Esports: a look inside

Esports has been a hot topic for a while now, and rightfully so. Often depicted by a snazzy time-ramped video of teenagers clasping a gigantic trophy in a packed stadium while glittery flakes rain from the sky to represent their triumph over all the other noobs. While this spectacle can provide a taste of the emotions and enormousness that esports creates, it is a mere surface scratch on an exciting and often mysterious industry.  

This article aims to simplify the current state of the industry from our point of view at We Are Sweet. We are a team of well-informed multimedia designers and developers skirting the edge of esports but with little direct involvement. I’ll discuss some of the opportunities and challenges esports presents to people like us who are trying to be more involved.

My Loadout

Let me first qualify myself a little with regards to having a genuine interest in gaming- as if my fully tricked-out Scuf Impact controller pictured above isn't enough to convince you I take things seriously! I began on Atari where a particular favourite was Combat. After progressing through just about every title on the Megadrive and graduating to a chipped PS1 I finally got into Tom Clancys early FPS on PC, Rogue Spear. Back in 1999 when the Millennium bug was a real worry, I was fortunate to have access to a T1 512kb connection which meant I was usually the lobby’s host on M-player which gave me a distinct ping advantage over everyone else. As a result, I wasn’t too bad and was quickly enlisted to a competitive clan.

This led to me cracking Photoshop 5.0 and learning how to use it to create a logo for the team. As a curious kid, I started pulling the game files apart and learned that you were able to access and modify the textures for almost any model in the game. With my new graphics skills, I went and added the clan logo to every bunker, barrel, gun, grenade and character I could find the texture files for. 

Fast forward 20 years and I still game a lot; the proud owner of Champion rank in Rocket League and the same in Fortnite. I’ve played with several pros including the most successful professional Rocket League player; Turbopolsa of Team Dignitas -which really demonstrated the skill gap between casual and pro. It showed me how average I really am on the sticks in comparison to the professional players. 

I’ve tried my hand at streaming, I’ve attended professional tournaments (the cover image of this article is one I took myself), I’ve even had content on the front page of Reddit briefly, I’ve edited frag movies that have had 330,000+ views and yet from a professional business perspective I’m still an outsider to the gaming industry. In the last year, I’ve attended a lot of esports business events to make some meaningful connections with people that are involved. I also had the opportunity to speak on stage and share my thoughts on the industry at the Excel Centre during the CS:GO ICE Challenge.

What is Esports?

This might be obvious for people that already work within the industry but it’s also where the confusion begins. Everyone seems to have a slightly different view of what esports is and I want to bridge the gap as much as possible - so apologies if this is patronising. At a fundamental level esports is computer gaming, which is by nature nearly always competitive. Competing on computers isn’t a new concept at all and for those that grew up on it, the social element of gaming isn’t a phenomenon either - it’s just hanging out with people that have a shared interest.

Esports is far too broad to summarise in a single sentence, like saying 'finance', it's an all-encompassing term to cover lots of sub-industries and markets. However, esports often describes just the very top tier of professional gamers in a given game title where teams compete for the number one spot. There’s a lot of prize money up for grabs but the professional scene is only one facet of the much wider gaming industry. Without the casual gamers, smaller leagues, video creators, modders, marketers, merchandise, streamers, publishers and other organisations, the professional esports tournaments simply couldn’t exist. 

It’s hard to define where esports starts and ends within gaming. We view esports as something much larger, more complex and with deeper diversity than just the professional competitions. The wider gaming culture includes; casual gamers, grass roots competition, mobile, console, VR and many more. These sub-groups have unique elements and could each be considered their own niche markets within the industry. 

The Broken Wheel

The professional tournament events are expensive affairs. They’re usually operated by the game publishers and kitting out a broadcast-ready stadium doesn’t come cheap. Publishers typically make their income from game sales or through in-game purchases. The professional events are known to be a loss-leading advertising and marketing exercise to promote individual games to the masses, grab headlines and drive publicity that leads to more engagement and purchases from casual gamers. Historically, none of the publisher-operated leagues have made a profit without the financial support of the publisher's other revenue streams.

The intellectual property, media rights and ownership in esports can become very confusing very quickly. Some game publishers operate their own events and their own leagues, some use separately approved organisers, some allow licensing, some don’t, some take care of their own streaming output and so on. It’s clear that publishers like control, but to maximise revenue and growth of a title it can be in their interest to allow other communities and organisations inside.  

