Dissecting Esports — NRG’s growth

I’m a big fan of esports and if you’re like me, you probably want to understand more about the dynamics of this thriving market.

Below you will find my analysis of how NRG has been leveraging social media and other channels to establish itself as a top organisation considering how recently (late 2015) they arrived into the world of esports. I find their growth impressive and wanted to dig into what’s the secret sauce behind their success.

I’m not endorsed by NRG neither have I been paid to write this analysis — so everything written below is purely written because I wanted to do the research, curiosity and love for esports.

I picked NRG because I like them (honestly) and believe they understood early on how to build a reputable brand around themselves, in the scene. I believe they have all it takes to become the next Dignitas or Fnatic. Recently their strategy has been on point, their audience is growing and they are playing all their cards correctly.

Also, I wrote a tl;dr at the bottom of this post, if you don’t want to read the whole thing!


Method of analysis:

We’ll be going through some relevant data — starting with Twitter followers, esports news (direct or indirect mentions), esports performance(tournament rankings ) and then dive into more complex strategic positioning like language used, fan approach and market expansion to understand whether moving from a single to a multi esport organisation has helped NRG become one of the fastest growing esport orgs in the last couple of years.

Growth on Twitter

If Twitch.tv acts as the eyes of the beast, Twitter is definitely the mouth, and it’s a big, fast mouth.

Formed at the end of 2015, NRG has been a rising star in esports. Owning multiple teams, and with a rocketing social reach, its growth is also maximised with a great pool of investors.

12/28/2015

Channel: NRG eSports
Platform: Twitter
Followers: 8,000

2/12/2017*

Channel: NRG eSports
Platform: Twitter
Followers: 54,700
Follower Growth: +433/day
Number of Posts : 13/day
Total Interactions: 2.8k
Interaction Rate: 5.18
Avg Interactions: 218/day
Avg Likes: 178
Avg Comments: 0
Avg Shares: 40

* Using influencer.gg’s platform I could get more accurate data and breakdowns. Check out their amazing tool here.

Over the course of a year (well, 15 months) NRG was able to expand their business in all directions. They went from a single team organisation to a rather successful multi-esports one, signed sponsors and more importantly managed to grow their social following by almost 7 times.

Only EchoFox, another esports team formed around the same time, has grown as fast.

Analyzing their twitter feed from the beginning until today, it is possible to note the following patterns and how they have evolved their approach with the audience.

  • NRG posting style has changed over the course of the year. As an organisation they been always very good at posting updates and pictures of what their players are up to, from their daily life and their competitive side. More recently they have begun to post more game related memes (!!!) and reddit-esque content that is clearly more interesting and engaging to their now larger audience.
  • NRG has increased the amount of tweets sent every day. At the start of their journey only a couple of tweets a day would circulate at most. Their posting pattern also has changed: There is not a single day that goes by where NRG has not tweeted something.
  • NRG announced their official Twitch page on 27th June 2016 and starts looking to full-time streamers to partner up with. Twitch being the eyes of esports, this has been a great way to get more eyes on them.
  • Influencer marketing done right! Currently at its best with Shaq’s endorsements. He clearly has NRG’s back — he openly promotes the team he invested in (as he should). Furthermore the amount of cameos Shaq has done (TwitchCon, ELeague, Whitehouse) has been a fundamental success for the growth of NRG’s audience.

NRG is a Twitter heavy org — their main channel of interaction with their fan base. Their FB channel, however still needs some help (and I have some ideas…maybe next time I can write about these)

Let’s take a look at some I will compare three organisations:

  • FaZe clan: The most followed and discussed multi-gaming organisation (currently) on the web. Started as a YouTube project in 2010, now a multimillion dollar esport machine.
  • SK-Gaming: An oldschool multi-gaming organisation that has been around since the early early days. Founded in 1997 by Quake players now a worldwide known brand.
  • NRG esports: A new gaming org, founded officially late 2015/early 2016

Twitter Followers

Obviously I’m picking Twitter again because I just find it easier to compare things across a platform where all 3 contestants are power users.

