ENTIVA GROUP, LLC.

eSports Marketing
Playbook
Your definitive guide to Marketing in eSports
Alex Fletcher

Contents
Foreword.................................................................................................................................... 1
Beginning ................................................................................................................................... 2
Defining eSports Marketing ........................................................................................................ 3
Distinguishing eSports Marketing ............................................................................................... 5
Impact of Star Power.................................................................................................................. 7
The eSports Experience Paradigm............................................................................................. 9
The eSports Participation Goldmine ..........................................................................................12
Perspectives on eSport Consumption .......................................................................................15
Understanding the Rise of Brands in eSports ............................................................................18
Defining eSports Media .............................................................................................................22
Predictions for the Future of eSports Marketing ........................................................................27
Examining Team Businesses in eSports ...................................................................................30

Foreword
The eSports landscape is as exciting and fast-changing a place as any other in today's
global marketplace. This is a compilation of a years worth of analysis focused on the
eSports industry done at Entiva Group, LLC. The contents should not be mistaken for
marketing research; instead it is a forward-thinking attempt to make sense of the ways
fans/viewers, teams, the media, and others interact to make competitive video gaming
tick. The proposed framework is meant to give structure to thinking and encourage
further discussion.
Alex Fletcher
President and Founder of Entiva Group

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Beginning
Regardless if eSports are ever considered a sport, there are discrete differences
between the business of traditional sports and eSports.
"The eSports ecosystem needs sustainable businesses and positive returns for
investors. Comparing eSports to sports unnecessarily elevates the expectations of
investors. "
Jonathan Pan, The Future of eSports
The same holds for the subject of marketing, where there is some, not total, overlap
with traditional sport marketing and management techniques. Applicable areas should
be readily integrated, with the rest left as is. Keep in mind that no single perspective can
hold for the entire eSports universe. This is a conceptualization, towards the creation
of standardized management and marketing practice; a general theory
of eSports marketing, not to be confused for a prescriptive set of best practices.

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Defining eSports Marketing

To date, a comprehensive approach to eSports marketing has not been generally
defined. The term connotes a number of meanings, some more confusing than others.
The following is standard definition for text:
eSports marketing is the spectrum of activities designed to meet the needs and wants of
its consumers.
The term consumers and consumption encompasses activities, such as playing,
wagering, watching, reading, and creating content associated with the eSports domain.
As of this writing, eSports are heavily considered a retention marketing vehicle for
game publishers like Riot Games or Valve. This notion of competitive gaming as,
primarily, a method of attracting and retaining a strong user base, is shared by industry
pundits. However, there is substantial opportunity in investigating the two themes
of: marketing of eSport events/services and eSports as marketing vehicle, both of
which will be the focus of this work.
To clarify, an organization like the Electronic Sports League (ESL) engages in the
former while HTC, with sponsorship of eSports teams like Cloud9, the latter. Thus far,
the flow of sponsorship dollars has outpaced the marketing of products and services
directly to consumers; despite a vibrant community of engaged fans and viewers.

Special considerations for the eSport product

There can be no marketing without product. Meaning, the eSport product must
be defined to address the topic of marketing. Keep in mind, there is no single product;
instead the notion will vary across the industry. The focus here is to outline common
properties. A standard definition goes:
A product can be described generally as a good or service created to satisfy a
need/want. It encapsulates a combination of tangible and intangible attributes (benefits,
features, functions).
The granularity of different eSports products will vary, but are all distinguished by the
following elements:
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Some form of competition, typically in some game form.

A separation into a "digital" space governed by "actual" world time.

Regulation by rules.

Specific forms of prowess and training to develop skill.

Special equipment.

The product is built around properties taken from both gaming and competitive sport. In
essence, eSports are games built around video gaming. The eSports product is built
around the fusion of these properties. Figure 1 demonstrates how these elements blend
together:

Figure 1 - Elements of the eSports product

Additional elements of the eSports product

Digital rules The physical venue is less important than the digital, as most will absorb
the eSport experience over the web.

Authentic sense of ownership and connection The eSports community is the

lifeblood of its current success. Membership is not defined along commercial lines, as in
traditional sports.

Engagement is par the course Casual viewers are converting to

fans/enthusiasts faster than the overall rate of growth. In other words, eSports is a very
sticky experience.

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Worldwide scope eSports arent drawn along local or national lines. Competitive
gaming is a global experience.

New forms of social facilitation Full scale integration with new generation of
communication/technology, e.g. streaming and social media

Distinguishing eSports Marketing

To define eSports marketing, it is imperative to identify its distinguishing characteristics.
As a competitive activity, enjoyed by millions across the globe, eSports carries several
identifiable elements. Below is a categorization of properties to be incorporated
into successful strategies for packaging eSport merchandise, personalities, and
experience(s).

eSports are a global phenomenon Traditional sport has long relied on the concept of
locality, as a basis for growth along national and even international terms. However, this
is not the case for eSports where there are no strong ties to physical locality; a reality
that is both strength and weakness.

Lack of gender delineation The physical differences that exist along the gender
divide in traditional sports simply don't hold in eSports. Accordingly, there aren't (yet)
strong distinctions between male and female play. Still, current gender imbalances have
given raise to several approaches such as female-only, "safe places" in the hope of
encouraging more balanced eSports participation (playing, watching, etc).

