Earlier this month, renowned venture capitalist and trends analyst, Mary Meeker released her comprehensive, annual Internet industry overview. The report contains a treasure trove of data and analysis on multiple trends, a number of which will affect complexion of the global eSports marketplace, in some form or another. As the first half of 2016 winds to a close, let’s take a look at four trends, inspired by Meeker’s work, which will shape the eSports landscape moving forward.
Voice + Gaming = The Future
Growth rates for smartphone penetration are showing signs of slowing (+21% vs. +31% Y/Y) as mass device saturation nears. However, mobile device interfaces have only begun to evolve. Improving voice recognition technology is changing the way humans interact with an increasing array of mobile experiences, of which gaming is a leading form. While overlap of Virtual Reality (VR) and gaming has generated the lion share of buzz, integration of voice interfaces offers some interesting possibilities.
In five years time at least 50% of all searches are going to be either through images or speech.
Andrew Ng, Chief Scientist, Baidu (September 2014)
For example, Amazon is making waves with Alexa – an in-home, virtual assistant – that accepts voice commands. With 35% of viewers for Amazon’s Twitch coming from mobile, embedded voice-enabled technology could transform the way this growing class of user will discover, view and interact with content on mobile devices. As the technology improves, voice command will further impact the competitive gaming experience; with game developers using the technology to integrate microphones into real-time user interfaces, alongside the keyboard and mouse.
Branded media matters
Results from the Unruly Future Video Survey in July 2015 showed awful responses to online video ads. A whopping 93% consider using ad blocking software while another 81% mute the ads altogether. Additionally, adblocking user rates are soaring: ~220MM (+16% Y/Y) on desktops and ~420MM (94% Y/Y) on mobile; further indicating the diminished effect of pre-rolled ads. Advertisers targeting digital natives like eSports audiences must embrace the value of branded media, created through partnerships with competitive video game organizations.
Even as an increasing number of brands allot sponsorship spend for eSports events and teams, content creation remains a key marketing tool. Opportunities around storytelling – gaming organization Echo Fox is teaming with Propagate and INE Entertainment for an unscripted documentary – are particularly impactful as eSports features a lower threshold of polished media than do traditional sports. Plus, a steady stream of video content already emanating from eSports organizations serves as a readymade canvas for creative brand integration and extensions. Check out the HTC eSports channel on YouTube for specific examples.
The 21st century democratization of digital production and changing nature of content consumption, see: more people watched the MTV music awards on Snapchat than on TV, has birthed an invaluable angle for more organic forms of digital video. Accordingly, media production partnerships with eSports teams – aimed at creating branded, but relevant, digital content – are worth serious consideration. Partnership with these organizations, and their players, affords non-endemic brands an authentic avenue to highly sought-after audiences.
Facebook Live vs. Twitch
Announcement that Blizzard will enable players to livestream gameplay to Facebook has generated a fair amount of buzz. Mostly to the tune that Twitch.tv, the unquestioned leader in video game livestreaming, should be on alert. Coupled with Facebook’s hiring of former eSports pro player, Stephen “Snoopeh” Ellis, the intrigue is understandable. Yet, the reality is Facebook Live isn’t actually a direct competitor for Twitch; rather it is vehicle for a new category of live broadcasts.
At its core, Facebook Live is an Application Programmers Interface (API) – or set of instructions that allow other apps to stream content that can be consumed via Facebook. Basically, the API allows apps to create a “Go Live” feature for users to stream using Facebook credentials, all without needing to set up an account on a platform like Twitch. Consequently, Facebook Live’s “ease of stream” will be attractive for a certain profile of user:
Figure courtesy of Candace Payne via Facebook
- Publishers, like Blizzard, keen on tapping into Facebook’s network with shareable in-game streams – a valuable marketing tactic for new titles like Overwatch.
- Athletes, celebrities, sports and media properties will benefit from a new outlet for fan interaction. This category does, however, include eSports teams and tournament organizers, most of which already maintain a presence on Facebook.
- A long tail of Facebook users who will gravitate towards a seamless channel for spontaneous streams, i.e. The Chewbacca Mask Lady, or to share creative content – music, art, etc.
Still, there are some who feel Facebook’s savvy will challenge the Twitch monopoly on livestreamed gaming content. However, the Amazon-owned service already has numerous competitors, including the Google-backed YouTube Gaming, none of which have been able to capture more than a sliver of market share.
Rather, the secret sauce to Twitch dominance is powerful community features tailored towards gaming entertainment; an area that Facebook Live isn’t specifically designed to create. So despite intriguing parallels between the two, they will ultimately appeal to mostly different segments.
The future of 24-hour eSports TV
Launch of two 24-hour eSports channels further highlights how quickly the tide has turned in favor of competitive video game content on linear TV. Sky and Virgin Media-backed, Ginx eSports TV has already gone live, with Electronic Sports League’s (ESL) esportsTV! still awaiting debut. However, it’s a new wave of over-the-top (OTT) TV services that offer the most promise as home for 24/7 eSports channels.
A shifting media landscape, driven by the rise of online video content and on-demand services like Netflix, has altered the prospects for all varieties of 24/7 niche channels. Traditional sports are essentially the only remaining entertainment category that demands live TV viewership, hence the trend of pricey broadcast rights deals. Even still, the value of live viewership fizzles outside of competition, leaving niche networks pondering the point of maintaining around-the-clock programming.
- National Football League (NFL) – $5.3 billion USD, 2014 – 2022
- Premier League – $2.6 billion USD, 2016 – 2019
- National Basketball Association (NBA) – $2.6 billion USD, 2016 – 2024
- Major League Baseball (MLB) – US$ 1.5 billion USD, 2014 – 2021
- National Collegiate Athletic Association (NCAA) – $ 740 million USD, 2011-2024
Sling TV’s International Sports Channels
24/7 niche eSports channels are further swimming against the tide of its fans’ multi-platform, time-shifted viewership patterns. Plus, the concept of a TV channel is literally being reconstituted away from linear models, just as eSports arrives on the scene. Hence, the future lies in adding channels like esportsTV! and Ginx eSports TV to new alternative TV packages like Sling TV, which stream live TV over the Internet.
Why? Well, platforms like Sling are already offering a range of lower-tier sports content from across the world, a lineup in which eSports would fit well; all without a drastic raise in the service’s base rate of $20 USD per month. These packages would enable eSports consumers to rationalize costs for premium, 24/7 gaming content with a selection of other channels, minus the burden of a cable subscription. Internet TV services would also provide an ideal home for eSports channels to reach more receptive casual audiences – far less distracted by an overwhelming number of cable programming choices.