As you can see FaZe is just a huge machine crushing both opponents. My guess is that the gaming scene formed around FaZe because of their crushing presence on YouTube.

My prediction is that in 2 years time (at this growth rate) NRG will have an audience as big as SK-gaming’s.

We can see from the data above that FaZe has a huge amount of followers but even though its follower count is massively more than that of SK’s, its total interactions are not proportionate here.

The rate at which the audience interacts with content shared becomes nonlinear
Meaning that although you get more eyes to see what you post, they won’t be interacting as much with it.
This is a generic issue that all brands have to face at some point when their audience becomes bigger and bigger.

This graph shows that when you are an esport org and you post something on your channel, the amount of people liking it (the simplest form of interaction being a tap on the like button) and sharing it (on twitter a retweet or a quote+mention work in pretty much the same way) varies a lot.

If 1% of your followers likes or shares your content, you’re doing great! As a comparison even National Geographic on Instagram has < 1% like rate. Kim Kardashian reaches 1 and 2%.

It is therefore clear to see that FaZe with their large follower-ship will score more likes and shares than the other two organisations — but the interaction to followers ratio remains pretty similar.

You could argue that retweeting and replying are the tougher interactions that you can get from you audience than just liking a tweet — you are probably very right!

Facebook

Just a few words.
Well it seems like NRG isn’t focusing on Facebook (sadly) so there isn’t much to discuss. I believe this year— not having and executing a Facebook strategy is a BIG mistake. NRG should imminently start to focus on Facebook as by not doing so they would lose out on a lot of opportunities.

Media Presence

Just like in professional sports putting your brand out there constantly is extremely important for growing interest, die-hard fans and casual esports followers.

NRG exists because powerful investors understand that esports are an upcoming and fast growing market.

Gary Vaynerchuck has expressed his interest in the esports market multiple times. As we know it, he’s an omni-media visionary with a lot of experience, and he clearly understands how important the esports market will get as time passes. Even NBA stars such as Shaquille O’Neal, who invested in NRG and Rick Fox. The latter took matters in his own hands created his own team (EchoFox).

SHAQ is an investor in NRG

NRG has other high profile investors such as Sacramento King’s Andy Miller, entrepreneurs Justin Siegel and Gerard Kelly and to top it off, baseball legend Alex Rodriguez. Their leadership team also includes ex-Apple VPs and their network of resources backed by their wealth is also huge.

NRG has built teams across a multitude of esports titles, to date 7 titles.

Their most successful investment has been in acquiring a SMITE team who keeps winning over and over!

Due to these expansions and clever leveraging of their network, NRG has ended up on major media outlets such as Espn, Yahoo Esports and many others multiple times.

I did a little bit of digging and was able to map their appearance on the below graph.

In good and bad times, NRG seems to have mastered the art of showing up in the news!

NRG Esports mentions (data acquired using basic Python programming and crawling media outlets)

Media moments of interest

  • March 2016: Shaq Invests
  • April 2016: Kiwikid (community acclaimed LoL player) and Andrew Pruett (CEO) join NRG
  • August 2016: League of Legends squad drops out from LCS, Overwatch NRG team is announced and presented by SHAQ
  • September 2016: Riding the PEA news wave
  • December 2016: SHAQ and NRG’s Rocket League players attend the White House Competitive Gaming Event to raise healthcare awareness

Highlights of their appearances are marked by SHAQ’s investment and involvement in the organisation but also making the headlines for acquihiring many notorious esport players and teams. These techniques have always allowed them to make the headlines in esports, usually as breaking news.

Compared to other brands who appear on the news due to scandals and bad player behaviors, NRG’s brand has mostly kept a positive vibe around their name. Just like their tag suggests it, energetic and steady communication through their ambassadors and sponsors seems to work for them.

Let’s rewind a second: the start of the journey

League of Legends 2016 Preseason

NRG eSports was announced on November 2015. They purchased another team’s spot in the LCS and quickly built a team of talented players imported from Korea and homegrown in the US. The team looked amazing on paper with a few big question marks that later on, after the hype dissolved, revealed to be the major culprits of their losses.