Intellectual property gone missing The eSports domain currently lacks

consistent use of intellectual property (IP) artifacts such as trademarks, copyrights and
patents; commonplace in the traditional sports world, these are embryonic within eSports
today. However, there are signs that this might be fast changing.

Separating marketing from promotion

Marketing and promotion are two oft confused terms; this applies doubly to the eSports
world. The key difference between marketing and promotion is that the former is a part
of the latter. As discussed earlier, the marketing mix consists of price, product, place
and promotion. Thus, marketing can exist without promotion but not vice versa.
Webster's Dictionary defines marketing as:
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"The activities required by a producer to sell his products, including advertising, storing,
taking orders, and distribution to vendors or individuals."
On the other hand, the Free Management Library defines Promotion as:
"Promotion keeps the product in the minds of the customer and helps stimulate demand
for the product. Promotion involves ongoing advertising and publicity (mention in the
press)."
As the numbers show, eSports boasts a growing, highly engaged audience. A mass of
knowledgeable, connected enthusiasts have reduced the premium on the marketing
mix. Whereas, in traditional sports the occasional participant crowd is a key
target demographic. More emphasis must be placed on developing effective strategies
to grow the scope of eSports participation, if current growth rates are to continue.

Promotion: Using big events as a model

A recent media bonanza surrounding the 2015 DOTA 2 International Championship,
with its $18 million prize pool, demonstrates the importance of big events across the
eSports space. Large, moneyed tournaments like 2015's International serve as
lifeblood, not just for the pro teams competing in them, but for the entire industry.
Understanding why big eSports events like the International are a success offers critical
insight into applying similar elsewhere.
Compendium for the win
Valve Software, the maker of Defense of the Ancients (Dota) 2, offers a digital
compendium for each year's International. The compendium, which sells for $9.99, is at
the heart of the International's success as an event; it not only helps players and fans
from around the world celebrate the tournament, but also fuel the prize pool for the
finals. In 2015, contributions composed over 91% ($16,829,613) of the total prize pool.
The compendium is part digital fan item, part crowdfunding, and part promotional item.
Valve successfully integrated the notion of rewards, which not only feed back into the
tournament, but also drive increased engagement through gameplay. As the total prize
pool reaches stretch goals, rewards are granted to the entire participating community.
These include loading screens, emoticons, music and more.
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A model for success

Here promotion efforts will be defined using the AIDA model, which is an action-oriented
approach, shown below:
A Attention (capture attention)
I Interest (attract interest)
D Desire (arouse desire)
A Action (obtain action)
Valve's compendium underscores how the design of a successful eSports promotional
tool, implements all of the above. As the Dota2 community reached each of the stretch
goals, additional levels of attention, interest, desire and action were generated therein.
In parallel, the steadily increasing prize pool served as promotion outside the
community. As a result, word of the tournament spread across the global media
landscape with ease. With the International Championship blossoming into an eSports
version of the Super Bowl, a signature event capable of drawing attention and
awareness far outside its traditional fan base, even ESPN, the worldwide leader in
sports, took notice and provided coverage of the event.

Impact of Star Power

The often staggeringly large player bases of popular eSports titles put top performing
professional players in a unique position as influencers. The global popularity of
services like Twitch.tv provides top pro gamers with live access to audiences of fans
and supporters everywhere. While the result has been celebrity status and cult
followings for top digital athletes, some similar to those of traditional sports stars, very
little has been done to maximize this reach within a marketing context.
Traditional sport leagues and organizations have benefited greatly from the
marketability of top performing players. The notion of sports superstar as global persona
with which brands, media and other stakeholders can profitably associate is well
entrenched in 21st century nomenclature. The eSports world has yet to leverage similar
models, up to this point; where significant challenges lie in addressing
disproportionately short lifespans for professional gamers.
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Long careers are a rarity, even for elite digital athletes. Additionally, there is a high rate
of burnout amongst pro players. Some point to the premium placed on lightning quick
reflexes and decision making skills by some eSports, as primary reason that most
playing careers are over by the early 20s. However, evidence points to factors such as
instability amongst ownership, lack of proportional income generating opportunities, and
the stress of playing year-round playing a larger role than otherwise assumed.
The reality is, while being elite (top 1% of eSports pros) can pay very well, there is much
less for those outside that handful. Players must sacrifice a sizable chunk of their lives
to pursue a pro gaming career and, sooner rather than later, the costs outweigh the
perks. These short careers are not, in turn, conducive to harnessing the brand of star
power on which strong marketing efforts are built.

Examining the eSports industry

A working definition of the eSports industry must include an outline of its organization.
Yet, as with any industry, the only constant variable is change. eSports is no different.
There is a tremendous amount of change and maturation taking place, as of the writing
of this series. Various segments are still forming, others dont yet exist, and others will
change their shape considerable over the next year or two. The approach here is to
outline major factors affecting both the direction and nature of change.
The community as marketplace
The traditional sport industry is built with the consumer at its nexus. Whether its the
purchase of tickets, sporting equipment, or team merchandise, the goal is to maximize
customer spend. Comparatively, a well-defined concept of the eSports consumer does
not exist in full. Today it is the community member, not the consumer, at the center of
the eSports experience; this persona composes a global assembly of participants, fans
and viewers which are the litmus test for marketing success. In turn, the current
challenge is innovation around encouraging more commercial activity amongst a
strongly non-commercialism backdrop.
However, the eSports community cannot be pigeonholed as consumers too quickly; as
this diverse crowd tends to value authenticity and a sense of equitable value exchange
over transactional commerce. For example, the 2015 DoTA 2 International was able to
rake in more than $16 million through the sale of its compendium. Many were quick in
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labeling funds as gifting or crowdfunding, but it maintained key characteristics of

