Firstly, I have been on the record in saying the following about the eSports subculture:
- eSports will be in the Olympics one day. It will likely not look like the stationary gaming tournaments we have today but it will be taken more seriously by the IOC with the popularity of AR/VR in the next 12-16 years
- eSports will have a meteoric rise like online Poker did in the late 90’s and 2000’s but it will have a much larger impact on society and will have more staying power due to the breadth of game subjects
I am sure after reading those statements, half of you guys now think I am crazy! Despite those bold statements, oddly enough I do not play any video games so my opinion is more based on trend analysis and less on personal feelings. I did love them as a kid growing up in an age when Nintendo and Sega ruled the gaming console wars. I stopped playing them around the time I turned 16, likely because I had different priorities. I never stopped loving the video game culture, I just chose to keep an arms distance in college and as a young professional because I feared I would be extremely unproductive. Then in 2015, I was flipping channels and stumbled on a video game tournament on ESPN. I am an avid sports fan so I tend to always turn to ESPN when I want to decompress in front of a TV. Unlike many regular ESPN watchers that night, I wasn’t pissed off at these “nerds” on the sports channel. I was “pissed” off that I didn’t see this trend coming earlier!
Are you still wondering what the heck this eSports thing is all about? Here are some stats:
According to Newzoo’s 2017 eSports Market Report, the eSports economy is currently worth $696 million, with year-over-year growth of 41.3 percent. Brands were expected to spend $517 million in 2017; of that total, $155 million went to advertising, $266 million was spent on sponsorships, and $95 million for media rights. Consumer spending on merchandise and tickets was expected to reach $64 million. The market is expected to hit $1.4 billion by 2020.
In 2017, the estimated global viewership for eSports competitions was 385.5 million individuals. Of that, about 191 million are considered “enthusiasts,” while 194 million are only occasional viewers. Enthusiasts are expected to increase by 50 percent by 2020.
Those revenue and viewership numbers are impressive enough but if you add in the countless major YouTube gaming channels and Twitch (owned by Amazon) channels devoted to gaming, you will see this truly is an international phenomenon that your brand NEEDS be paying attention to for possible opportunities. Being that my major focus in CPG is functional food and beverage and sports nutrition, the majority of my following should have ears perked way up to this topic. eSports athletes are looking for the edge like any other sport, they just have much different demands than your normal football player or soccer player. Those demands usually mean sitting in front of a gaming console or high-powered PC for hours (and I mean sometimes 8+ hours at times).
Still not convinced at the trend? If you are a businessperson that likes to “follow the money”, just look at all the recent acquisitions and investments by major high-profile investors:
- Vision eSports gets $38M from slew of athletes like Kevin Durant, OBJ, and St. Louis Cardinals (http://bit.ly/2ovopAC)
- Philadelphia 76ers acquire eSports Team Dignitas and Apex (http://bit.ly/2CPs4h4)
- Sacramento Kings co-owners buy Team Coast LCS spot, start NRG eSports; Shaq, A-Rod, and Jimmy Rollins invest in NRG eSports (http://bit.ly/2CPs4h4)
There are probably another 10+ private investments I can link but you get the point. Similarly, huge publicly-traded companies like Activision Blizzard, Electronic Arts, and Tencent have been having high growth YoY in their revenue.
So what does this all mean for your CPG company?
First, with any emerging trend, data can be fuzzy so if you expect to make these marketing or product development decisions purely on quantitative analysis, you are going to always be sitting on the sidelines. Next, this emerging trend is going to still have a period of flushing out winners and losers. You can view that point as a negative or a positive depending on your risk tolerance and understanding of the blue ocean opportunity. Finally, approaching these teams, leagues, companies, and influencers will have wild fluctuations in valuation so be patient in finding what works for your marketing budgets and goals. If you are developing products, make sure to test with a minimum viable product and stay lean while you look for opportunities to double up efforts.
What do I think are good CPG categories to market in eSports?
- Protein Bars and other healthy easy-to-eat snacks
- Energy Drinks and caffeine-added sodas
- Nootropic style supplements
**Basically anything that increases performance in terms of capacity, alertness, and multi-tasking from quick consumption.
Want further reading? Here is a good article – http://adage.com/article/news/e-sports/308447/ but there is also tons of pieces across reputable content companies that can dive deeper into this subject.