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Esport Audiences and Communities: The love and the ownership

By Gian Luca Vitale and Koray Anil Akman. The esports audience is growing, and it is expected that this trend will continue. In 2019, the esports audience in Germany reached a new record of 13 million viewers, equating to a growth rate of 3 percent compared to 2018. More and more people are getting involved with the topic due to the ever increasing media awareness of esports. In fact, the ease of accessing esports content is driving this development and will continue to be responsible for it in the future. The evolution of streaming has provided multiple options for accessing esports content.

In the near future, these structures should be maintained so that more spectators and people have the opportunity to discover esports for themselves. For instance, the recent announcement that Twitch will establish a dedicated category for classic sports will attract more viewers. The possible dynamic offers great potential and can provide for new growth events. The question arises, however, as to what monetization opportunities exist for this incredible mass of spectators.

There will be no stopping in the future

With more professional, semi-professional and casual competitions being broadcasted, rising prize money from tournaments and further influencers with entertaining content are leading to changing consumption patterns among players and spectators. Esports is becoming a legitimate sports and entertainment business that attracts both demand and supply with increasing growth. This kind of dynamic is leading to an increase in the competitiveness in esports competition and offerings for the audience. Additionally, the offerings are currently becoming more professional, higher quality and more differentiated across all levels.

The immersive and social character of these formats, and the possibility to interact and participate strongly, is what inspires the younger age group. The high competitiveness shapes the overall gaming scene and increases the tension of the games, which in turn captivates the audience. For example, the League of Legends World Championship was 2019’s biggest tournament by live viewership hours on Twitch and YouTube, with 105.5 million hours. In the esports business, sponsors enjoy much higher levels of popularity than they do in many other sport and entertainment areas. This is to an extent due to the close connection between viewers and players, therefore leading to a strong sense of love, ownership and proximity to the personalities in esports. Esports communities in the western world are closely connected through platforms such as Twitch, YouTube, Discord, 9Gag, Reddit, Instagram and TikTok, as well as their counterparts on the Chinese market. Fans can exchange their opinions, emotions and favorite moments and build social networks. A strong community for an esports title develops its own language and symbols. The success of publishers and league operators is to realize, accept and adopt this in order to communicate with the fans on the same level. Although there may be consolidation in the future on the part of providers or technologies, it is certainly not always the need and demand of viewers.

The possible development path

Product and services within esports are focusing heavily on the interaction between the games and the players. They want to constantly improve the gaming experience by simplifying everything around gaming and esports entertainment. We will see more digital solutions around esports to amplify it as mainstream, making quality of life improvements and enhancing the core game to a more immersive and professional viewer experience. In the future, the focus will be on the even stronger possibilities in networking and personalization. At the same time, there will be more and more simple technical solutions on the market, which will make it possible to develop, adapt and distribute content for truly every type of user. In addition, it is already becoming apparent that integration and deployment to other areas of life, such as digital HR solutions that simplify or map the entire process of talent acquisition, retention and enhancement, is also becoming increasingly common.

Esports is generally very social, physical and event driven. Regardless of COVID-19, there will be more places available for esports, especially at social get-togethers with a mix of music, fashion, food, job education and gaming. The engagement and commitment in esports is limitless. Consumers are looking for more places to be within esports. Every game has its own community, and every community has its own particular language and view on esports, increasing the desire to communicate within the esports community. Esports organizations are already aware of this, and brands are more and more starting to understand this aspect in order to capitalize on it in the future. Even though there is still enough room for brands, it is crucial to respond now in order to reduce the expense of missing out, as costs are rising season by season. Therefore places are created to fulfill the desires of the consumers. The main goal is to gather all enthusiastic gamers—such as esports organizations with their professional players, semi-professional and casual players and simply fans—and create a place that acts as a home where everyone can share their excitement for esports. The use of different technologies, such as VR and AR, serves to provide the spectators an incredible live event. The ability of digital arenas to make the experience even more immersive are increasing with the progressive development of technologies, offering creative possibilities of interaction and space for activation, reach and engagement, especially for brands.

It is important to point out that the audience does not look to esports just for entertainment. For spectators and participants, esports is a part of everyday life, and the increase in demand will cement it in the minds of an even wider audience. Mainstream TV channels have started informing their viewers about the latest topics in esports in recent years. High-profile TV channels are expected to buy media rights to show live events. Presently, these live events are streamed on Twitch for free. The fears of the community are that this will most likely change in the future and be replaced by pay-per-view or subscription systems. However, it is more likely that we will see more freemium or viewing pass systems in this area as well. It will continue to be possible to enjoy content free of charge in linear form. In addition, more offers will be created in the form of micro-transactions to unlock special premium functionalities, special content or immersive experiences. Esports organizations and investors see such options as an additional revenue stream and apparently want to act quickly to ensure profitable long-term investments.