commerce; providing an effective model for the structure of an eSports marketplace.
A great deal of the compendiums success stemmed from community members being
able to: relate their purchase(s) to a cause (25% of the proceeds went to the prize pool),
receive meaningful (digital) items in return, and do so in conjunction with fellow
community members (social connection). In essence, DoTA 2s publisher, Valve,
successfully created a digital marketplace with crowdfunding elements. Obviously, the
excitement and build-up leading up to the preeminent DoTA 2 tournament aided
tremendously. Nonetheless, elements from Valves model must be considered as
effective tactics for invigorating an eSports marketplace.

The eSports Experience Paradigm

The birth of the eSports phenomenon spans back to the arcades of the 1980s and the
LAN parties of the 1990s. These events featured digital athletes gathered to meet,
socialize and compete. At the time, competitive gaming was proximity sensitive,
meaning competition had to take place in the same physical location. The advent of the
Internet, coupled with the technological advances and the first heavily multiplayer
focused games of the 1990s, marked the ascent of what is known as eSports today.
The experience was now digitally viral, capable of taking over the Internet, and could
involve more than just one player versus another; providing the foundation for
widespread, competitive gameplay at the heart of eSports.

Live events as the centerpiece

The purchase of majority shares in the Electronic Sports League (ESL), one of the
pioneers in high quality live competitive gaming events, by the Modern Times Group for
78 million helps demonstrate how valuable the live event experience is in the eSports
world. Currently, most professional eSports leagues lack, among other things, a strong
franchise model, consistent scheduling, and programming rights for live content.
Contrary to traditional sports, where spectators can depend on matches being held at a
pre-determined home or away stadiums, eSports depends on a vibrant ecosystem
of tournaments held across the world.

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The great thing with eSports is that it has become a global uniter. When you think
about it, what other sport is massively strong in both the US, Europe and Asia? So
soccer is huge in the rest of the world, but not necessarily in the US. Here, we have
American Football and Basketball, which again has following in other countries, but
eSports is truly universal.
Ehtisham Rabbani, CEO of SteelSeries, on the nature of eSports
The matchups for these tournaments, streamed across the internet at no cost, connect
the entire eSports community. When fans across the world can consume the same
match and connect with others doing the same, the game becomes a shared
international experience. The purpose of easily accessible streams, videos-on-demand
and such is to export the experience to a worldwide audience. All successful eSports
marketing perspectives should underscore the prominence of live events or risk falling
short of their potential.

An underutilized marketing vehicle

Live streaming has exploded in popularity, to a great degree, by expanding the scope of
authentic connectivity. The demand for authentic experiences, best delivered by live
events, must be addressed by eSports marketing efforts. These live eSports events
combine the social, entertainment and media elements of competitive gaming into a
cohesive whole. They also provide a trusted channel for reaching highly engaged
audiences.
The 2015 League of Legends North American Summer Championship, held in Madison
Square Garden, provided a glimpse at the potential of live events. The New York Police
Department shut down the meetup for Team Liquid, one of the teams competing in the
tournament, after over 1,000 fans gathered in Washington Square Park. Better
organization would have created a better experience for fans/supporters and helped
open up additional marketing opportunities.
Currently, little has been done to leverage the marketing potential of the live eSports
event. Some, incorrectly, assume introduction of marketing techniques will lead to a
reduction in authenticity. However, marketing should not be confused with crass
commercialism. Neither should it be associated with the everything for sale model
employed in traditional sports. Rather, eSports marketing efforts must first connect and
align with the underlying community to ensure long-term success.
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Note: The current phase of eSports market research and intelligence classes the entire
eSports domain as a single entity. This is done, mostly, to better compare eSports to
traditional sport counterparts. However, there is no generic eSports audience. For
example, the audiences for League of Legends and Counter Strike Global Offensive
eSports should not be classed as one and the same. When the audience for eSports is
cast as a monolith, the clarifying question should be, Which part?

Organic growth
The eSports experience transcends the popular game titles of the moment. Regardless
of which games are in vogue, elements of accessibility and participation will continue to
grow the eSports genre as a whole. The success of streaming platforms, which help
bring communities together, in the eSports domain, speaks to how valuable the notion
of accessibility is to engagement. For example, in the traditional sports world, where the
industry is ruled by paywalls, stringent media rights and business models built on
inaccessibility, fan engagement is becoming a serious challenge.
Participation by the mass of fans and supporters continues to grow the eSports
experience. It is imperative to correctly class fans and supporters as active contributors,
and not just spectators. eSports represents a trend away from passive consumption
models to a larger overlap with active participation, see figure 2. The group of casters,
analysts and content creators fuel engagement on sites like Reddit and other
community-focused sites across the web; all of which plant the seeds of growth for even
more interest and participation.

