ESPORTS & BRANDS. Powered by. Esports, VR, AR, MR and LBE business development for companies around the world.

Transcription

1 ESPORTS & BRANDS Powered by Esports, VR, AR, MR and LBE business development for companies around the world. One of the Fastest Growing Global Industries

2 Esports Overview + Brand Opportunities The secret is out. Competitive gaming is both the world s fastest growing sport and form of entertainment. Advertisers and investors are finally taking notice of esports access to key audiences, with contributions accounting for 85% of the worldwide market which, by the way, reached $1.5 billion in 2017, according to SuperData. Those among us who have never picked up a game controller may scoff, but the reality is clear for those who are paying attention to the numbers. SuperData reported that today, more people watch video games across platforms like Twitch, Facebook, and YouTube than consume content on HBO, Netflix, ESPN, and Hulu, combined. And it s not just viewership the Intel Extreme Masters World Championship 2017, one of the most renowned gaming circuits globally, had more than 173,000 attendees By all indications, esports is here to stay. -Paul Brewer, Vice President of Global Sponsorships at ESL

3 What Are Esports Top 25 Games watched by esports hours on Twitch according to Newzoo 2018 Global esports market report Broad Definition: Competitive video gaming. Extended Definition: Competitive gaming at a professional level and in an organized format (a tournament or league) with a specific goal (i.e., winning a champion title or prize money) and a clear distinction between players and teams that are competing against each other. (Newzoo 2018) Popular Types of Esports Games: First-Person Shooter (FPS) Multiplayer Online Battle Arena (MOBA) Card Games Sport Games Strategy Games Fighting Games Top 5 Esports Games of 2017 (Business Insider based on viewership/ players/earnings): League of Legends Call of Duty DOTA 2 Overwatch Starcraft Most followed games according to 2017 Neilson Report on the 4 key Western esports markets.

4 Current Market + Projections Esports is one of the fastest growing industries. It has shown impressive growth in revenue, viewership, sponsorship, and content creation over the last five years. The industry shows no signs of slowing down. Since the start of 2016, over 600 esports sponsorship agreements have been signed, with the majority of them coming from the IT/computer space. More than 360 IT/ computer sponsorships have been secured, followed by retail with over 100 deals, online services (60+), non-alcoholic drinks (50+) and online media (40+), according to Nielsen. The number of people who are aware of esports worldwide will reach 1.6 billion in 2018, up from 1.3 billion in (Newzoo) Global esports revenues will reach $905.6 million in 2018, an increase of more than $250 million compared to North America will generate the most revenues, contributing 38% of the global total in Sponsorship is the highest grossing esports revenue stream worldwide, contributing $359.4 million in 2018 compared to $234.6 million in (Newzoo)

5 Demographics + Who is Watching Esports is a very attractive industry to non-endemic brands because year olds make up between percent of the market according to multiple reports- the sought after millennial market with the up and coming spenders of the gen z. What also plays into the power of marketing to the esports fan is that the median household income is above average. Mindshare research reports that, Forty-three percent of esports enthusiasts have an annual household income of $75,000 per year or higher and nearly one third (31%) have an HHI2 of $90,000 or higher. Esports fans are known for their passion, commitment to viewership, loyalty, and interest in play themselves. For non-endemic brands there are multiple appealing ways to engage these fans. From product placement in live streams to team sponsorship to league sponsorship the opportunities are open. 61% of esports fans live in households with 3+ people while esports may be their personal hobby, they are part of (and making purchase decisions for) a household/family. (Nielson) 7 in 10 esports fans are male; further, male fans tend to live stream esports content more frequently than their female counterparts. However, nearly 1 in 4 female fans still stream at least weekly. To characterize all esports fans as Millennial males would be far too simplistic. (Nielson) Esports fans are avid streamers who also watch linear TV and are consuming content via all sorts of different screens. Interestingly, female esports fans are watching 15% more TV on average than their male counterparts. (Nielson)