NRG did okay and then kind of bad performance wise, not being able to re-qualify for LCS (the major circuit) they decided to try their luck elsewhere and this is when things start to get interesting.

Expansion into other games

At this stage, NRG has two teams, a CS:GO team that seems to be sitting in the dark (note at this point NRG’s twitter handle was @lolNRG, which says a lot about the focus that management had at this stage of growth) and the League of Legends team that had been performing good at start but not as well as planned later on.

Teams Acquired/Formed TIMELINE:

  • League of Legends: November 2015
  • CSGO: January 2016
  • Overwatch: August 3rd 2016
  • SMASH: August 2016
  • SMITE: September 2016
  • GOW: September 2016
  • Hearthstone: October 2016
  • RocketLeague: October 2016
  • VainGlory: Feb 2017

Other important dates August 2016 — NRG gets relegated out of LCS and drop into the CS circuit and shortly after dropped the whole squad.


Performance

Now that we know what NRG does lets ask ourselves: Does performance affect growth?

As a new organisation NRG understands that the teams they picked up or/and formed need to perform for it to matter. They learned this the hard way with their League of Legends team. For an organisation that still has to figure out a lot of internal stuff, they’re doing well.

I took most of the data below from Team Liquid’s esports wiki and gosugamers.

We know that NRG’s SMITE team is the number one in the world — but how are the other teams doing? Here are a few samples!

Rocket League

A good amount of activity for this team who seems to be doing rather well in their games.

NRG Rocket League squad placements — they’re doing rather fine!

Hearthstone — Rank #9 Worldwide

Some activity shows some mediocre results nothing too extraordinary.

NRG Hearthstone placements — doing ok!

CS:GO — Rank #33 Worldwide

NRG CS:GO results aggregation — lots of spread!

Overwatch — Rank #23 Worldwide

NRG Overwatch: Doing good!

It is obvious that as the teams get more grounded and their performance rises fans will start flocking in!

It is clear that some games have better impact on their social channels than others.

Let’s compare the victory of NRG in Smash

Compared to

and

I picked three tweets from three different teams. The time-frame is as close as possible. The tweets are the same type: They announce a victory of the teams. They all contain an image and the hashtag #NRGWIN
Now let’s analyze:

SMASH: 20 retweets, 118 faves

CSGO: 9 retweets, 54 faves

OW: 35 retweets, 142 faves

Clearly some teams have more traction than others. Personality of the players in the teams and the popularity of a game over another one are extremely important in this.

Who would have thought that NRG’s SMASH squad generates more retweets than CSGO’s squad?

Retweets are a much stronger type of interaction than a fave. A fave is a token of appreciation that symbolizes the acknowledgement of a tweet and the fact you’ve seen that tweet.
Unfortunately I do not have access to the full set of analytics that twitter gives to the publishers/account owners to see how many thousands of people have been seeing those tweets thanks to the mechanics of retweeting.

Sponsors

Running esports teams is expensive.

Paying salaries, living and housing for cyber athletes is just the tip of the iceberg any esport team has to shell out.
To make the pie sweeter there is a clever way: acquire sponsors and partners.

These companies are usually related to the world of esports and will either pay directly a sum of money to sponsor a team or player, provide them with hardware or a mixture of both.

NRG has lined up a bunch of sponsors: Each partner has a precise function and has a particular agreement with the team.

Partnering up with Twitch lets you monetize your channel

No need to explain, Twitch is an important piece of the puzzle, especially when you have multiple esports teams. In fact NRG has been actively recruiting streamers to host under their Twitch partner page as shown by the below tweet:

Hardware manufacturer: Storage, memory, headsets and peripherals
Hardware manufacturer: Too many things to list

If you analyze NRG’s twitter stream Logitech and HyperX keep popping up often— promoting brands on social media is very common in esports. Hardware manufacturers are extremely important and it goes both way: If top players and teams use a certain type of mouse/keyboard/monitor — most of the enthusiastic players will go after the same brand to buy the same hardware. The famous sheep-herd mentality: Consumers believe that buying certain brands will allow them to perform better and be recognized amongst their peers. Well as a gamer myself I also do that (although my bank account gets mad at me).