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Figure 2 - Courtesy of The Growth of Global eSports Towards 2017 by Newzoo

The eSports Participation Goldmine

The notion of video game play as spectator activity has grown from diehard roots to
mainstream force du jour. However, there are still widespread misconceptions about the
nature of competitive gaming as both activity and vehicle for marketing. Most of these
stem from assuming full equivalence with traditional sports. In reality, eSports integrates
a number of properties from sport, entertainment and media; making it more of a
participatory activity, with spectator qualities. At its core, eSports is an entirely new form
of participatory entertainment encapsulating more than just top-level professional play.
Brands must grasp this reality, in order to unlock the full potential of marketing
initiatives.

Entertainment and participation

When compared to traditional sports, competitive gaming is unique in that all
participants, regardless of skill level, play the same exact game; a fact that blurs the line
between spectator and player. Meaning, for a given eSport title, there is a strong
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correlation between those who play the game on their own time and those who view it
played. Along those lines, two facts are salient:
1. The vast majority of viewers are gamers, see figure 3.
2. Viewing participation for the general player base varies across eSport title.

Figure 3 - Courtesy of The Nielsen eSports Report

The same artifacts (teams, tournaments, broadcasts, etc.) that mark the top layer of
professional eSports also exist at the amateur level. Similar to how the traditional
sports industry includes participation at all levels (recreational, collegiate, semi-pro),
eSports is inclusive of more than just a spectator element. As such, eSport enthusiasts
must not be pigeonholed as simply spectators but also considered participants with
varying levels of skill, when appropriate. This dual role, of fan and competitive player, is
at the heart of the worldwide eSports phenomenon.
Millennials are putting video games at the center of their entertainment preferences,
but it is a new kind of gaming that is more social, interactive and engaging.
Neil Howe, president of LifeCourse Associates and leading researcher

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Video game play, alone, is not a new phenomenon. In fact, video games have fast
become a leading flavor of entertainment for the under 30 demographic. According to
The 2015 Essential Facts About the Computer and Video Game Industry released
by the Entertainment Software Association (ESA), 54% of the most frequent gamers
play a multiplayer mode at least once weekly. Coupled with the explosion of eSports,
there are now a multitude of online platforms that enable players to organize and form
competitive, social communities. One such example is the tournament platform,
FACEIT, which provides skill-based competitive match making for four eSport game
titles. Fit with 2.5 million unique users, FACEIT is built for amateur play but scalable
enough to host its own professional league. This notion is impossible in traditional
sports where separate infrastructure for amateur and professional is a requirement.
The emergence of these online tournament and competitive match-making tools provide
marketers with a unique opportunity to address gamers as more than just fans. This is a
significant shift from the past where, aside from in-game advertisements, it was
unmanageable to connect with the video game play experience. Additionally, since
these platforms dont change or impede upon the user experience, they are ripe for
innovative approaches to harnessing the eSports participation paradigm.

Marketing realities
As the number of eSport enthusiasts continues to grow, expect overall participation in
competitive gaming to do the same. The appetite for viewing video game competitions
is directly related to the appetite to compete in video games across a number of social
contexts. This includes:

Collegiate level organized competition across college campuses.

Semi-professional competitive play for varying monetary wages or prizes.

Youth age grouped participation involving parental authorization.

Recreational structured but, potentially, less competitive participation.

Nonetheless, the participation angle of eSports isnt as well-defined as its spectator

cousin; where metrics like average number of viewers and hours watched are more
easily understood by audiences with a background in traditional media platforms, e.g.
television. However, active participation offers the advantage of better connecting to a
key source of interest in eSports: passion for gaming. Accordingly, eSports marketing

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strategy must shift from attempting to view competitive gaming through the lens of
traditional sports, towards a fundamentally sound understanding of its dynamics.

Perspectives on eSport Consumption

The eSports experience is shared by a rising number of enthusiasts across the globe.
Consumption of eSports crosses a dizzying array of cultures, socio-economic brackets
and regions. In order to grasp this global appeal, its imperative to highlight the
dynamics of why people enjoy competitive gaming.
One of the most compelling aspects of competitive video games is an uncomplicated
opportunity structure. Whereas physical sports are heavily dependent on environmental
factors, e.g. regional preferences, todays highly interconnected world has abstracted a
variety of barriers for eSports consumption. For one, a fully digital backdrop obfuscates
differences in climatic and geographic conditions. Furthermore, eSports combine key
attractants from physical sports into an easily consumed digital experience; one that
resonates with enthusiasts across the world. As such, individual factors play heavily into
determining involvement and commitment to eSports.

Open doors across the world

eSports is characterized by high engagement for youth across the globe. Unlike
physical sports which require adult supervision and/or significant parental authorization,
competitive gaming is accessible to a large majority of young people on their own time.
Games can be played without expensive equipment, the need for transportation and
coaches/referees. Widespread high speed internet access has driven the popularity of
free-to-play (F2P) games, which have further dismantled (price) barriers for video game
play. And with popular eSport titles available on commodity PC platforms, competitive
gaming is as close to an equal opportunity activity as any in todays world.
Most importantly, the path to proficiency in eSports can be traveled without formal
training. The lack of organization at the amateur level, a perceived weakness, actually
serves to democratize skill development and galvanize engagement levels. Basically,
the eSports opportunity structure is a meritocracy. This is an incredibly important factor
in maintaining a strong enthusiast following as fans feel closer to highest levels of play.
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Even the storylines for top pro players reflect a trajectory thats more relatable for the
average eSport consumer. For example, Sumail "Suma1L" Hassan Syed is a 16 year
old pro player for North American team, Evil Geniuses. Originally from Pakistan, Mr.
Syed moved to a suburb of Chicago with his parents and six siblings. However, his
talents allowed him to qualify to play in an off-season competition for professional
players, after just a few months in the USA. Sumail was then scouted and signed by Evil
Geniuses, with whom he earned an estimated $1.6 million USD in 2015, his rookie year.
Marketing can benefit from this flatter, less hierarchal landscape by capitalizing on
accessibility and built-in affinity.