6 Leagues + Competition The ecosystem of esports is a multifaceted one with publishers/developers, league organizers, and tournaments working together to create competitive game-play situations. One of the biggest differences between a pro sports league like like the NBA and a pro gaming league like Major League Gaming (MLG) is, of course, that the latter covers multiple games. (Recode) Every competitively played esports title (game) has at least one official proleague. Some titles (games) have multiple pro-leagues and competitions. Some publishers/developers host their own leagues and championships, while others work with organizations to license their titles. Below Blake Robbins of Ludlow Ventures explains the difference between Organizers and Publishers. This helps to understand how leagues and competitions are created: Organizers: In esports, there are a lot of tournament and league organizers. Most of the organizers listed have direct support from the game publishers, thus they receive assistance with marketing these events. League of Legends Championship Series, LCS, is a unique league as it is directly organized and run by the gaming publisher themselves. For other games, it is quite common to compete in a variety of leagues and tournaments. In Counter-Strike, for example, you will see professional teams compete in ELEAGUE, Dreamhack, Esports Championship Series, ESL, and MLG events throughout the year. Publishers: There are thousands of game publishers; however, for the sake of simplicity, there are only a handful of publishers that have successfully focused on competitive gameplay and reached a critical mass. Publishers play an extremely critical role in whether games will be played competitively as they have full control over gameplay, customizability, and the community involvement. Without publishers, there would be no esports. They ultimately control all intellectual property and have fortunately allowed their gameplay to be streamed and recorded. The international fandom of esports is heavily splintered, and the jury s still out on who really owns it. Is it MLG, wellknown to pro gamers in the U.S.? Is it the Europe-based Electronic Sports League, or ESL, which is preparing to challenge MLG on its home turf? (Recode) League of Legends is an interesting case as the publisher (Riot Games) run all professional leagues and tournaments themselves.

7 Key Publishers + Leagues Publishers Riot Activision Blizzard Epic Games EA Ubisoft Supercell Wargaming.net CapCom Super Evil Megacorp Valve Hi-Rez Studios The League of Legends World Championship is the annual professional League of Legends world championship tournament hosted by Riot Games. In 2017, the finals were watched by 60 million people. Highlights MLG is one of the fastest growing digital networks worldwide, the most recognized brand in esports and pioneer of the competitive gaming industry. Activision Blizzard acquired MLG in MLG currently works with game publishers and developers such as Riot Games, Hi-Rez Studios, Valve, Microsoft, Warner Bros. Games, Ubisoft, Nintendo, and Take-Two Interactive. They host several pro-leagues and competitions. Blizzard Blizzard Entertainment is a premier developer and publisher of entertainment software. Blizzard is a developer of upwards of 20 video games. They host several leagues and tournaments for their games, as well as work with other associations to host leagues and tournaments. Their main esports leagues are for Overwatch, Heroes of the Storm, Hearthstone, World of Warcraft, and Starcraft II. ESL is the world's largest esports company, and the oldest professional esports organization that is still operational. ESL hosts competitions around the globe, partnering with publishers such as Blizzard Entertainment, Riot Games, Valve Corporation, Microsoft, Wargaming.net and multiple others to facilitate thousands of gaming competitions annually. ESL competitors are supported on both national and international levels. Intel Extreme Masters is the longest running global pro gaming tour in the world. Started in 2006 by ESL, the competition features Counter-Strike: Global Offensive, StarCraft II and League of Legends tournaments across multiple continents. Leagues Dreamhack MLG ESL LOL EVO ECS ESEA ELEGUE OWL The International Intel Extreme Masters In 2017, there were 588 major esports events that generated an estimated $59 million in ticket revenues, up from $32 million in (Newzoo)