In traditional sports industries, nobody solely owns the sport and it is unusual for a new sport to seemingly pop up overnight. In esports that just isn’t the case. If Fortnite is the sport, it’s owned by Epic Games entirely. Fortnite is barely 3 years old, it’s unlike any other existing esport, and one of the biggest titles ever, making billions in revenue each year. 

As a battle royale title, refereeing and scoring can also be tricky. You can’t just have one winner and nothing else, so you need to determine a points system. In a game where the mechanics, weapons, environments and META (most effective tactics available) change almost weekly, choosing what is worth points and what isn’t, can dramatically affect who the winners and losers are. Imagine if football decided to replace the ball with a beach ball, blindfold all the players and award more points for hitting the crossbar than scoring a goal just a few days before the World Cup finals - that’s pretty much what professional Fortniters are up against.

Money Money Money

Traditional sporting ecosystems create a structure where revenue flows from fans to teams to leagues to the governing bodies and federations. It’s not quite this straight-forward but it is much simpler than esports. With the addition and extreme power/ownership of game publishers, this traditional model breaks for esports. Running an esports team is expensive: you need to pay salaries, training, travel, accommodation, sustenance, advertising, insurance, visas and more just to operate. To do well in competition and secure some prize money, increasing focus is given to player performance, training and wellbeing through research, science and coaching. 

With the vast majority of income going from fans directly to the game publishers through live event sponsorship and in-game purchases, it’s hard for teams and leagues to survive. Alternative models such as league franchising have been introduced in an attempt to solve these issues but there is currently no clear solution to structuring the ecosystem. Monetising each component of esports is one of the biggest problems currently facing the industry. Teams are becoming brands, creating personalities, selling merchandise and monetising their digital content creation to make the revenue they need to operate. 

One of the biggest income streams for any kind of media, broadcast or sport is advertising and esports is no exception. Advertising, sponsorship and endorsement are rife in esports. Each week sees new partnerships and collaborations with gaming-related brands and evermore with brands that are from outside of the esports space.

Media Convergence

It’s been well-documented that gaming is already far bigger than the film or music industries and is continuing to grow rapidly. Mobile gaming often gets its own stats, and PC is regularly separated from console metrics. But we see all of these becoming more entwined and less distinguishable than ever. This means a much larger cross-pollination opportunity for brands and advertising.

The world is increasingly digital. Access to high-speed internet connections and technology means that people are able to create, share and access content with much lower barriers to entry. Crossover content from film, games and music is far more frequent - and it makes sense. Cross-platform play allows players to compete on PC, mobile and console all at once as we move into what is likely to be the last ever console release as we’ve known them. The Xbox series X is basically just a baby gaming PC anyway right?! And Google Stadia is none of the above. The recent Star Wars - Fortnite event is a great example of huge brands coming together across all devices and platforms to create a live virtual event that allows users to interact and be a part of something bigger.

Know your Audience

There’s no strict age limit on playing or enjoying gaming, although age does present problems with PEGI ratings, international travel, professional contracts and video game violence - particularly when publishers want their games to appeal to the widest audience possible. But it’s hard to ignore the overwhelming number of young people watching and competing. The average age of the professional Fortnite players at the most recent world cup was just 15 with the winner Bugha pocketing a cool $3million at just 16 years old. This age group is notoriously hard to reach through traditional broadcast and the crossover media I’m describing is the perfect place to interact with Generation Z. 

There are lots of brands trying to break into the space to reach this audience but esports is notoriously a tough gatekeeper ready to socially ridicule and meme anyone that doesn’t quite do it right. Twitch has incubated a whole new way of talking, full of PogChamps, Keygasms and Kappas. To operate successful advertising with this audience, you need to speak their language and you need to be in the know. 

DHL seemed to crack it recently by putting a huge amount of trust in the industry, working very closely with ESL to ensure their approach was on point and spoke to the fans. DHL supply logistics services to professional ESL tournaments and this was the focal point of their campaign. DHL engaged fans at a Dota 2 competition by using their EffiBOTs as a form of physical delivery both in game and IRL (in real life). This subsequently led to Team DHL Chants throughout the stadium with fans creating their own DHL uniforms.

You need to be careful when drawing up psychographics for gaming. It isn’t just nerdy teenagers, not even close! As the stigmas of gaming continue to vanish, there are more closet-gamers creeping out of the woodwork and plenty of people only just dipping their toes in. The stereotyping surrounding esports and gaming has understandably created a guarded community but I believe this is also hindering the industry development and growth. The organisations both inside and outside the gaming world that are moving past the stereotypes, listening and trying to understand each other are the ones seeing the most benefit right now.