Motivation
The motivation to consume eSports is framed along lines of active participation and
involvement. Marketers must realize that eSports are more than watching others play,
and avoid casting target audiences as passive consumers. Instead the inspiration to
watch is often spurred by a passion for playing the video game title itself. EEDARs
2015 eSports Consumer Analysis Whitepaper showed that, amongst fans in North
America, improving their own gameplay and watching when unable to play were the
second and third leading reasons to watch eSports. See figure 4, below.

Figure 4 - Courtesy of EEDAR eSports Consumer Analysis Whitepaper 2015

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Likewise, the notion of improving as a gamer is a key motivating factor for eSports
consumption. Where numerous studies show that fans of traditional sports tend to
experience an elevation in mood when their team wins, developing skill is a main
prompt for interest in eSports. When combined with a learning curve that is less
exclusive, e.g. more types of people can attain proficiency; the prospect of learning a
new skill is very attractive. Plus the chance to watch stars exhibit elite skill is a
guaranteed draw for viewers.
Despite an array of leading factors, it isnt entirely clear what specifically activates
eSport involvement. In that light, there is room for conclusive research to reveal more
data points. However, it is clear that physical characteristics and abilities play a very
small role in eSport participation. The emphasis on body types and physical skill, so
prevalent in traditional sports, are basically non-existent in eSports; this represents a
significant opportunity for advertisement content. Since, regardless of the elite skill
exhibited by top performers, competitive gaming does not require deity-like physical
features. For example, people with forms of physical disabilities can effectively compete
without significant hindrance. As a result, wider audiences can be drawn into the
marketing mix.

Entertainment, fun and festival

Video games are already a leading form of entertainment for younger audiences.
Therefore, it fits that the sport narrative drawn by competitive gaming also offers an
attractive form entertainment. However, the revolution will not be televised. In its
place, live streaming is the predominant form of broadcast. Led by platforms like
Twitch.tv and YouTube, television is behind the growth curve. This offers a challenge for
marketing as web-based streaming/video is still an unfamiliar landscape. A new set of
strategies must be crafted to better navigate this domain.
Despite roots in the digital world, live eSports events are valuable properties. Modern
Times Group acquired DreamHack, a leading eSports company and organizer of the
worlds largest digital festivals DreamHack Summer and DreamHack Winter in
Sweden, for $28 million USD. DreamHack runs both local and global eSports leagues,
tournaments and championships. The Scandinavian companys seven live events in
2014 attracted a total audience of over 105,000 people. Live events offer channels more
familiar to marketers accustomed to the traditional sports world, but remain mostly
untapped.
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As the number of eSports enthusiasts swell, expect a significant rise in these digital
festivals over the course of 2016. Regardless of the venue, the challenge for marketing
professionals remains in understanding what compels eSport participation and
consumption. Without this baseline, success in reaching the community will be hard to
attain.

Understanding the Rise of Brands in eSports

As the worldwide profile for eSports continues to intensify, so does the concept of
eSports brand and branding. Whereas most focus has been on the brands outside the
realm of competitive gaming, a clear picture of the brands within the eSports
phenomenon must be addressed. And while assuming equivalence between eSports
and traditional sports brands is easy, its more important to understand the key
variances. Doing so will assist in illuminating related facets of successful eSports
marketing.
Brand is to an organization as personality is to an individual; without it you are merely
the sum of your parts.
Merlin Duff, The Truth About Branding

The power of connection

eSports branding maintains artifacts, central to all forms of branding, including the
names, logos, and symbols associated with a given organization. However, branding is
more than just the manipulation of these visceral marks. In reality, they are a starting
point for triggering other feelings and attitudes toward the associated organization.
Recently this definition has been extended to include other entities outside of
companies or organizations, such as people and individual products. Either way, brands
create an identity, which is central to successful marketing efforts.
Branding encapsulates the thoughts and feelings evoked by recognizing the marks of a
particular brand. Within the context of eSports, this is determined by the experiences of
a given eSports consumer. This is somewhat complicated by the nascent stage of
competitive gaming. In that, eSports does not have the longevity of more established
domains. Still, in a fraction of time, eSports has managed to generate a strong set of
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related experiences for a growing number of its consumers. Expect that set of
experiences to intensify, in parallel to the number of consumers, over the next two to
five years.
In contrast to traditional sports, eSports have evolved without a focus on developing a
marketplace for goods and services. Instead, a committed community of enthusiasts
has buoyed growth. This reality is supported by a strong connection to the wider video
gaming community that an overwhelming majority of eSports consumers ascribe
membership. Basically, most eSports consumers are gamers. These interlocked circles
of connection and identity represent a potent source of affinity, extending past the
spectator angle, see figure 5. Lending eSports brands access to deep, lasting
connections with its consumers.

