CV19: ESPORTS & LICENSE FOR TRADITIONAL SPORTS TO BE CREATIVE?
By Chris Paget & Ryan Hawkins
One thing that is for certain is that esports, as an industry, is uniquely placed to continue to successfully scale and operate through the disruption caused by CV19 and, this time, with the support of the traditional sports sector.
As a digitally native business, esports is largely unaffected by social distancing and isolation (some may joke it is the bedrock on which the industry has been built!). Whether you are a streamer, a competitive player or a viewer, things have been, and will continue to be, much as before. Yes, physical ‘in stadia’ esports events have had to be postponed (just like traditional sports events) but almost without fail, esports stakeholders have pivoted to a digital only delivery model. In turn, they have significantly minimised business disruption and allowed rights holders to continue to serve and deliver value to their audience, competing teams, players, commercial partners and sponsors.
With the more traditional sports and entertainment sectors grinding (or in some cases already ground) to a halt, an increasing number of traditional sports stakeholders are looking to maximise the opportunities that esports and gaming presents. This has to be good for the esports and gaming sectors as a whole.
Clearly, the hiatus of live sports brings significant challenges for all parts of the sports market. However, as with all industries, it also presents opportunities. Yes, these opportunities may not plug the short term financial hole left in the wake of CV19, but they do have immediate short term upsides, and if approached correctly, potentially longer term audience and economic upsides.
In this industry piece, we break down some of the recent trends and analyse the opportunities presented by esports and gaming activations.
Audience Engagement & Content Creation
Sport is in many respects privileged. The unpredictability of being ‘live’ engages people with its uncertainty, its moments of brilliance and the deep rooted story lines that run throughout sporting rivalry. Live sport creates social interaction and, for a lot of people, the routine of pre-match gossip, the match day experience and the post-match analysis is their normal. In many respects, sport engages audiences just by taking place, and while a competitive playground, sport has been able to monetise this engagement through broadcast revenue, sponsorship income and ticket sales.
“sport can’t blame CV19 for the fact audiences are getting older. It is widely recognised that sport needs to work harder at cultivating and engaging with a younger demographic: the very demographic that esports and gaming has in abundance”
While the impact of CV19 has driven a large ‘coach and horses’ through these three revenue streams, sport can’t blame CV19 for the fact audiences are getting older. It is widely recognised that sport needs to work harder at cultivating and engaging with a younger demographic: the very demographic that esports and gaming has in abundance.
In this respect, it is hardly surprising to see many traditional sports leaning on its little brother, esports, for a helping hand. While this may not be to the liking of some quarters of the (admittedly older) hardcore sports fan base, it is, with respect, not intended for them. To a certain extent it is 'needs must’; there is a content void which needs filling - and there are only so many archive clips and re-runs of old matches we can take (including England’s amazing Cricket World Cup victory last summer!). On the other hand though, it provides the opportunity to create engaging and relatable content that draws in current and (hopefully) new sports fans.
In the five weeks or so since CV19 really started impacting our day-to-day lives, online engagement has never been higher and it has been fascinating to witness how different sports, leagues and teams have approached and, in some instances, embraced the opportunities of online engagement. Unsurprisingly, gaming and esports have been at the forefront.
Take Leyton Orient FC as an example. As soon as the English football season was postponed, the club hosted an online FIFA 20 tournament titled “Ultimate Quaranteam”, which attracted 128 clubs from around the world. The initiative provided the club with exposure and worldwide engagement that is usually unachievable for a club in the fourth tier of English football. Motorsport has also provided two interesting examples. In the US, NASCAR hosted the “iRacing Simulator Races” along with its broadcaster, ESPN. Current drivers, celebrities and hall of fame drivers were invited to take part, generating a viewership of 903,000 and 1.3 million respectively, and ESPN choosing to air additional races mid-week. Similarly, Formula 1 has hosted virtual eGrand Prixs on Sky Sports, attracting a star studded line up of current F1 drivers, past legends, esports professionals, pop stars and sporting stars from cricket, golf and cycling.
Admittedly, certain games titles are more suited to the conversion to esports, such as FIFA and racing simulation games, but the opportunities extend outside of these more linear crossovers if sports or brands are willing to be creative.
Star Appeal, Cross Over and Collaboration
In the past, there has been a divide between gaming and sports, two industries which are theoretically, at least, polar opposites. However, over the past few years there has been an increasing convergence between them, which CV19 has turbocharged.