8 Everyone is Buying into Esports Not only are endemic and non-endemic brands make esports plays, but celebrities, Venture Capitalist, former sports stars, and established traditional sports franchises are procuring teams and sponsorships. For the NBA 2K 18 inaugural season 17 of the 30 NBA teams have started their own 2K teams/leagues. Recently, Twitch broke its record for most-viewed stream by a single player when pro-gamer Tyler Ninja Blevins assembled an unlikely supergroup to play the wildly-popular sandbox shooter Fortnite. Ninja was joined by NFL rookie turned gamer JuJu Smith-Schuster, rapper Travis Scott, and drum roll please pop superstar Drake. At its peak, the stream was trending on Twitter and hit 628,000 concurrent viewers, smashing the previous record of 388,000 viewers for a single-player stream. (The Verge ) Magic Johnson is a co-owner of the investment group axiomatic, which in September acquired controlling ownership to one of the top esports organizations in the world, Team Liquid. Multiple NHL, MLB, NBA, and MLS Franchises are creating or buying esports teams. Musician, record producer, and music executive, Steve Aoki invested in Team Rogue. Former NBA star Rick Fox, owns the esports organization Echo Fox. Shaquille O Neil, Jimmy Rollins, and Alex Rodriguez bought Team NRG. The Philadelphia 76ers, own the majority share in Team Dignitas.

9 Key Teams Many of the top teams are also multi-game organizations. Just how different leagues and tournaments host multiple games, many teams have separate teams for different game titles all playing under the same umbrella name. Key Brand Team Sponsors Audi - Astralis Non-Endemic Monster Energy - Team Liquid, Evil Genuses, Alliance, Team Envyus, Fnatic, and Vici Gaming Red Bull- Tempo Storm and OG Mountain Dew- Team Dignitas, Splyce, and Team SK Gaming T-Mobile- TSM and Cloud9 Visa- Splyce Pepsi s Adrenaline Rush- Virtus.pro Gilette- EDward Gaming Hot Pockets- Cleveland Cavaliers NBA 2K Team (Many additional sponsors are expected to come on for teams as the NBA 2K 18 League kicks off it s inaugural season) Snickers- FlyQuest

10 League of Legends Championship Series (LCS) North America Brand Sponsorships LCS NA is one of the largest esports leagues, LCS NA is a league dedicated to the game League of Legends (LOL). The publisher of LOL, RIOT, hosts all of it s own professional leagues and competitions. We are breaking out the newly announced Spring Season LCS NA brand sponsors as a visual example of how brand can sponsor a specific league.

11 Key Non- Endemic Brands Involved in Esports

12 Breakout of Q Brand Sponsorships Esports is a fast-growing industry with an ever-changing topography of sponsors. Brand involvement is multiplying every quarter and most brands are renewing prior sponsorships. The table to the right is a highlight of brands from the first quarter of 2017.

13 Brand Opportunities Sponsor Esports Leagues & Tournaments Example: In 2016, Mountain Dew, which Pepsico owns, created the Mountain Dew League (MDL), a professional competitive gaming league designed to help amateur gamers become pros. In partnership with ESL, the world s largest esports company, Mountain Dew and E-Sports Entertainment Association League (ESEA) provide amateur gaming teams the opportunity to qualify directly for a place in the ESL Counter-Strike: Global Offensive (CS:GO) Pro League. (Venture Beat) Example: As a part of its sponsorship with the Overwatch League, SOUR PATCH KIDS brand the country s #1-selling sour candy will bring fans content that will air during the Overwatch League season-one livestream. Fans on-site at Blizzard Arena Los Angeles also will be able to enjoy a branded experience, digital-board messaging, branded thundersticks to cheer on their favorite teams, and of course free SOUR PATCH KIDS candy at select matches. (Business Wire) Sponsor a Team or Player Example: Pepsi s Adrenaline Rush brand signed a partnership with ESforce Holding, which owns Russian esports team Virtus.pro. The 1-year deal includes the usual jersey logo across their teams and athletes in Counter-Strike, League of Legends, Hearthstone and Dota 2. (The Next Level Media) Example: Team Liquid has signed its first nonendemic sponsor, Monster Energy. The energy drink maker is working with the team and its players just as it does with extreme athletes around the world. Team Liquid s director of operations, Mike Milanov, told [a]listdaily that the energy drink category is very important to Team Liquid because these companies are sponsoring events and teams around the world. ([a]list) Create Brand Experiences One way to test the waters of Esports is to create branded experiences. As opposed to sponsoring an entire tournament or leagues, these experiences can be on a much smaller scale. From viewing parties to VIP rooms at events to experimental brand installations these are great way to reach fans. Example: Coca Cola s viewing parties which offered fans the chance to see the League of Legends World Championships (held in Los Angeles) in 200 cinemas across Europe, Canada and US in realtime. The purpose was to recreate the excitement and the atmosphere for those fans unable to see the real deal live. (SevenVentures) Content + Influencers Research media company digitalsurgeons on the importance of using popular streamers for brand promotion and content creation: On influencers/streamers: What better way than to let the Michael Jordans of gaming do some of that talking and relationship building for you? Each of these influencers have tremendous amounts of loyal followers, who see them as a source of valuable information pertaining to their favorite esport. On Content: An effective way of getting the eyes of the esports community exposed to your brand is to create compelling videos around the esports they're interested in, where your brand takes a back seat to the content itself. esports fans appreciate the brands who bring them valuable content that is relevant to their interests.