Figure 5 - Courtesy of The Nielsen eSports Report, 2015

Brand equity
The goal of branding is to achieve a strong image in the consumers mind, doing so
realizes brand equity. A clear definition of brand equity is the net worth linked to a
brand, including assets and liabilities, factored into the value provided by any other
products or services. Yet, achieving high brand equity requires time and effective effort.
Most brands in eSports have not existed long enough to rival the brand equity of
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traditional sports counterparts, like Manchester United or Nike. However, there is an

emerging class with impressive levels of brand equity:

Fnatic Leading eSports organization with professional teams in the most popular
games such as: League of Legends, Dota 2, Counter Strike: Global Offensive, and
more. Its teams are front-runners and consistent winners having been crowned world
champions across multiple game titles. Fnatic's features a roster of players which
represent the brand across the entire globe. The organization boasts over 3 million
followers on social media and is a respected mainstay within the eSports community.

Twitch Probably the most well-known brand in the eSports universe, Twitch is the hub
for eSports content across the world. The site has a general video game focus, but has
emerged as the go-to source for broadcasts of video game competitions. The best and
brightest gaming pros also use Twitch to connect with their fans and supporters. Twitch
has effectively established itself as the pre-eminent platform for connecting
eSports/video game content creators and consumers.

Riot Games Publisher of the worlds top eSport title in the world, League of Legends.
The game, Riots first and only release, reportedly attracts over 67 million players each
month. Riot has engineered a competitive scene by creating a series of world
championship tournaments and regional leagues. The Los Angeles, CA based company
is the de-facto standard for a successful eSport and a model for publishers seeking to
integrate a competitive scene into a game title.

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Figure 6 - Courtesy of eSportsObserver.com

Each of these organizations has built a strong image in the mind of eSports consumers
and realized brand equity. Against the backdrop of a still developing industry, brand
equity has created opportunities to launch new revenue channels and grow various
lines of business. For instance, Fnatic acquired the Swedish manufacturer Func, in
November 2015, to create its own gaming peripherals dubbed Fnatic Gear (see figure
6). With CEO Wouter Sleijffers stating the organization wants to become, the lifestyle
brand for eSports.

The way forward

Regardless of the setting, branding entails much more than managing logos and marks.
Successful brands in eSports create both awareness and a strong image for their
products. These endeavors result in a variety of benefits, including increased revenue
and enhanced customer loyalty. A strong brand will attract sponsors with the potential
that brand associations will transfer image attributes to the sponsor. Case in point is
Coca Colas partnership with Riot Games. Before the sponsorship, Coke was a nonentity in eSports. One year later Coca-Cola was the #1 non-video game brand
associated with League of Legends. As the marketplace for eSports goods and services
takes shape, anticipate strong brand equity to play a major role in determining the
winners and losers.
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Defining eSports Media

As the scope and influence of the eSports phenomenon intensifies, it is critical to
comprehend the role and nature of media within the domain. As is the case in other
disciplines, eSports media is a mediator between competitive gaming events and a
viewing audience. It is also member of the entertainment complex surrounding
competitive gaming, and a key source of influencers. Yet, eSports media remains
entirely separate from general video game media and, unlike traditional sports, is a fully
digital and independent of TV. This is a sharp paradigm shift for most marketing and
media agencies seeking to engage eSports; one that must be accounted for within an
education process.

Painting a bigger picture

Most importantly, the nature of eSports media is part of a larger trend; where younger,
tech-savvy crowds gravitate towards socially connected communities for news,
entertainment and insight. This trend extends past the purview of gaming. According to
a 2015 study from the Pew Research Center for Media and Journalism, more than 60%
of millennials surveyed said they got their political news from Facebook during the last
week.

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Figure 7 - Courtesy of the Pew Research Center

This leaves eSports, a millennial heavy domain, with organically occurring forms of
media. All independent of established (see: corporate) influence. Therein, the role of
fan/enthusiast and member of the media is indistinct. In fact, media personalities in
eSports (journalists, on-camera talent, etc.) are drawn directly from a wider pool of
supporters. As a result, its yet to be seen how/when the professionalization of these
capacities will occur. Regardless of how non-traditional this might seem, it remains a
feature, NOT a bug, of the eSports design.

Community as a cradle
In contrast to traditional sports, there is no established approach to media coverage
within eSports. Widespread standards for journalistic integrity and production quality
have yet to be instituted. In place of polished end-products, the media in eSports is
adept at providing community-owned coverage, which appeals to a highly
knowledgeable and engaged audience. With elements of storytelling and fandom wired
directly into the eSports experience, theres no room for officially sanctioned talking
head types present in other arenas. In essence, media is coverage is made for the
community by the community.

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At first view, this landscape seems to call for consolidation. For example, there is no
central home or leader in eSports media, e.g. an ESPN. In essence, sky-high levels of
accessibility by teams, players and management in eSports allow fans to bypass the
need for centralized media outlets. And while there are individual content hubs,
providing various levels of consolidated coverage, none exist to scale. However, this
scattered nature is reflective of a highly segmented and largely global community. More
specifically, audiences of different eSport titles demand a higher degree of charm
brought by the informality of grassroots coverage. Hence, game title specific forums and
sites like Reddit remain preferred destinations for information and insight.

The faces of eSports media

To put a face on the picture of eSports media today, here are profiles of key people
worth learning about:

Christopher "MonteCristo" Mykles, analyst/eSports team co-owner From beginnings

as a volunteer writer to his current role as on-air analyst and co-owner of a pro team;
Montecristo has been an active figure throughout the League of Legends (LoL) eSports
scene. His tenure even includes a stint as coach for professional team Counter Logic
Gaming (CLG). Having been involved with the LoL scene since before its emergence as
the worlds top eSport , Montecristo remains both a leading personality and respected
figure.

