Helping Define the Esports Ecosystems With Data
Last month at the NewFronts, an annual two-week-long event where media companies announce new digital opportunities, Machinima showcased their new creative agency Mach 1. Using data from various sources, e.g. Facebook likes, Mach 1 can now offer advertisers data-driven placement in specific gaming content and build targeted creative integrated into Machinima produced shows.
Machinima is taking a good first step in utilizing social data insights to help brands get a better sense of where to spend most effectively. This will help within the Machinima ecosystem, but not the larger more complicated esports ecosystem including publishers, teams, event organizers and other media platforms.
When talking to brands about entering into esports, there can be a sense of confusion and indecision. Most brands recognize that esports is a place they need a presence in order to reach this sizable, influential, young, engaged and digitally native audience.
Once a decision is made to invest in esports, the biggest concerns include where and how do I invest; while maintaining authenticity and building favorability within a discerning esports community.
Using data-driven insights to segment the entire esports ecosystem for brands is a critical next step towards avoiding negative entry points, developing contextually relevant branded content and long term brand growth.
RIOT Games Announces NA LCS To Use Franchising Model
Last week, Riot Games announced that its North American League of Legends Championship Series (NA LCS) will transition to a franchised model at the end of this year. The initial franchises will come at a price of $10 million and will be chosen through an open application process. The news follows Blizzard’s announcement that their new Overwatch League will implement a similar franchising system, making the two the first leagues of their kind in North American esports.
Seemingly every week we’re experiencing new, groundbreaking developments in the world of esports, but rarely does it carry such weight for the growth and long-term viability of the industry as a whole. While the details surrounding the franchising model remain clouded, the move will undoubtedly bring much needed stability to the North American League of Legends and Overwatch circuits by bolstering investment and creating more economic stability within each ecosystem.
The most apparent consequence of the decision for League of Legends is the removal of relegation system (though it remains in some small part for teams that consistently finish at the bottom of the league), which impacted many teams’ ability to secure long-term sponsorship and investment deals. In addition, the franchising model will aid Riot in attracting committed, professional ownership groups to join the NA LCS. Despite the attention-grabbing price tag of $10 million, it presents an opportunity for investors to secure one of a finite number of slots in the North American league of the world’s most popular esport.
So, with a system in place to provide structure and stability, what’s stopping esports from its seemingly inevitable boom? Well, quite possibly, nothing.
The esports market is young and valuable, with fans showing up in droves both on and offline. Prize pools are deep and getting even deeper. Blue chip brands have already gotten involved and many more are on the way. Global leaders in online streaming have begun a bidding war for exclusive content rights. These facts all point toward imminent global reach and mainstream popularity. Franchising isn’t the silver bullet, but it will have an enormous impact on the industry’s growth and stability moving forward.
ESL to Expand into Southeast Asia and Add Dota 2 Events
ESL will open a new office in Singapore to further support their expansion into the Southeast Asian market. ESL previously hosted ESL one Manila in 2016 and ESL One Genting in 2017. As a part of the announcement, ESL noted they will be adding two additional Dota 2 events. ESL’s CEO believes the move will also help to strengthen local and grassroots tournaments.
This is another move to expand ESL’s global foot print and prove their claim that they are the largest esports company in the world. However, this move will even further fracture the Dota 2 ecosystem. Dota 2 is known for the mad roster scrambles teams experience leading up to major tournaments. This inconsistency in team compositions is bad for team branding, fan allegiances and the health of the esport as a whole. Consolidation of Dota 2 tournaments by one governing body would breed long term planning and security of all groups participating in Dota 2 (players, teams, fans, organizers, etc.). However, this seems unlikely to happen any time soon as CS:GO, Valve’s other marquee title, lives in an even more fractured ecosystem.
Expanding into Southeast Asia is not the problem. In fact, I think bringing quality events to the region will help grow Dota 2 and any other games at the events. However, ESL’s reputation as an event organizer is less than stellar amongst industry members. Some of these event issues were documented in All Work, All Play, a documentary following IEM Season 9. Poor quality events and streams will scare away marketers and other investors, which will then deter others from entering esports as well. The whole industry will suffer from the overreach and poor execution of a few. As long as ESL (or any other tournament organizer for that matter) brings high quality production to region, things should work out fine.