“there is an opportunity for the worlds of sports, gaming and online entertainment to collaborate like never before”
We have seen swathes of professional athletes using their down time to showcase their love of gaming via streaming or online competitive gaming. Notable examples include:
Dele Alli and Kevin de Bruyne, who streamed playing Fortnite in order to help raise money for the Twitch.TV Covid-19 Solidarity Response Fund. Their efforts, along with other streamers, helped amass over $2 million for the cause;
High profile footballers including Gareth Bale, Paulo Dybala, Jordan Pickford and Daniel James all participated in charity FIFA matches for UNICEF; and
Devin Booker, and other high profile sports stars, are regular streamers of games such as Call of Duty, and play alongside notable professional esports players from those titles. By a rather strange coincidence, Booker actually found out about the suspension of the NBA season whilst streaming with the founder of esports team, 100 Thieves.
Granted, there may be a saturation point, but the impact that these individuals can have on their teams, sponsors and sports as whole should not be underestimated. There is an opportunity for the worlds of sports, gaming and online entertainment to collaborate like never before. Whilst collaboration like this may be a little alien to the world of sports, it has been the bedrock of growth and scalability in the online world. You need look no further than the journeys of the world's largest and most influential YouTube and Twitch stars who have collaborated with each other to grow their audiences to the tens of millions.
In an era where the personality is king and authenticity is a prerequisite, sports stars who are open to collaborating with the stars of the online world holds huge potential in bringing in the next phase of sports fans - something that brands are all too aware of.
Brand Engagement
The imposed lockdown and consequences of CV19 has had an immediate and seismic impact on broadcasting and ticket revenues. While sponsorship revenues are slightly more resilient they too have been, and will increasingly be, affected. This is to the detriment of brands and the sponsored team, league or athlete alike. The absence of live sport inevitably means a reduction in brand exposure.
While the online world will very rarely be able to recreate the exposure and profile that live in-stadia action and broadcasting provides (in both sporting and esporting contexts), there is nonetheless an opportunity for those brands that are willing to think creatively. This creativity inevitably involves activating online but importantly provides brands with the ability to engage with the younger demographic: the fans and ‘spenders of money’ of the future.
“using athletes in gaming content is one of the unique opportunities that this CV19 world provides”
Brands looking to increase their online activations will likely see the opportunities that gaming, esports and their sponsored athletes hold. As they should. But they would be wise to look at how brands before them have entered the esports and gaming sectors. While the audience is there and is accustomed to being marketed and sold to, such marketing and selling needs to be more tailored, subtle and sympathetic than perhaps might be the case in a pure sports context.
Using athletes in gaming content is one of the unique opportunities that this CV19 world provides. Brands, if they approach it correctly, will be validated by their sporting ambassadors and moreover by their ability to plug into the cross-selling opportunities of those stars collaborating with the gaming and esports world, and its stars. In so doing, engaging a new and potentially covetable long term audience while creating potentially significant goodwill and positive association.
Comment
The worldwide impact of CV19 is unescapable. However, it is suggested that this period of uncertainty and downturn should be viewed as a period of exploring sustainability and looked at as an opportunity to invest in the future. This future being: the future fan, the future of content consumption and the future of sponsorship messaging and activation. To a certain extent CV19 has shone a light into the world of the future, and for those stakeholders that are able to deal with the immediate crisis, it provides a unique and unrivalled opportunity to try and work out where they fit in (or where they want to fit in) this world of tomorrow.
“this period of uncertainty and downturn should be viewed as a period of exploring sustainability and looked at as an opportunity to invest in the future”
From an esports and gaming perspective, the big question, however, is how these industries will fare when the live sports hiatus is lifted. Both in terms of the inevitable diversion of attention away from the online world when live sport is back on our screens, but also as to whether it will continue to be used as a vehicle for traditional sports stakeholders to grow and engage their audience.
On the assumption that the CV19 ‘trial run’ is successful, it could (and hopefully will) provide a blueprint for how the two worlds of sports and esports can live side-by-side to each other’s benefit.
Chris Paget is a Partner in the Sports and Esports Group at Sheridans. He advises internationally renowned names within the sports, esports and entertainment sectors across one all aspects of commercial and business affairs. You can follow him on Twitter at @chrispaget_, on Instagram at @chris_paget through the Sheridans Sports Twitter account @sheridanssport and contact him at chris.paget@sheridans.co.uk
Chris is also the founder of Milestone, a mental health charity aimed at Tacking Setbacks Through Sport. To learn more about Chris’ story and the reasons for setting up Milestone you to read his blog post: There.Is.No.Type.
For more information on the Milestone, its aims and some of the exciting initiatives and events that it will be running please see its website at www.teammilestone.co.uk and give them a follow on Instagram and Twitter.