Computer manufacturer and retailer

Speedy and easy to replace computers are needed if you run a gaming house, or multiple ones. That’s what I believe is the reasoning for this partnership. Find and partner up with a gaming computer retailer that sells and ships all over the country? Check!

Performance Drink

I feel like, in the same way Monster Energy and Redbull are sponsoring big traditional athletes, BIOSTEEL and GFueld are becoming the M.E. and Redbull of esports! I don’t have more explanations for this.

Marketplace for videogame coaches

Finding new teams and players to recruit is hard, NRG isn’t shy of admitting that a lot of their talented players and workforce is directly sourced and screened through algorithms! Good innovative approach there that streamlines a lot of headhunting and manual work.

Conclusions and tl;dr

Esports — Growth vs state of market

In the best scenario possible you’ve got extremely talented individuals, with great personality, a great set of influencers that help you spread the word around your team(s) and great results to show to your audience. This makes sponsorships and partnerships fly in like flies and audience grow like there is no tomorrow.

But that never happens, so you need to play your cards right.

NRG are fresh but have poured a lot of efforts and money in doing the right thing. They will struggle in finding their perfect balance between management styles by having so many teams to keep under control, whilst growing their brand and making more partnership to increase their ROI.
Luckily NRG has a good amount of investors that know what they’re doing from a business perspective. This will definitely help them figure out their personal esport strategy. And hopefully convince them to get back into League of Legends as its one of the largest titles out there.
Overall, esport business strategy is pretty well defined as it mimics a lot of the aspects of more traditional sports — it is harder to get the collaboration of the game industry / esport titles publishers who are holding back (on all fronts) and that directly influences the market’s growth.

Esports— Low differentiation

There isn’t a magic lamp that will create more viable channels to monetize this market.

In business low differentiation means that other businesses can easily copy what you do, either because it’s easy, logical or just profitable.

For many of these organisations it’s hard to step outside of the comfort zone and do something different. NRG has capitalized on two things.

  • Influencer marketing
  • Diversification of investments

Unlike other teams that focus all their resources on one game (maybe for lack of resources? maybe because they have a different strategy?) NRG has understood that having many squads is the key for them, and this strategy is working in their favor.
Brand new organisation, stepping their feet in all the major esport titles and doing good at them.

This allows them to attracts people from different crowds (hardcore FPS player, casual stream viewers, casual players..) and thus also opens their doors to more sponsors and partnerships.

Esports — Monetization whilst growing

Monetizing is hard. As the brand grows different channels appear but they all revolve around the traditional business model that sports has set.
Just like in traditional sports most money comes from sales, sponsorships and partnerships.

Winnings from tournament become less and less important. Popularity from winning is the key.

Esports ROI will happen just like in sports. Broadcasting contracts, sponsorships, ecommerce and ticket sales.
As Twitch and Youtube affirm themselves as esport broadcasting giants, in the near feature it would be possible that attending and watching events will become for subscribers or ticket payers only, just like BlizzCon (an event with arguably very little esport content within) is streamed for $39.99.

Players themselves become brand ambassadors for larger brands once they reach peak. The pioneer of cyber athleticism, Fatal1ty, showed us how to do it and make a living out of this practice.


Hope you enjoyed this analysis — hit the ❤ so others can enjoy too!!

If you have questions hit me up in the comments, I’m not going anywhere! You can also find me on Twitter

If you want me to do more of these, leave a comment and let me know who I should analyze next? I was thinking of Selfless, Apex, Phoenix (as new and upcoming teams) or Fnatic, Dignitas, TSM, NaVi (the big ones).

Kudos for reading and feedback: Ezekiel and Walter
Double Kudos for editing this piece and giving sound advice with my writing:
Tim

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