It’s doubtful that many PYMNTS readers play video games. But it’s a sure bet that any kid under 25 does, and probably not just once in a while. It’s gotten to the point where the reality of “professional gaming” is no longer some “out there” idea, and is currently pushing the boundaries of several industries at once while drawing fresh eyes and attracting big money from those looking to cash in on the hot new action.
“It is the juxtaposition of social networking and entertainment and sports all combined,” said Glen Calvert, chief operating officer of Fnatic, a London-based eSports outfit that hires professional gamers, runs tournaments and sells branded gaming apparel and gear.
“It’s not just a video game. It’s the future of entertainment,” Calvert said in a recent chat with PYMNTS.
For those who don’t play video games, that future starts with conceptualizing professional video gaming in the same manner that one would analyze a traditional sports team or event. Overlay the eye-popping data on the number of hours of gaming content that is consumed, and the enormity of the opportunity starts to emerge.
“I think we ended up with about 125 million watched hours for all of 2020, and about 25 to 30 million hours of original content created,” Calvert said.
By comparison, Netflix’s 75 million U.S. subscribers now watch over six billion hours of content per month — but that wasn’t always the case.
A Hard-To-Reach Audience
Not only does the pro-gaming or eSports business have a huge pool of eyeballs on screens every day, those eyeballs happen to belong to a very hard-to-reach demographic.
“They don’t read a newspaper, they don’t actually watch TV. They’re sitting on YouTube or on Twitch, or watching gamers, and they’re very much into ad-blockers as well,” Calvert noted.
Specifically, he said the typical gamer is a digitally native Gen Z or millennial, age 14 up to the late twenties, and belongs to a market that is evenly split between Asia and the West, noting that China’s eSports industry is currently the most advanced in the world.
“So the brands and the investments coming into the space are very much because of the eyeballs that are interested in eSports and gaming,” said Calvert.
Just as in regular sports, eSports fans cannot be lumped into one basket, since the audiences are very different. As Calvert pointed out, they are as different as basketball fans are from football or soccer fans.
CMO’s Jaw Hits The Floor
Calvert said the most forward-looking brands, such as BMW, Nike, Gucci and Monster Energy, are tapping into gaming and eSports to sponsor either a team or tournament.
“We’re seeing that these big brands all have people in their marketing departments who are into gaming, and they have been saying for the last three or four or five years that ‘we should be doing something,’” Calvert said. “Then slowly, once the CMO’s jaw is picked up off the floor after learning the size and scale of the audience, the number of actual people watching professional gamers, they start to think, ‘we should actually start to test this.'”
Over the past two or three years, investment levels have risen, and are starting to match what’s spent on traditional sporting events like tennis or golf. That is triggering a deeper analysis of things like return on investment and the most innovative ways to effectively reach gamers.
“Originally, it was like, ‘What is this? How do we test this? How does this value compare to the Super Bowl or World Cup or Premier League?’” said Calvert. “Now they’re leveling up the investment, similar to what they’re putting into football, tennis, golf and sports like that.”
The eSports Superstars
They may not be at the level of Michael Jordan or David Beckham or Tiger Woods just yet, but Calvert said the eSports world has its own stable of superstars, including 29-year-old Tyler “Ninja” Blevins, who has an estimated net worth of $25 million and was just profiled by GQ magazine. Even Microsoft is reported to have inked a $30 million sponsorship deal with Blevins to endorse its short-lived streaming platform, Mixer, which was unable to take on segment leader Twitch.
There’s also Italy’s gaming guru Giorgio, aka “POW3R,” whose face is currently on billboards across Milan and other cities thanks to a deal with Adidas.
“To a certain generation, these gamers are now mainstream,” noted Calvert. “So the impact has been significant in terms of awareness validation in the sector. It really is a seminal moment for professional gaming.”
Seeing Is Believing
The growth of eSports is the kind of thing Calvert said must be seen to be believed.
“Unless you’ve been to any sports event, it’s quite difficult to describe. People can’t picture what it feels like to sit down and watch video games and have that be entertaining. I felt the same way before I got into the industry,” he said. “And then you go to [a tournament], and you realize it’s like a festival. It’s this whole experience where you’ve got the entire buildup beforehand, the fan zones and all the [costumes], and the meeting and greeting of the players and sharing stories.”
Although the gaming business itself has continued to grow during COVID, and has benefited from the same digital lifestyle shifts seen in other online activities, Calvert said the absence of live stadium events and crowds has been the main area of pandemic pain.
“I think you can look at us as a traditional sports club, but we’re also a bit different because it’s gaming,” he said.
As far as the Fnatic business model goes, they have gamers that not only compete, but also create and sell products that gamers use, such as peripherals, keyboards, mice, headsets and a line of clothing.
“We look like a traditional sports club, which makes money from prize money and sponsorships, but we also have a significant product business that’s basically split 50-50,” Calvert noted. “Fifty percent will come from products and 50 percent will come from eSports activity and competing — prize money, media rights and sponsors.”
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