eSports: A Lucrative Future For Football

by Mauro Zanetti
8th Oct 2018

We’ve all played videogames, one way or another. A pastime that captures the imagination, they may not always be perceived as healthy, but one thing’s for sure, a good game requires a lot of skill and is completely addictive.

eSports are different. Taking gaming to the next level, it’s highly competitive, strategic and the players are there to win big on a global platform. They’re professionals competing in major organized live and online tournaments. They want to be the best they can be and that by no means means sitting on the sofa with a console and fries. To them, mental and physical health is a priority.

The difference between a casual gamer and an eSports superstar is the same as that between an amateur athlete and an Olympic Champion, a Sunday kickabout and the Champions League Final. The live events alone attract crowds of tens of thousands of people, and are hosted in international arenas where icons like Beyoncé and Madonna perform. They also earn millions of dollars in tickets and merchandising.

A multi-billion dollar industry with gems in its eyes and legions of fans worldwide who love the sport, players and gaming. How could football not want to be involved?


GAMING: THE BEGINNING
Many professional teams already belong to organizations: Evil Geniuses, Wings Gaming and Fnatic are the equivalent of Manchester United, Real Madrid and Bayern Munich in the world of eSports. The most successful gamers have tens of thousands of social media followers; and the Dota 2 competitions (the most popular eSport) have paid out prizes totalling $170 million. It's undeniable: eSports are rising fast, with Newzoo estimating that by 2021 they will have over 300million fans, with total revenues exceeding $1.6 billion.

The most popular games generally have a Multi-player Online Battle Arena (MOBA) format, like Dota 2 and League of Legends. (I.e. Each player controls a single character as their team competes against another.) The second most popular genre is First-Person Shooters, like Counter-Strike: Global Offensive, whereby multi-player teams compete in an armed combat simulation. Numbers are impressive too. In the Dota 2 final 2018, the OG team defeated PSG.LGD (Paris Saint-Germain) 3-2, watched by an audience of 20,000 at the Rogers Arena in Vancouver, and 15million online, mostly Chinese.

Football as an eSport is in its infancy. It can’t reach those numbers yet; however it still attracts millions. In the early stages of the FIFA eWorld Cup 2018, over 20 million players from 60 nations participated. The final (32 players) was held at London’s O2 Arena, followed by 322,000 fans online.


FOOTBALL CLUBS ARE JUMPING ON BOARD
Since 2015, the year Wolfsburg signed 2 FIFA players, clubs are showing increasing interest in eSports, either creating or sponsoring professional teams. Approx. 40 European and North American clubs have launched FIFA teams, with one-third of FIFA 18 eWorld Cup finalists being from said clubs. (E.g. EM4RV (Bayer 04 Leverkusen), Marcuzo and Deto (Manchester City), Thestrxnger (FC Basel), Damiel (Roma Fnatc), Moaubameyang (Werder Bremen), Maestro (Lille), Yimmiehd (Feyenoord), Megabit (Vfl Bochum) and Dani Hagebeuk (Ajax).)

Some clubs choose to compete in non-football games instead: FC Schalke 04 (League of Legends) and FC Copehnagen (Counter-Strike); others, like PSG, compete in multiple (e.g. FIFA, Rocket League and Dota 2). The opportunities are endless and PSG is one of the best examples of a club determined to do it well and not to miss out. Their Dota 2 team PSG.LGD is one of the strongest in the world and has already secured 3 major sponsors: Monster Energy, Douyu and Lynx.

Despite this, while organizations specializing in eSports demonstrate well-defined strategies, most football clubs seem to be entering the market cautiously by measuring investments and observing market developments. I think that’s wise, given that marketing dynamics are still fluid and returns on investments are not yet predictable.


ANY CLUBS THAT DON’T ARE MAJORLY MISSING OUT
A fast-growing and lucrative market, eSports like any new market offers both opportunities and risks. Research conducted by Limelight Networks shows that international football fans still favour watching traditional sports; however that gap is shrinking, particularly in younger demographics (age 18-25) and in Asia where eSports are preferred (supported by statistics from the recent Dota 2 final). Therefore, if a football club's marketing strategy is to target those demographics, owning eSport teams is a relatively inexpensive way to achieve good results.

However, converting this popularity into direct revenues won’t be easy, partly due to market characteristics. Online streaming platforms and TV channels pay event organisers to publish their content; attendees pay them (not teams) for tickets and official merchandising; and brands (in any industry) pay for advertising in live event streaming, on-demand videos and TV broadcasts. Moreover, teams and event organizers are paid for- and have- different types of sponsorship agreements (e.g. product placements, jersey sponsorships, use of teams in marketing communications).

Assuming that football clubs are unlikely to start publishing videogames, the most easily accessible revenue channel is sponsorship (creating teams of successful pro players and linking them to leading brands), similarly to PSG. Clubs with stadiums could also host live eSports events, which would allow access to the richest portion of revenues: media rights, ticketing and merchandising. However, this would require structures with certain characteristics, higher investments and a more complex entry strategy into the market.

My advice: 
Football clubs intending to enter the eSports industry need to do their research first, not just place their name with a gaming company and let them get on with it. Understanding eSport culture is vital. Some big clubs are taking the ‘easy’ route, but it will almost certainly bite them later. Secondly, don’t underestimate the power of the team. ‘Conventional’ managers run the risk of considering pro players as teenagers playing video games. Big mistake. Just like traditional sports, a winning team needs a place to train, advanced equipment, a competent coach, healthy lifestyle and a huge amount of practice. They are professionals, and are seen as such by the millions of fans who follow them: considering them differently would be a radical mistake.

The big question: Is there long-term and lucrative success in eSports? Definitely. Pwn the n00bs!




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