound. That’s because there is a massive population of Gen Z. There’s a massive population of late Gen G millennials. There’s an ability to monetize that audience through sponsorship, commerce, physical goods, digital goods, soft goods, and more. You have all of the media rights associated with the broadcasting of content that you can monetize against, plus all of the product activations that are in all of the content or team sponsorships. Speaking on behalf of Team Liquid, our revenue has grown substantially year after year and we see no sign of that changing.” – Steve Arhancet, co-owner of Team Liquid.
Team Liquid is one of the top esports organizations in the world in both branding and competition. The organization went outside endemic esports sponsors and partnered with Marvel in an apparel brand sponsorship. Arhancet shows that he has a knowledge of how to diversify branding and sponsorship streams, and that looking in places yet unreached can lead to dividends.
No. 6 – Educating Players About Wealth Management is Now Very Important
“There are a lot of players, especially on the League of Legends side, they’re starting to make some strong financial decisions with their money. I think we need to be educating those players; they are pretty young. We’re talking to 19, 20, and 21-year-olds. Investments you make today are going to help you when you’re 40s and 50s, so that’s another area that’s interesting to see some sort of educational play from the brand.” – Joe Marsh, CEO, T1 Entertainment & Sports
With players like League of Legends top laner Heo ‘Huni’ Seung-hoon signing a contract for over $2M USD, having organizations and brands come together in helping these players understanding investments strategies become paramount. The NBA, MLB, and NFL all have mandatory wealth management classes that rookies are required to attend.
No. 5 – Vying for Discretionary Income Will be a Major Battle for Esports Events in 2020
“A lot of our fans take a lot of their discretionary income to come be a part of this. So we need to make sure that they’re not just getting the two or three hour of the match, but they’re getting an entire experience and feeling that sense of community.” – Kristin Connelly, senior director, marketing, Overwatch League
A week-long fan festival was the build-up to the Overwatch League Grand Finals, where brands were in full display. But unlike simply having banners or people walking around handing out samples, Coca-Cola, for instance, had an interactive booth where fans could jump in the air and create an action shot of shooting authentic Overwatch cartoon weaponry. You then got to take the picture home. Fan engagement will be a major theme at esports events come 2020.
No. 4 – Expectations for Media Rights Revenue Still Seen as Highest Long-Term Potential
“Advanced tech data analytics, artificial intelligence, and virtual reality. How will this improve events the industry? I think there’s great potential and that respondents are seeing a great potential for advanced technologies and new sports.” – Bobby Sharma, special adviser, sports & entertainment group, Foley & Lardner LLP
Sharma is looking to the next tier of video consumption. Will consumers pay for more than just the 2D experiences they get from their televisions and mobile devices? Media rights for an augmented or virtual experience should be something that everyone keeps their eyes on.
No. 3 – Part of the Plan is to be Ingrained in the Culture and Lifestyle of Esports
“Everybody we know is doing a lot of studies. Doing a lot of studies about the way they [consumers] express themselves. We are trying to understand and by creating and making mistakes, then we will understand that eventually” – Milos Ribic, director, corporate ventures, adidas
Ribic brings fresh air and honesty, admitting that mistakes will be made in regards to marketing and branding, but as long as you are willing to truly go all-in, only then will you have successful business partners.
No. 2 – Until Companies are Publicly Traded, We Really Can’t Know What True Valuations Are
“There’s no transparency in this industry. Right? And nobody’s really publicly traded. Pricing is all over the place. And also, I think if you disaggregate what just transpired with OpTic, right, the value of the Overwatch franchise in Houston was a fraction of the value that somebody would pay for a new franchise. But I think both illustrate the point, right?” – Chris Overholt chairman, OverActive Media Group
Esports organizations have held their books very close. Various outlets have tried to do valuations on organizations, and quite frankly, some of those outlets were duped into believing numbers that weren’t true (See: Forbes’ Echo Fox Valuation). However, with the esports organization Luminosity being bought for $18.7M by a public entity, Aquilini GameCo Inc., those books have become available to view.
No. 1 – Esports Isn’t Going Anywhere and Will Continue to Grow
Jason Lake summed up the entire conference when he told the room that, despite what Mark Cuban might think, “Esports isn’t going anywhere and will continue to grow.” – Jason Lake, CEO and founder of Complexity Gaming.
For more insights from Esports Rising 2019, check out this in-depth recap.
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