14 Mountain Dew Coca-Cola Snickers Mountain Dew has made major plays in the esports industry. They sponsor an amateur league to help players on the path to the pro-leagues, three proteams, and have an Esports dedicated Twitch channel. Mountain Dew has been a major player in the gaming world since 2003, not only by introducing its signature Game Fuel flavor but by initiating partnerships with popular titles, systems and gaming platforms such as Twitch. Mountain Dew will continue to push boundaries and explore new territories in gaming to be able to provide casual, amateur and professional gamers with unique experiences, trainings and opportunities. (Mountain Dew Press Release) Mountain Dew and Immortals just announced their landmark deal! They are planning on an array of digital and live activations, including extensive programming on Mountain Dew s Twitch channel. Immortals players from multiple games, including Super Smash Bros., Dota 2, and the newly announced Immortals Mobile division, with teams in Arena of Valor and Clash Royale, will be prominently integrated into Mountain Dew branded esports events, including Dew Tour and Mountain Dew League, currently in its third year of operation. Coca-Cola is another huge player in the esports world. Coca-Cola does not sponsor any teams, but supports multiple leagues, tournaments, live fan events, and content creation. Coca-Cola has a global head of esports and is dedicated to the growth of this sector of the market for their brand strategy. Coca-Cola s Twitter engages over 354,000 followers each day, growing by 100,000 in just a year. The soda giant sponsors the League of Legends World Championship, one the largest esports competitions on earth. But to take it a step further, Coca-Cola and Riot Games partnered with some cinemas to host more than 200 simultaneous viewing parties for the 2016 League of Legends World Championships throughout the U.S., Canada, and Europe. (Business Insider) Coca-Cola s head of global esports, Alban Dechelotte told [a]listdaily that, from a brand perspective, there s a greater ability for brands to be on stage in esports than anywhere else in gaming in the past. Fans love that Coke is engaged with them and recognizes the popularity of esports, Dechelotte said. They love being invited to live events, whether it s through an activation in movie theaters for League of Legends or connecting with fans live at the League of Legends world championship which we see as the Super Bowl of esports. Snickers is a great example of another nonendemic brand moving into the world of esports. They made a splash in 2016 when Snickers became a sponsor or Eleague. Snickers was an official marketing partner with Turner and WME IMG s joint esports venture. As of March 2018 Snickers is the official sponsor of season 5 of the Rocket League Championship Series. Earlier this year in Jan. 2018, Snickers announced it will be sponsoring team FlyQuest for the 2018 North American League of Legends Championship Series. The team will have the Snickers logo on their jersey s. In addition speculation has been made that the team will create lighthearted fan-based content that will more than likely be released under the Snickers name.

