The semifinals of the League of Legends (LoL) Worlds tournament, held in Shanghai over the past weekend (28-29 October 2017), are done and dusted. The two South Korean contenders, SK Telecom and Samsung Galaxy, have won through to the final at the Olympic Stadium in Beijing next weekend, defeating Chinese hopefuls RNG and Team WE in close best-of-five clashes.
Gemba was there, along with representatives from Fox Sports Australia and Cricket Australia, to see first-hand the global phenomenon that is esports, in the biggest market in the world.
After four days of thinking, talking, living and breathing esports here in Shanghai, what have we learnt?
Above: The scene at Shanghai Oriental Sports Center on 28 October 2017, League of Legends Worlds semifinals.
esports fans are no different to other sports fans – just younger
Much of the existing research shows why brands and traditional sports organisations are interested in esports – the fan base is made up largely of under 30 millennials who are proving difficult to reach via traditional marketing and media channels.
Attending the two-day event this weekend, held at Shanghai Oriental Sports Center, a modern 18,000-seat venue between the airport and the centre of the city, reinforced this view.
But apart from the younger-skew of the audience, this felt no different to arriving at any other sporting event. Fans gathered outside, many wearing team colours and logos, and waving flags and signs. Excitement was palpable. Both days featured Chinese-based teams taking on the world’s-best from South Korea, so national pride was a factor, but fans were there to support their favourite team (Royal Never Give Up v SK Telecom on Saturday, Team WE v Samsung Galaxy on Sunday). The top players in each team had their fans too, reflecting a broader trend among Chinese sports fans to idolise individual heroes as much or more so than teams.
[VIDEO] Local favourites Royal Never Give Up (RNG) are introduced to the crowd before their semifinal match-up against South Korea’s SK Telecom. Watch and listen for the reaction as the players walk out onto the stage.
The crowd was almost entirely Chinese in their early 20s, a mix of males and females, fashion-conscious and affluent. There was almost no cosplay or dressed-up attendees – fans wore team gear or regular street-wear. Many without tickets to the event were there simply to soak up the atmosphere, huddled around iPads and mobile phones, watching the live stream from inside.
During the build-up to the matches inside the stadium, fans cheered and chanted as players were introduced, and they rode every twist and turn in the gameplay projected across three massive screens above the stage. Even with a beginner’s level of knowledge about LoL and no understanding of the Chinese commentary, I could follow swings in momentum and get behind the local teams. On both days the locals won the first of each match in the best of five series, creating a great atmosphere of tension and anticipation as the underdogs did some early damage.
In short, these are fans like any others.
Team WE fans cheer as their team takes out game 1 against Samsung Galaxy at the League of Legends Worlds semifinals in Shanghai, 29 October 2017
Don’t get confused by the term “esports”
We’ve all heard the commentary from the margins: “Esports isn’t a sport. Playing computer games isn’t sport. Kids should get outside and play football.”
Frankly, these sorts of comments miss the point. There’s no similar backlash against movies or music – both major passion points for young people globally. Think of esports as a form of entertainment rather than a sport, and the issue dissipates.
Yes, esports has many characteristics of “traditional” sports, including competitiveness, elite talent, leagues, teams, fans, sponsors, tickets, merchandise, and broadcast distribution. And traditional sports organisations are looking at esports from a range of strategic perspectives, including trying to address the challenge of their own ageing fan bases.
This event, in terms of presentation, fan behaviour and business model, was a hybrid of a rock concert, a movie and a sporting contest. The action happens on a screen, like a movie where the script is written in real time. The fans were glued to the big screens throughout, cheering and booing, while the “athletes” themselves were barely visible behind their monitors on stage.
esports fans glued to the action, Shanghai Oriental Sports Center, 29 October 2017
The storyline isn’t known in advance; there is competition, there are consequences, winners and losers, twists and turns, swings in momentum, lulls and big exciting moments – just like in a game of football.
Think of esports as an entertainment product, with a competitive element. If that’s what you define as a sport, then great. If it’s not, that’s fine too. But let’s stop the phoney debate about whether esports is or is not a sport.
Let’s stop the phoney debate about whether esports is or is not a sport
It doesn’t matter what the definition is – esports is a huge passion point for many people under 30 and is taking up a significant share of consumption and spend within the sport and entertainment landscape. (And, unlike most sports, the market is growing.)
