The Challenge of Sports Games As eSports | THE NEXT LEVEL 007

Manny Anekal
May 24, 2016 · 8 min read

Exclusive: The Challenge of Sports Games As eSports

Story of the Week: This February, Take Two took their first major plunge into eSports by announcing an open tournament for NBA 2K16 with a grand prize of $250,000. This past Saturday, the best 32 teams out of the 92,000 that participated began the elimination phase of the Road to the Finals. In addition to the large prize, press, and promotion; this was happening parallel to the 2016 NBA Playoffs. So how did this Saturday’s live stream perform?

The 27th ranked game on Twitch.

I can’t imagine 2K’s newly launched StreamCast service, which allows viewership on the Xbox One/PS4, would have material impact on viewership. Here’s the comparison against other events and streams at the same time:

What about against a decades old re-run of Julia Child and Jaques Pepin cooking? Barely beats that.

You may point out that Football is more popular than Basketball and you would be correct. The 2015 NFL TV ratings were more impressive than 2014’s record breaking year. The #1 2015 Prime Time TV show was Sunday Night Football bringing in 23M+ viewers on average (viewers actually mean something here). The same week that Turner announced their CS:GO League, Twitch, EA and the NFL partnered for EA Sports Madden Live to be broadcast Friday’s at 12 EST on Twitch and re-broadcast on NFL Network and other platforms.

So, the #1 Sport in the US + Highest TV Viewership + Continued Console Sales Growth + NFL and Twitch Partnership = Big eSport!

Sorry.

Having checked the Twitch broadcast throughout the season, I have never seen more than 4,000 viewers watching the show. Even with promotion across TV, Facebook, Twitter, and Instagram; the audience size is miniscule. Here’s viewership for both the Madden Live Challenge and the show on the Friday after Thanksgiving:

Compare this to Twitch showing reruns of a 50 year old man, on a 30 year old show, painting clouds — which generated 5M+ viewers over 10 days and was consistently averaging 50,000 viewers when I checked.

So what are the challenges in making a Sports game a viable eSport for viewership?

Real Life Is Better

The top eSports titles currently fall into two categories: MOBA’s and Shooters. MOBA’s generally take place in a Fantasy world like Lord of the Rings. Unless you count the Shire in New Zealand, there is no real world equivalent.

Shooter’s generally take place in real world settings, conflict zones, terrorist controlled territory and even previous wars. However, unless you’re a bit crazy, no one “watches war or terrorist events” for fun. If you play a MOBA or Shooter eSports, there is no real life equivalent to the game.

This is completely opposite from Sports games as they rely on the real world to provide the players, events and stories.

Would you rather watch Tom Brady or watch someone play as a virtual Tom Brady?

eSports Pro’s Are The Stars, Not Their Characters

In 2013 at the Intel Extreme Masters in Katowice, something amazing happened. Favored team SK Telecom were looking to close out the game over another top team Fnatic. Then “Xpeke’s Backdoor” happened — or what’s considered one of the Best Plays Ever in League of Legends history (Take :30 seconds and watch it just for the reactions). Now it’s Xpeke that becomes a superstar, not the character he’s playing.

It’s the same reason a 22 year old Call of Duty phenom can make $1M a year, amass 1.6M Twitter followers and make the front page of The New York Times. It’s all about Nadeshot and his story.

When someone does the Odell Beckham Jr. catch in Madden, it’s just a facsimile of the real thing.

The Exception: FIFA

The leader in driving eSports viewership and fan engagement for a Sports game has clearly been FIFA.
I believe there are a few reasons for FIFA’s viewership success:

  • FIFA sells 3X Madden
  • Being the most popular sport worldwide also helps with eSports International viewership — don’t underestimate this impact.
  • YouTube has been a big force in helping drive FIFA fan engagement. Now couple this with Influencers who built their audience on that platform and helped drive FIFA’s potential as a competitive game. KSI, possibly the most famous Sport eSport athlete, has 2.1M Twitter followers and 2nd in Gaming subscribers on YouTube with 12M. He established himself with FIFA vlogs.

And the biggest one of all….

The Sports eSports Secret: Digital Revenue

While other companies tend to tout the massive estimates for eSports (which I’ve repeatedly said are overblown), Take Two is taking a much more pragmatic approach. With all of the hype this year, here’s what they’ve said in just the past 3 months:

And that’s the eSports secret that CEO Strauss Zelnick revealed: No current publisher is generating meaningful revenue through the current 3 main opportunities: 1) Streaming Ads 2) Direct Sponsorship 3) Events/Merchandise. Broadcast rights are almost non-existent hence why no one reveals it.