15 Target Audience = Loyal Consumers for Life As stated previously, esports hits the sought after consumer demographic of Millennials and is set to appeal to Get Z. With the right approach brands can gain loyal consumers at a young age through esports and keep them for life. Gillette and Dollar Shave Club both recognized the potential in sponsoring esports teams, leagues, and tournament. According to multiple online sources, Most young men start shaving around the age of 15. The Next Level notes, Assuming a life expectancy of 80, that s 65 years of potential revenue, with a ridiculous LTV (Lifetime Value) and makes sense for CPG Brands to invest in esports with its core male audience. According to a study by Statistia released in 2018, in 2010 Adults age were the highest percent of consumers of chocolate. This age range is the main demographic of the esports market.

16 Why Non-Endemic Brands Should Jump Into Esports In esports, Coke and Red Bull have been the innovative non-endemics who were first to market and have led in helping grow the scene. The first questions we are usually asked by non-endemic brands looking to invest in esports are what other brands are involved?, what are they doing? and who is doing it well and what examples can you show me?. This was no different to cycling in the UK 10 years ago. -Malph Minns, founder of Strive Sponsorship, which specializes in sport, music, esports and film partnerships. The gamer stereotype is outdated and this audience is one that brands should covet. According to Nielsen s latest Total Audience Report, average household income for esports fans is nearly $65,000, which is greater than that of some major sports leagues, including NASCAR and MLS. This consumer is educated, employed, incredibly savvy, and has no geographical limitations. (Huffpost) According to ESL s 2017 achievement summary they had Non-endemic revenues grow from 17% to 28% of total sponsorships for ESL. This trend isn t new to 2018 since it s technically already happening. Companies like BMW, Mercedes-Benz, Jack in the Box, Intel, Snickers, Coca-Cola and others are diving into the space, innovating across an industry that has already generated $1.5 billion in 2017 alone. At this rate, esports is projected to bring in $2.3 billion by 2022, according to statistics company SuperData. What we will see in 2018 is the accelerated pace of new brands entering the space and the sophistication and reach of these partnerships. No longer is the market so fragmented that brands can t get a good read on their ROI. Stability and projected longevity from entities like Overwatch League and Riot s League Championship Series will offer brands more visible, global, robust platforms from which to activate and leverage their sponsorships. (Taylor) Turtle Wax, a brand which has absolutely nothing to do with competitive gaming, has paved an organic path into the space by way of their team partnership and content creation, and continues to reside naturally. (Huffpost) Chipotle went from outsider to fan favorite in record time, because its involvement was genuine, and now Chipotle is a new endemic in the space. (Media Post) What has me surprised me at Super League the most is how many nonendemics want to talk to us about our youth product. It validates that so may brands want to get on esports and talk to mainstream gamers, but don t have a lot of positive access points to reach them. Super League s super accessible wrapper around gaming and gamers provides that marketing channel in a way that is low risk for a brand. - Ann Hand CEO Super League Gaming

17 Louisa Spring Ms. Spring is an accomplished C- level executive in immersive media and gaming. Entrepreneur, gamer, lawyer, producer, she has moved the needle at every VR company she has worked with including facilitating deals with Intel, Oculus and Walmart with Spatialand which resulted in a successful acquisition. Ms. Spring has worked on award winning VR campaigns for Mini-Cooper and NYTVR, the award winning game Firebird: La Peri and other PC and VR games around the world. As a TV producer Ms. Spring has worked with Far Moor, (successfully acquired by Endemol), and William J. Macdonald, (Rome) as well as representing Sir Roger Moore, John Rhys-Davies and Christopher Judge. She's a former member of the board of BAFTALA, and practiced law in London. Judge for the AICP Virtual Reality Awards 2016, speaker on Virtual Reality and Storytelling at the Silicon Valley Virtual Reality Conference 2016, Silicon Valley Comicon panel on VR 2016, moderator of Women in Virtual Reality at Digital Hollywood 2016, 2017 Spring and Fall, speaker at AWE 2016 on storytelling and VR, organised inaugural Women In Virtual Reality for Women In Film. Judge VR FEST 2018, speaker at VR FEST 2018, moderator at Amusement Expo 2018.