Influencer Marketing

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The huge opportunity for influencers in Esports

The future of Esports is in their teams; where teams use technology and marketing to own their audience in a way that traditional media companies have never done. There is absolutely no question that Esports has unbelievable potential. The audience is massive and growing. The dollars are flowing like crazy. But the traditional model is fundamentally broken. Now, by allowing teams to take ownership over their own audiences, they can take Esports to heights we haven’t even dreamed of yet.

Video games are the most dominant force in media.

Audiences are playing more and more games and Esports is growing along with that trend. In an interview with Reed Hastings, the Netflix CEO, he commented that Fortnite, the Battle Royale game produced by Epic Games, was more of a threat than TimeWarner’s HBO. YouTube had an outage back in October and the Netflix viewership and signups spiked in that window. Will mosty likely surprise you to know that the #1 most valuable franchise in the world is Pokemon, which is primarily a video and card game, at a $95 billion dollar value. On the heels of pikachu, Mario is #9 at $35 billion narrowly beating out the Marvel Universe ($35b) and Harry Potter ($32b).

With so many people playing these games and investing their leisure time, it makes some sense that they would also consume content this way. Esports is huge, and the opportunity for Influencers within it is enormous; both the audience and the revenues are growing quickly.

Sponsorships are the primary way that teams make money.

Roughly 80-90% of revenue from large Esports teams comes through sponsorship revenue. This is incredibly problematic because of the pre-existing eco-system.

Esports content creators exist in one of two places. Either they are large content creators on Twitch or YouTube and spend the majority of their time marketing themselves (Tfue, Ninja, Shroud, DrDisrespect) or they are top competitive players on Esports teams and they spend all of their time exclusivly focused on being the best player and teammate they can be. There actually isn’t a way to do both. Top streamers like NickMercs and Ninja are huge content creators and both didn’t qualify for the Fortnite cup final. DrDisrespect and Summit1g didn’t even bother trying to qualify and Tfue is the only big streamer who even placed at the Fortnite Cup solo event (he finished #67).

Now ask yourself to name the top five finishers in the solo event Fortnite Cup: Kylre Giersdorf (Bugha) was first and the only one of the top five with any real audience. Harrison Chang (Psalm), Shane Cotton (EpikWhale), Nate Kou (Kreo) and Thiago Lapp (King, who was 13 at the time) round out the top 5. All of these players' audience on Twitch put together doesn’t equal half of the other creators previously mentioned.

So what does this all mean? Who ultimately cares if the best streamers are the biggest? Unfortunately, Esports teams are running the traditional Esports hype train telling people they want to be the best in their game, but unlike regular sports, that isn’t how influencers in Esports get the largest audience. Since sponsorship is a huge part of their revenue, their reach is critically important. That reach is typically defined as the reach of their players and their own team social media (often much smaller than the players). Player brand recognition is still an important element, but most sponsors ultimately just care about  your total reach.

In the traditional model, the teams don’t own their audience and thus don't even own their own reach. As a point of reference, Tfue was on FaZe Clan and at some point, he decided he didn’t want a team between him and his sponsors. So he publicly divorced the team and sued to get out of his contract. As a result, FaZe clan went from being the #2 team for minutes watched on Twitch (700m+/mo) to the #9 team on Twitch (sub 300m/mo). An astounding 60% drop. Historically, the teams don’t own the audience, the IP or even their reach. This causes enormous problems in monetization moving forward.

The future of revenue for large streamers and Esports teams is about the ability to own the audience.

When you have a launch like Apex Legends, it becomes apparent that any game launch or content patch needs to incorporate an Esports or large influencer strategy. And that is the point. Historically, there existed this ridiculous notion that treating Esports like traditional sports was the way to the promised land. We even assigned cities to Overwatch teams in an attempt to copy the traditional sports model; it simply isn't working. Esports brands are global and build audiences based on entirely different models that traditional sports.