Now that’s only taking into account direct revenue from eSports. However, publishers are seeing eSports as a fantastic consumer engagement and marketing tool for minimal investment and high ROI. We’ve seen the transition from physical sales to Games as a Service. Here’s how eSports helps drive the growth of that even further.

The top FIFA Twitch viewership tends to be around opening and new releases for Ultimate Team, which is basically digital baseball card collecting with gameplay.

EA revealed last month that Ultimate Team made $650M last year across 3 franchises — and that’s without using eSports components like online tournaments, working further with influencers, and smaller fan based events. Further details on the growth:

I was astounded at how successful EA Madden Mobile was last year. There are ways to live stream on Twitch but I don’t believe it’s a native experience. There’s opportunity there. What if you could watch a Twitch stream on your phone and directly purchase new content in the Madden app? If these work; you’re welcome Peter.

I believe you will continue to see EA and 2K invest within eSports as it’s a great marketing driver for digital revenue.


Dojo Madness Raises $4.5M for eSports Coaching

Berlin startup Dojo Madness raises $4.5M after launching LOLSumo, a League of Legends coaching app, last September.

My Take: I really like this idea for a few reasons:

  • Dojo is starting with the #1 Game in the world which most still don’t realize is played by almost 70M worldwide every month
  • Slick mobile app providing mass distribution but more importantly accessible while looking at a monitor
  • Raised funding after providing MVP and market fit.
  • Potentially the most valuable feature: the ability to pull data directly from the game feed to provide coaching assessments.
  • I’m not a VC nor should 1 potential acquirer be your exit strategy but just consider: 10x return on the raise is a $45m sale — or approximately what Riot generated in 10 days last year.

I’m really interested in eSports building similar infrastructure to traditional sports: coaching, training, health. That’s a hint for what’s coming up in a future eSports Weekly.

ESL Launches WESA
ESL announced the launch of the World Esports Association to bring structure and transparency to the industry.

My Take: Where to even begin?

  • If you’re going to start an eSports league for transparency and the benefit of players you probably don’t want to kick things off by comparing yourself to……FIFA.
  • Don’t say you spoke to other leagues when those involved say otherwise
  • When 1 of the 8 teams you sign leaves after a week due to exclusivity clauses and needs to pay the organization $50k — that’s not a good sign

Enough has been written about the train wreck already. I really like ESL and the efforts they’ve put into eSports (If you know nothing about the industry; watch the documentary on Netflix “All Work, On Play” about ESL. It’s a great beginners guide and it’s beautiful). I’m surprised they missed the mark on this.

London Comic Con to Host Heroes of the Storm Event
MCM London Comic Con is set to host another eSports event with Overwatch, Heroes of the Storm, and Street Fighter V.

My Take: Courageous brands have taken advantage of fan based events like the Comic Con’s and PAX’s for a few years now. As eSports tournaments, teams, and fan engagement opportunities are being planned here, another chance for brands to partner. Look at Bud Light’s example of including Dreamhack, E3, and TwitchCon in their eSports planning (Although I do think with publishers pulling out of E3, that the event is starting to lose shine as a brand vehicle). Fan focused gaming events are a perfect way to get closer to the audience.

SPONSOR SPOTLIGHT: OVERWATCH

My Take: This week we’re going to do something different with Sponsor Spotlight — a look at Overwatch and it’s sponsor partners vs. 1 Brand specifically. This is Blizzard’s latest IP in 17 years and you can see the care and attention put into the game. I’ve been very vocal about my love for Overwatch and believe it will 2017’s eSport of the Year (2016 goes to Rocket League). Even with all of the hype, it’s unusual to find this many brand partnerships for a new game that hasn’t even launched yet. Here’s who’s involved so far:

Outside of the opportunity to partner with Blizzard and get an early seat to a hot new eSport, there’s another secret as to why so many brands are on board: a non-violent Shooter. Overwatch is a fun, cartoon-looking team based shooter vs. fighting terrorists. Even though video game violence is just pixels on a screen, many brands are hesitant to sponsor FPS content (Lets not even start with football).


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Manny Anekal

Written by

esports. Founder and CEO: The Next Level (Media), Versus Sports (Team), and Versus Consulting. Podcast → https://soundcloud.com/tnlmedia

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