E-sports: A game changer for the marketing industry?

Whether you were the biggest geek in school or are now the office jock, you need to wake up to the realities of e-sport. For those of you not familiar with the term, e-sports is basically organised, competitive gaming, and usually comprises multi-player teams playing against one another.

Globally, brands such as Coca-Cola have woken up to the budding possibilities of this field. For several years, the beverage giant has been involving itself in major e-gaming events such as the League of Legends World Championship in the US market. In fact, for a few years now, the company has even had a head of global gaming.

Other brands such as Nissan, Intel, Nike, NBCUniversal and Toyota have also started investing in this arena. However, many client-side marketers Marketing spoke to in APAC were not yet comfortable with their experiences in this arena.  Agency players were not surprised that marketers were hesitant.

“This is the most untapped segment of entertainment. Films are filled with product placement, but with gaming, especially mobile gaming due to lower barrier to entry, brands can own the entire game,” Ashley Ringrose, the founder of Soap – Linked by Isobar told Marketing.

But that is not to say the giants of Asia are not picking up on the trend. In fact, at the tail end of March this year, Chinese billionaire Jack Ma and his team of experts at Alibaba decided to dip into the gaming pool. Alibaba Sports Group (AliSports) paid Singapore-listed e and m-commerce company YuuZoo Corporation Limited, a multimillion US dollar fee to organise and run the World Electronic Sport Games (WESG).

AliSports and YuuGames, together, are planning to launch 1200 e-sports events this year in 15 cities across China, which is home to more than 100 million e-sports fans, and more than 440 million gamers.

While AliSports might have been formed to target China’s highly well-paid sports industry, it has clearly seen a light at the end of the internet sports tunnel. In fact, the group plans to invest US$15.4 million for WESG alone. Moreover, WESG will have 20 appointed e-sports clubs competition centres and contest participants will compete for a lucrative US$5.5 million in prize money.

At the press conference, Zhang Dazhong, CEO of AliSports, said: “Sports is a multi-billion dollar business in China, with massive growth potential. That is why Alibaba is investing heavily in this vertical. Linking sport and technology enhances the quality of life. That is what we want to do through AliSports.”

And what’s in it for YuuZoo? YuuZoo will gain a significant number of new users, who will be added to YuuZoo’s fast-growing user-base, and of course, it will generate additional revenue from promotional fees, advertising revenue and e-commerce sales.

In fact, according to research by e-sports and mobile intelligence experts Newzoo, the global e-sport revenue generated via advertising, sponsorship, media rights, merchandise and tickets and additional game publisher investments will reach US$463 million in 2016.

Already, the amount gamers spent in Southeast Asia reached almost US$1.1 billion in 2014, of which 60 million consumers spent an average of US$18.40 on games, with six key countries accounting for 99% of the total revenues generated in the whole region. These countries are Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

And, of course, media rights companies such as MP & Silva are also seeing value in this segment.

Most recently, the company bagged the global marketing rights of Garena, a Southeast Asian internet and mobile platform company. The foray into the space for MP & Silva will see the company work closely with Garena to secure brand partnerships and maximise commercial opportunities in Asia Pacific for three major e-sports properties.

Beatrice Lee, MP & Silva’s managing director of Asia Pacific, says that in this arena, there’s a sponsorship opportunity that is yet to be realised. Quoting NewZoo studies, she adds that Southeast Asia comprises more than 126 million gamers. This figure is set to double by 2017.

What is heartening for Lee is she is now seeing brands from tech, mobile and lifestyle express interest in this space arena and discuss aspects such as entitlements and potential sponsorship platforms. Other possible avenues of branding, which are also being discussed with clients, include featuring logos during live game-play and screen saver loops, broadcast sponsorship,online advertising, media and promotional exposure, as well as product placement and activation at the tournaments.

Combating prejudices

Despite the compelling statistics and marketing trends, several advertisers in Asia still remain hesitant and may not consider e-sports or gaming as an established form of mainstream entertainment yet. Elicia Lee, director of gaming property platform Eliphant, told Marketing it is still a challenge to get sponsors for gaming events, especially mainstream brands who still view gaming as being a niche market.

Eliphant currently owns two gaming properties, GameStart Asia, a gaming convention in Singapore, and also BEast of the East which runs regional e-sports tournaments. Particularly in Asia, she adds, there is also a lingering stigma that gaming is bad for you.

“Many people do not realise that with the explosion of smartphones and mobile gaming, almost everyone has played a game at some point. Gaming is going mainstream,” she says. When probed as to where she feels the hesitation is coming from, she says it is probably the fear of the unknown.

“A lot of people are unfamiliar with gaming, and thus are hesitant to invest, especially when they are unable to see direct or tangible ROI from sponsoring one or two events.”

However, Lee is quick to understand clients’ perspectives as well, given the industry is still up and coming and there have been a lot of experimental initiatives which might not have worked out in a brand’s favour. One recent example is the Shanghai Major which saw many technical and production difficulties and was criticised by gaming enthusiasts.

“I’ve seen brands who have invested in badly run or badly promoted events and gotten burnt, which has damaged their perception of the gaming market’s potential.”

Seconding her sentiment is Dennis Yu, digital and gaming media planner at Maxus. Yu agrees that many companies are still harbouring the idea that “gamers are geeks, male and anti-social”. But in reality, the demographic profile is changing with there being more casual/mobile gamers and a half-and-half split when it comes to gender.

The rise of mobile adoption and an evolution of the casual gamer has led to an influx of the female demographic. Moreover, the ubiquity of smartphones has fostered a rise in “burst” style game-play where playing time is made in bite-sized increments instead of one consistent session. For the casual gamer, one who is not a heavy user of video games, this is a perfect medium.

“We find that females are filling this demographic extremely well, explaining why Candy Crush has such great integration with females and subsequently casual gamers,” Yu says.

To read the rest of the article, check out the May 2016 print edition of Marketing Magazine Singapore.