Figure 8 - Courtesy of Dailydot.com

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Duncan Thorin Shields, historian/pundit Thorins career in eSports journalism

dates back to 2001, spanning Russia, Sweden, the USA and Germany. Known for
infusing current events with vibrant historical context, Thorin is an active content creator
across a number of eSport titles. His YouTube presence is a fan favorite, routinely
producing key commentary on issues affecting the world of competitive gaming.

Figure 9 - Courtesy of lol.esportspedia.com

Richard Lewis, journalist/analyst Known for his outspoken and unapologetic

demeanor, Mr. Lewis is a leading eSports journalist and commentator. As a veteran of
the scene, hes broken several notable stories across a number of competitive gaming
communities. Somewhat of a lightning rod for controversy, his talent as a reporter is
oftentimes overlooked. Nonetheless, he continues as a leading example for professional
journalism in eSports.

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Figure 10 - Courtesy of Youtube.com

Soe Gschwind-Penski, commentator/host Ms. Gschwind-Penski is a noted presence

across a number of online and offline media outlets, including German television
channels NRW TV. Her background includes stints as a commentator across several
different eSport scenes. She also hosts events and creates shows for a number of
different media projects. A creative background coupled with professional adaptability
has crafted a diverse career that will only brighten.

Figure 11 - Courtesy of Twitter.com

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An outlook
Outlining the character of media in eSports is a critical step to understanding the
phenomenon, as a whole. Non-endemic marketers and media companies looking to get
involved with the domain must invest in solid education to support a continuous learning
process. Because, despite its highly unique nature, there are a number of opportunities
that still exist. For instance, there are sizable voids in media coverage for newcomers
and casual fans, not yet knowledgeable about the intricacies of competitive play. Expect
this, and other attractive segments, to swell as the profile for eSports increases over the
next 2 3 years.

Predictions for the Future of eSports Marketing

Offline becomes the new online
As an increasing number of sponsors and investors get involved with eSports, the
spectrum of real-world experiences will grow significantly. 2015s acquisition of one of
the worlds largest eSports companies (ESL), by the Modern Times Group (MTG), hints
at the rising value of live eSports events. Along with it, the misinformed consensus of
eSports as an online-only activity is slowly being disproven. Competitive gaming, at all
levels, will become central to a new generation of digital festival. This category of
events will expand, from mostly tournaments between top pro teams, to include a wide
array of interactivity outside of spectating. Look for this to grow the market for
companies like eSports Arena, a new competitive gaming and entertainment complex
located in California USA. Something that bodes well for experiential marketing
campaigns hungry to connect with the eSports community in an offline setting.

Outside investment will continue to outpace regulation

The eSports industry will continue to grow, from an estimated $278 million today to over
$1 billion as early as 2018, according to research firm Newzoo. However impressive
these figures might seem, the lack of industry maturity will continue to mark the next
phase of growth within the eSports domain. Namely, widespread regulation will remain
absent, despite signs that more headway is being made at the national level. Currently
its still infeasible to fund, manage and govern regulative bodies for the competitive play
of video games; especially given the embryonic nature of its overall industry. In turn,
some have placed the onus on developers of popular eSport game titles, a logical but
incorrect position. Video game developers are in the business of ensuring the viability of
their own assets, a stance which oftentimes conflicts with the long term needs of the
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wider ecosystem. Instead, look for organizations like the World eSports Council
(WeSC) to emerge as a galvanizing force for stability.

Mainstream audiences come into focus

The emergence of TV-based products, centered on competitive gaming themes, will
create the first penetration of truly casual (non-gaming) viewing audiences. These
viewers will consume an increasing array of eSports flavored programming including,
Turners ELEAGUE and Clash of Karts: Mario Kart 8 on Disney XD. With the
percentage of casual players and gamers growing, video games are fast becoming a
leading form of entertainment (see figure 12). Along those lines, a familiar distribution
paradigm (TV) and programming format will aid advertisers in better grasping the
appeal of eSports. However, the heart and soul of eSports will remain digital. Streaming
platforms and less structured content (e.g. streaming) will rule for the vast majority of
viewers. Meaning, general misconceptions about video gaming culture will continue to
plague eSports over the near term. Only social proof, gained over time, can address
those hurdles.

Figure 12 - Courtesy of the Pew Research Center

Emergence of brands in eSports

Today, the topic of brands in eSports is centered on pre-existing companies who are
asserting the domain as a marketing tool, e.g. Coca-Cola, Intel, etc. However, increased
institutional investment and growth of additional revenue channels will open the door for
more successful eSport brands. This will be led, mainly, by the rising profile of eSport
team properties. Fnatic is presently at the head of this category with a brand that
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reaches a global audience North and South America, Europe, Asia and followers
from across the world. While marketers are salivating at the prospect of additional wellrun, organized eSport brands; popular with younger audiences and unhindered by
regional affiliation. These entities are not borne overnight. eSport properties in the group
of strong candidates for achieving Fnatic type scale, still face several key barriers. This
includes developing talent at the management level and the lack of consistency across
professional gaming scenes, for players and teams alike. Better professionalization and
industry maturity will aid those attempting to make the jump.