Early Doors

Like any growing industry, gaming is still volatile and we’re all figuring out how things should be done. Only last year loot crates were a huge source of income, admittedly for the publishers again, but this certainly helped support the professional scene and increase awareness. Recently, many games moved away from this model because it contains such strong aspects of gambling. 

There is currently no international agreement stating loot boxes are a form of gambling, but many countries are updating legislation to declare just that. Game publishers are changing the way their game items are purchased as they don’t want to take the legal risk. Companies and platforms have been created that are entirely based on exchanging, buying, swapping or even gambling on loot boxes. But in a year's time can any of them viably exist and remain within the law? 

The almost borderless nature of computer games creates a variety of unique opportunities and challenges. Most game titles are available internationally, but continents and countries don’t always share the same rules, regulations or rituals. The contracts, visas, agreements for players, event organisers, coaches and other professional positions are still constantly changing which creates a choppy landscape for business. The protocols and standards are still being established for many aspects of esports.

A Fast V-Buck

With any emerging market there are a few jokers and cowboys looking to make some quick cash - take a look at the continuing craziness of cryptocurrency which is still jostling to establish some reliable big players. Fake coin offerings still appear and are difficult to police in a distributed network. The poorly informed or unprofessional companies and individuals that are jumping on the esports hype train definitely exist, but they make it very difficult for high-quality products, services, partners and investors to join in. 

During my time at professional esports business events, I’ve noticed just how defensive people already inside of the esports scene can be, sometimes unwilling to trust an outsider that puts a single foot out of place. I’ve never seen lawyer, gardener, or designer pulled apart or completely disregarded by an accountant for misspelling or mispronouncing Accountancy - but that’s a common reality in esport/esports/Esport,/E-sport/3-SPO2T/electrosport/digi games - or however you say it…. Pretty much no other industry has this! But other industries don’t usually see so many people getting it wrong either...

Sure there’s a correct way, but that gets more confusing when you start your sentence or title with it - is it ok to capitalise the E then? I think this peculiar scenario exists as a low-level vetting process to try and identify the cowboys, but I believe it closes down decent people looking to learn and get involved with good intentions. There’s a lot of things in life that you learn the hard way, but being laughed at for asking what esports is or dismissed for not writing it correctly on LinkedIn shouldn’t be one of them. Particularly when that person is there to learn and potentially has a lot to offer the industry. 

So does it matter how esports is spelled? Yes, of course it does. The industry says so and therefore you should respect that and get it right - once you know of course. But also No, it doesn’t matter at all. If you are in the know and someone is spelling it wrong, tell them nicely that it might affect how seriously people take them. But don’t let it trigger you. Instead, listen to that person and see if they have something valuable to share, chances are you probably don’t know an acronym or a word from their background experience. 

If you go to somebody's house and their policy is that you take your shoes off, then you take your shoes off. If you go stomping mud throughout their house, they'll ask you to leave. If you respect that you're in their house and removing your shoes is the done thing, you're more likely to get offered a cup of tea and the chance to have a proper conversation. Don't tread mud through esports house.

Endemics

I’ve never heard the word Endemic branded so consistently and brashly in any other industry. Originally the word Endemic was used to describe people’s vulnerability to disease based on their geographic region or race but at some point, it was transferred into marketing as a way to describe a natural or logical relationship between the audience and advertiser. To me, the history and connotations associated with the word Endemic make it a strange choice when talking about marketing. After all, marketing is all about connecting your service or product with the audience that will benefit and buy - pushing your business to people that won’t benefit isn’t non-endemic, it’s just bad marketing to the wrong audience. 

Like much of the other loose-knit terminology in esports, individuals seem to be using it to mean slightly different things. Mostly it seems that endemic is used as a buzzword to prove you know that the esports space is a delicate one - to be approached with care. Some of the most successful partnerships in esports have come from companies that don’t have a natural or obvious affinity. Non-endemics seem to come under the most scrutiny where the term is often used to describe outsiders that won’t effectively be able to break into the esports world.

The DHL case study I mentioned previously is a great example of a supporting service helping to pave the foundations of the live professional events. Logistics is a big part of any event but is DHL really an obvious endemic advertiser? I would have said no, but now that they’ve engaged the esports audience with an effective marketing strategy that explains how they can be involved, they have made their way past the gatekeepers and into the esports inner circle. Now that they have achieved this, DHL now seems to have become ‘more-endemic’?

Proper Partnerships

Red Bull are often considered as an endemic, but not home appliance brand Beko. This doesn’t really make sense and further supports the idea that endemic is being used to describe obvious partnerships. Brands that are partnering successfully suddenly become more obvious and make it easier for other similar businesses to feel like more of a fit for esports. Fedex probably has a better chance of entering the space now, but only if they put in the same effort, energy and understanding as DHL to get their message right and truly engage. 