Esports audiences have a high readiness and willingness to pay for entertainment and social value-adding features. The extensive micro-transactions in previous years (€556,6 million in 2019) prove this statement. The fact that Instagram, Twitch, YouTube and others are free enable consumers to pay for esports. Their passion for it leads to increasing prize money at tournaments, which is in some cases provided by crowdfunding among esports enthusiasts. For example, only 10 percent of the prize money for the Dota 2 world championship The International is provided by the publisher, Valve, with the remaining 90 percent coming from crowdfunding.

The future will be about being social and the feeling of ownership

Esports events and tournaments must be easily viewable to transmit the content to the audience. The whole ecosystem depends on the fans being entertained and inspired. If fans are not engaged, the number of spectators will decrease within a short time. Esports titles such as League of Legends have managed to keep both players and viewers excited about the same game for over a decade. The esports titles League of Legends, Counter Strike: Global Offensive, and Dota 2 that have had a tremendously large player base for a very long time are watched more often than any other esports title in the market. There are many different factors determining the success of a game for the esports industry, such as ease of learning, depth to master it, ease of access, ease of understanding, viewability, storytelling ability of the game lore, patch cycle speed or metagame design changes that help avoid routine games.

One way to activate and engage fans for an esports title are direct-to-consumer products. This way, the life cycle of a game can be extended enormously, and the advantage of platforms and games can be virtually guaranteed. The trend toward more direct-to-consumer products, including in-game cosmetics and more viewership options, will become even more important in the future. New products or services would also increase the customer lifetime value and open the door to monetization possibilities. Successful direct-to-customer products and services will center around essential social interaction. More extensive viewership options give fans a closer look behind the scenes or insights into their favorite gamers’ emotional state through interviews and over-the-shoulder cameras. Fans want to be as close as possible to the action, learn from their idols and the pros and take a look behind the scenes. This is where the nitty gritty magic happens and a sense of authentic personalities can be experienced. They want to get involved in these live adventures and get absorbed in the game through the many different personal channels and stories of esports athletes, enthusiasts and streamers.

Such concepts enhance the connection among athletes, talents, fans  and players. This connection is one of the biggest advantages of esports, distinguishing it from many traditional sports and presenting an opportunity to continue driving success in the future. Fans can be close to their idols by chatting with them on Twitch or even playing with them. The authenticity of players has much to do with the link created and developed through communication. Esports professionals communicate a “one of us” mentality to fans. It is essential for esports that players remain approachable for the fans at events such as League of Legends Worlds, Intel Extreme Masters, The International or Gamescom. The professional players are the real assets of a company, and a company can use this as a tool to establish business development activities around its assets through additional services or products. Esports fans are very connected to their favorite games. Successful games and esports titles convey a feeling of ownership to players by giving them many possibilities for adaptation and individualization, as well as a say in the development of the game. This results in a bigger commitment towards the game and helps the game and the esports scene of the game stay relevant and customer centric.

TikTok is an emerging channel for reaching new esports audiences

TikTok, as well as other platforms such as Twitch, YouTube, Reddit and 9gag, have joined the mainstream and provide the esports audience with additional social interaction possibilities. All of these channels create a platform for stakeholders who want to interact with the target group, especially brands. Modern campaigns need to be tailored to be consistent across all of these channels. However, not every connection fits on every channel or platform. Every channel has its distinct audience and ways of communication, as well as strengths and weaknesses. Therefore, it is essential to know the detailed differences between such channels and their optimal use. TikTok, for example, is a way for the fans to connect directly with their favorite teams and gives players the chance to be more approachable while increasing their authenticity. It is important for teams to act fast on these platforms before competing for the potential audience with other teams.

TikTok, in particular, gets more attention among the social media channels. Some of this has to do with TikTok’s algorithm, which is mainly based on artificial intelligence and aims to show users videos that are going viral right now. Hence, even content creators with only a few followers can get a lot of attention with just one video and thereby attract new users to their site. Compared to old social media sites like Facebook, TikTok is faster paced, meaning that video clips typically last only a few seconds. This is important, since TikTok’s main target group is Generation Z, and it is well known that the average attention span is decreasing. In the case of Generation Z, this span is only 8 seconds long. Short esports clips with funny and surprising outcomes are the perfect marketing tool for events, teams and players. It remains to be seen how TikTok will develop further, as it has become the plaything of political power struggles on the international stage. Nevertheless, there has been an allegation of cyber risk and data privacy that is increasingly putting pressure on governments to ban TikTok. Microsoft’s efforts to take over the American business of TikTok are attracting attention. This underlines the relevance for this special segment and its target group.

Contact us

Werner Ballhaus

Werner Ballhaus

Global Leader Entertainment & Media, Partner, PwC Germany

Tel: + 49 211 981-5848

Niklas  Wilke

Niklas Wilke

Partner, PwC Germany

Tel: +49 40 6378-1659

Jens Weber

Jens Weber

Partner, PwC Germany

Tel: +49 89 5790-6711

Gian Luca Vitale

Gian Luca Vitale

Senior Associate, PwC Germany

Tel: +49 211 981-1477

Disht Advani

Disht Advani

Senior Associate, PwC Germany

Tel: 49 69 9585-6120

Koray Anil Akman

Koray Anil Akman

Associate, PwC Germany

Tel: 49 69 9585-1701

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