eSports sponsorship efficiency will evolve

Presently, sponsors tend to force fit eSports under the lens of traditional sport. The
Nielsen study, Engaging the U.S. eSports Fan, points to a distinct disconnect between
the motivations of eSport enthusiasts (figure 13) and attempts at engagement by brands
(figure 14). A leading culprit is a misunderstanding of the culture and dynamics driving
the eSports phenomenon. Look for this to change in 2016, otherwise brands risk
missing the entire value proposition represented by eSports marketing. Sponsors will
be presented with the challenge of adapting approaches to measuring engagement of
their target consumer(s), in addition to its effect on marketing and sales objectives. As
eSports moves from emergent to mainstream, addressing the full scope of business and
marketing opportunities becomes absolutely critical.

Figure 13 - Courtesy of Nielsen eSports Report

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Figure 14 - Courtesy of the Nielsen eSports Report

Examining Team Businesses in eSports

The business of eSports is changing. Specifically, the approach to running team
enterprises will undergo drastic changes in 2016. As the number of cheering fans, the
popularity of video gaming as entertainment outlet, and number of corporate sponsors
leveraging eSports as marketing vehicle grows; the eSport team business landscape
will evolve accordingly.

Structure: Gone missing

The recent debate surrounding making player salaries public in eSports can be traced
to, not only a lack of precedent but also, the absence of structure across professional
gaming. The discussion started with a proposal, from Team Immortals CEO Noah
Whinston, for a public database with the salaries of professional League of Legends
(LoL) players. Mr. Whinston, pictured in Figure 15, did stop short of advocating public
salaries as a cure-all for bigger issues, i.e. player representation and unionization, but
didnt shy away from defending his position.
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Figure 13 - Courtesy of Gamespot.com

Without player agents or a union, things are slanted in favor of team owners when it
comes to salary discussions and public information can help level the playing field.
Noah Whinston, CEO of Immortals
Unfortunately, better allocating the growing eSports pie cannot occur without a
structured approach. While factions of team owners, players and other stakeholders are
actively involved in the dialogue, true progress results from organization. Whether this
takes shape as an open committee, organization or otherwise is irrelevant. The goal is
to appropriately define and sustain a better regulated and sanctioned system. This will,
obviously, require input and involvement from the publishers of various eSport titles.
However, the initial impetus need not lie on a Riot Games or Valve. Instead, the greater
community can establish a precedent and pull publishers into the fray.
Currently, leading segments are too far scattered across the eSports landscape for a
meeting of the minds, to occur. There is no overarching body that pulls the sum of
experience(s), perspectives and viewpoints together towards establishing an agreed
upon way forward. While Twitter conversations and Reddit posts are invaluable to the
eSports experience, they are only one part of advancement. The other part is an
ordered grouping dedicated to evolving competitive gaming. The future of eSports team
business depends on this coming to fruition.

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Birth of competitive rivalry

As the stakes for successfully running an eSport team rise, there will be more focus on
developing effective formulas and models. Teams will be compelled to adopt the right
set of best practices and strategies as more feel the pressure or opportunity to improve
position. This will result in the first wave of competitive rivalry across eSport team
businesses, and initiate the progression of more widely accepted management
practices. In contrast to current conditions, where individual teams are focused on
solvency, external moves by other teams will be monitored and evaluated to gain a
competitive edge.
Towards that end, newly formed organization, Team Elemental, has already provided
a blueprint for their planned success; marked by the byline, Better humans become
better athletes. Elementals philosophy for its four eSport teams includes a focus on the
holistic health of its players, regional talent and transparency. Only time will tell how
effective those tenets prove to be, but should Elemental succeed, they will serve as
case study for other teams to emulate. Specifically, how eSport teams view the effect of
proper player development on winning and the bottom line.

The changing marketplace for professional talent

More money is being invested into eSport teams now, than at any point in the past; a
fact that is both positive indicator and cautionary detail. Better paid players will result in
attracting and retaining talented gamers at the professional level. A necessity for the
higher levels of professionalism and competition needed to draw continued nonendemic sponsorship, badly needed within the industry. While no one will argue that
players should make less, there are concrete realities associated with how and why
there are higher salaries.
These teams have millions of dollars and are artificially inflating player salaries in what
is at present an unsustainable business model.
Stephen Snoopeh Ellis, former eSports pro, on the effect of angel and VC funded
teams
Due to the recent influx of angel investor and venture capital (VC) money into eSports
teams these new levels of player compensation do not match current revenue
generation. Consequently, there is a chance they are unsustainable and could harm the
long-term collective growth of the entire eSports ecosystem. The rise in private
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investment levels also threatens to artificially inflate the value of talent, and price
smaller organizations out of business. Investors seek a strong return on their investment
(ROI) and, facing the lack of mature eSports revenue models, could very quickly pull the
plug from multiple teams. This would have a disastrous effect on the overall health of a
still nascent industry.

Examining the future

Teams and their players are at the heart of eSports. As the businesses behind teams
evolve, so will eSports marketing; with the synergy between both reflecting their current
state and future direction. Moving forward, eSport teams must focus on maturing their
business models to match the current rise in player salaries. Other issues must be
addressed through organized support networks that touch both teams and players.
Actions towards that end, especially over the next 12 to 18 months, will affect the
complexion of eSports for years to come.

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