Similarities to traditional sports – but some important differences
We are not the first to note the many similarities between the esports value chain and that of traditional sports. Esports can learn much from traditional sporting organisations across a range of issues including commercialisation, talent management, high performance, governance and integrity.
But we have picked up on some important differences that have implications for how traditional media, sports and brands look to engage with and invest in esports.
Firstly, the big esports events that are getting mainstream press are just the tip of the iceberg. Looming underneath is a rich and diverse content and community ecosystemof user-generated content, home-grown stars and amateur broadcasters. Sub-niches – like famous gaming personalities producing videos of themselves playing the latest game and making funny comments as they go, or even cooking shows – are prevalent. Traditional content producers and media companies need to avoid falling into the trap of making old-fashioned sports TV content in the mistaken expectation it will appeal to millennial esports and gaming fans.
Secondly, the consumption of esports content is natively social in a way that traditional sports broadcasts are not. Chat and social are literally built into the distribution platforms (predominantly Twitch and YouTube Gaming in the west, and platforms like Douyu, Huya and Bilbili in China). Traditional broadcasters looking to engage this fan base with content will need to incorporate these features – which means getting comfortable with an unmoderated stream of fan comments and interaction.
Thirdly, the payment and subscriptions model is different. Esports fans are not typically paying a monthly fee to access exclusive broadcast content – most streams, even of elite competitions, are available free across multiple channels. But fans are willing to spend, and this spending behaviour mirrors that of in-game payments that have proven so successful in mobile gaming. “Gaming as a service” is a term I heard a lot this weekend – games that are free to download and play, but in which micro-payments can unlock certain benefits, either in terms of powers or levelling-up within the game mechanics, or for cosmetic upgrades to avatars, exclusive emojis for use in chat, and so on.
Fans also want to contribute financially to their favourite stars and gamers – through direct donations or by contributing to tournament prize pools. While the amount spent may work out similar, traditional subscription media organisations will need to pivot their pricing and offers to reflect this style of payment. Don’t make fans pay to watch exclusive content – instead bundle some content into a package that includes cosmetic enhancements, social recognition, and the ability to financially support the talent they choose. Twitch (via its parent company Amazon) and YouTube Gaming are already starting to do this.
Immature in terms of commercialisation
Every week there are new announcements of brands and sponsorship deals across the esports landscape, but in our view the space remains under-developed.
There was nothing at the LoL Worlds event in Shanghai that stood out as being particularly innovative or even impressive. Participating teams had sponsor logos on their shirts, but these generated minimal exposure, certainly within the venue. Riot Games, the publisher of LoL and organiser of the event itself, had deals with major global brands including Mercedes-Benz and L’Oreal for Men. Mercedes had a reasonable activation on the stadium concourse and some collateral that incorporated elements of the LoL game universe into the creative. They also had a strong presence in the broadcast, with some in-play inventory providing logo exposure, sponsorship of replays, and a model car on the commentators’ desk that was quite prominent.
Mercedes-Benz sponsorship activation stand outside Shanghai Oriental Sports Center, League of Legends Worlds semifinals, 28 October 2017
But certainly nothing we had not seen before at traditional sports events. Ticketing and overall fan experience was somewhat disjointed. Merchandise was available but limited. Food and beverage concessions were also few and far between, with limited range (and no alcohol).
Steady turnover at the merchandise stand, League of Legends Worlds semifinals, Shanghai, 28 October 2017
A constant theme through our conversations across the weekend was the gap between the esports sector, even at this top level, and world-class sports and event management and commercialisation. It’s clear there is much that the esports industry can learn from other sporting and entertainment practitioners.
Traditional sports can learn from esports
Likewise, we think there are a number of areas where traditional sports can learn from esports. While AFL’s Adelaide Crows Football Club was the first Australian sporting entity to invest in an esports team (acquiring Legacy Esports earlier in 2017), and Melbourne City FC have recruited an elite FIFA gamer to play under its banner, we would argue that sports should look to esports not necessarily to invest directly, but certainly to look to what makes it successful as an entertainment, events and media proposition that appeals to young audiences.
Gemba’s Head of Strategy (Asia Pacific) Craig Roberts, and Global CEO Rob Mills, at the League of Legends Worlds semifinals, Shanghai, 29 October 2017