The Franchise Era Takes Hold
The Franchise Era in esports is finally underway, with both OWL and NA LCS starting competition with organizations that will have durable, lasting places in those ecosystems. The hope here is the Franchise Era creates the stability and longevity necessary to sustain further investment into and monetization of, professional esports.
We’ll let the pundits, or more specifically the esports community, collectively decide if January 2018 is a demarcation point worthy enough of its own name to signal the beginning of what I’ll call, for the purposes of our modest Meta Report, the “Franchise Era”. To be sure, the two dozen or so organizations that comprise OWL and the current iteration of the NA LCS, aren’t franchises under state law, but these permanent partnerships are designed to effectively operate like most conventional North American sports franchises.
The newer kid on the block, OWL, kicked off the Franchise Era to much fanfare and high expectations from all stakeholders. The Catalyst office contributed at least 4 viewers to OWL’s impressive 400k+ streams at its peak on Twitch. Apropos of nothing but a personal aside, as someone who doesn’t play Overwatch, the game itself is hard for me to follow as a viewer and despite what were obvious spectator improvements, I found it hard to stay engaged for more than a few short bursts. Nevertheless, throngs of people tuned in on Day 1, and while second week viewership for OWL understandably dipped, peak Twitch viewership in the 150k range is perfectly laudable and hopefully, sustainable as OWL settles into a routine.
Riot’s NA LCS launched its 2018 season this weekend, replete with a handful of new teams competing in their inaugural seasons. Riot shifted the format away from best of 3 to a single game format, ostensibly to make the product more viewer friendly. Viewership was predictably solid, peaking with just over 300k on Twitch, with hundreds of thousands of others who consumed via other platforms. The excitement was palpable with TSM v. TL stealing much of the headlines, but other matches featured newbies from the owners of the Golden State Warriors, Cleveland Cavaliers and Houston Rockets.
The ownership profiles of these newly franchised teams look vastly different than their predecessors from years past. The influx of investment injected into OWL and NA LCS should engender the stability necessary to finally have monetization of the esports audience fulfil its promise. The belief here is the Franchise Era marks a watershed moment in the evolution of esports; we should see more non-endemic sponsors get involved, confident that the brand equity they are leveraging from esports teams and leagues will be stable, secure, lasting and therefore, valuable.
Four Major Non-Endemic Sponsors Enter Esports
Within the last week, four large non-endemic brands launched campaigns in esports. Rocket Mortgage by Quicken Loans, Dr. Pepper, Toyota, and State Farm all kicked off esports programs, signaling a warming up of non-endemic brands towards the competitive gaming space.
Will 2018 finally be the year the proverbial floodgates open? With year-end budget approvals and newly pitched marketing campaign plans taking effect in the first few weeks of the year, the sign is ‘so-far-so-good’. The four new brands are taking different approaches towards the space, but each has shown — in their own way — a desire to advertise to the lucrative and hard-to-reach male millennial segment.
Rocket Mortgage by Quicken Loans announced their campus partnership with 100Thieves — the esports organization founded by Matt “Nadeshot” Haag — with a well put together house-tour video showcasing their sweet LA house. The partnership was made undoubtedly easier by the fact that 100Thieves recently took on investment by Dan Gilbert, founder and owner of Quicken Loans, yet the execution of the video (which has 400k+ views in 5 days) alongside the house itself, which resembles a celebrity residence more than a gaming team-house, seems like a win for the brand upon entry into esports.
The second brand that entered esports this past week was Dr. Pepper (disclosure: Catalyst represents Dr. Pepper in esports). Interestingly, this was actually Dr. Pepper’s return to esports, as the brand was an early participant in 2008, working with MLG to sponsor events and team houses. With massively successful ongoing College Football campaigns, the brand decided to re-enter esports and target gamers in a big way, sponsoring Team Solomid (TSM). The kick off saw the brand release a humorous 20 second spot on Twitter juxtaposing players on TSM’s League of Legends team with cans of Dr. Pepper. The TSM and broader LoL community took the piece to heart, welcoming the brand back to the space warmly.
Toyota and State Farm are two of the biggest advertisers in North America, and to see them enter esports is a really positive sign. The brands decided to go the fairly safe route of sponsoring league broadcasts of Overwatch League (Toyota) and North American LCS (State Farm). Toyota is the North American launch partner for OWL, and in addition to broadcast integrations, will have a vehicle presence at the Blizzard Arena in LA. State Farm is sponsoring the NA LCS Analyst Desk, while also having a significant on-broadcast presence. The State Farm partnership encompasses Worlds, Mid-Season Invitational, and All-Stars. Both brands issued broad statements about how the look forward to becoming a part of the esports community, but how they activate in the space beyond just attaching their logo to broadcast is yet to be seen.
These are exciting times for the growing esports industry as more mainstream brands embrace the competitive gaming community and invest in marketing efforts within it. Our hope is that these partnerships show the growth of this nascent space and more blue-chip brands enter esports in the coming months.
New Esports social platform in the works by FanDuel Founders
A new social streaming platform for esports is in the works called Flick. Similar to Twitch, this mobile application and online platform will be a new way to watch gaming content and share it with friends in the community. Nigel Eccles and Rob Jones did an impressive job with the development and growth of FanDuel, a leader in the fantasy sports realm that has been in heavy competition with DraftKings. It will not be an easy task to market Flick on the same level as other leaders of streaming platforms for gaming, but these executives have a decent blueprint.
Flick is based in the capital of Scotland, Edinburgh. This is also the same location Fan Duel was founded and became one of the first billion-dollar technology companies in Scotland. The co-founders will give initial funding but they are planning to announce the first round of venture funding in hopes to raise a few million British pounds.
While the founders have provided minimal details about how Flick will differentiate itself in a crowded streaming platform market, there is definitely an opportunity for the mobile streaming experience to be improved. Given the size limitations of smart phones compared to PCs, watching esports on a mobile device while trying to keep up with the chat is an overwhelming endeavor that can’t compete with the traditional viewing experience. To circumvent these restrictions Flick will have to offer innovative solutions to truly differentiate their product, like possibly focusing on a different type of content or redefining the role of chat all together.
As video viewing continues to trend away from PCs and towards mobile, there is an excellent opportunity for Flick to capture this audience where they traditionally consume video content most.