Red Bull has made itself synonymous with anything intense or competitive but that’s only through their advertising and over a long period of time. You definitely don’t need or benefit in gaming by consuming Red Bull. Beko however, spotted that a good level of health can lead to increased performance and successfully partnered with Riot Games in 2019. They debuted in esports by using healthy eating for pro players as their angle to achieve more than 8 million views on their ‘Eat like a Pro’ campaign. Short videos featuring well-known professional League of Legends players showed viewers how to make smoothie counterparts to in-game potions. The deep understanding of the audience and creating content that resonates was key to the campaign's success.

Level Up

A resounding theme at the esport business events is that there is a desperate need for supporting professional services to help mature and establish the commercial landscape. While the very top tier such as Riot Games or Epic Games has access to world-class production, broadcast and legal support, the trickle-down of talent has yet to be seen. There is a lot of talent, entrepreneurship and skills already surrounding the technology, media and entertainment aspects of esports at all levels. But at low to mid-levels there is also a distinct lack of experience in areas that fit neatly alongside, such as; broadcast, production, advertising, design, planning, contract law, tax advice and many more. 

There’s a big gap between the behemoths at the top of the esports food chain and everyone else. I’ve heard a lot of reference to grassroots esports at industry events but this is another term to add to the list of common words that mean very different things to different people. Grassroots is regularly used to describe the journey from a casual gamer sitting in their bedroom to becoming a professional star on the stadium stage. But often grassroots is used as a way to describe the giant, unestablished business space below the goliath game publishers.  

Trust will be built over time. As more previously unexpected brands move into esports and show how they can work together, I think the endemic/non-endemic buzz will fade away and the walls to the inner circle will slowly fall. The standards will become more concrete as effective practices normalise the way things are done in esports. Hopefully, the minefield of terminology will become more defined and everyone both inside and outside of gaming will start speaking a clearer, more coherent language that allows for better communication. I hope to see these improvements continue from the top with money coming in from advertisers, investors and supporters that aren’t so obvious, but also at the other end of the chain with the supplier partnerships supporting the bottom end. 

We Are Esports

We have a lot of experience working with traditional sports teams, federations and rights holders but our clients span many other industries, from luxury hotel groups to international charities. Fundamentally we do the same thing for all of these clients: we build websites and systems that make a measurable impact to their business. This involves enhancing customer interaction, engagement and experiences, increasing conversions and improving operational processes. Each client is unique with their own nuances, quirks and parameters that we need to work with but ultimately the practices of good design and development don’t change too much.

We’ve been attending esports conferences and meeting the individuals involved because we believe our skills and experience fills in some of the gaps. There’s hundreds of great tech start-ups presenting online platforms for gamers but many of them are flawed from a UI/UX perspective or missing integrations. Many pro teams have almost no web presence outside of YouTube or poor engagement with their fans. Some content creators are lacking basic production values and lots of esports organisations don’t have the correct operational setup to run efficiently. 

These are all areas we have years and years of professional experience in delivering. We have a good grasp of the esports ecosystem and a genuine interest in gaming. We grew up with technology and we’ve been exposed extensively to the traditional sports industry which certainly isn’t the same as esports but also shares many similarities. We Are Sweet has almost no professional projects currently in esports but we think we are positioned perfectly to help teams, orgs or even players with the things that we are good at. If DHL and Beko can prove to be great suppliers or partners then we’re confident we can too.

GG.WP

Good Game, Well Played. Esports has come a long way very quickly, that’s exactly why it’s still so volatile and why it’s so exciting. Esports as an industry is far too large and varied to summarise in generalised statements. Just think how different or similar each sport can be. While esports shares a lot of aspects with traditional sports, media and technology, it isn’t the same as any of them. There are lots of new unique challenges to face where established industries and traditional experience can help as a starting point for referencing or creating solutions. 

The relative youth of esports means there’s not much comparative legacy to support. This makes it nimble and flexible enough to change quickly. There is so much other industries are learning from the esports scene and to me, it feels like all the industries I’ve covered are converging by learning from each other. A few pioneers are testing the waters and reaching out or inward to create partnerships that bridge the gaps and build trust. That is something We Are Sweet wants to be part of - we have a lot to offer and a lot to gain. I’m hoping that more conversations continue and all parties listen to each other with patience and not judgement. 

What do you think are the biggest challenges facing esports in 2020 and how do we address them?