The roles video-game publishers play in the esports ecosystem must be among the most labour-intensive and expensive contributions made to the competitive-gaming sector.
And The Games Publisher’s Guide To Esports, an exclusive White Paper produced by GamesIndustry.biz for Esports BAR, should be read to understand publishers’ financial and creative involvement in esports.
They fund each game’s creation; they acquire or contract esports players and teams; they hire esports-content creators like the streamers and vloggers; they appoint experts to host venue-based and live-streamed tournaments; they pay for the marketing budget; and they have duty of care for all parties linked to the company’s esports activities. The costs add up quickly.
The White Paper, which could easily be sub-titled How To Succeed in Esports – A Publisher’s Guide, provides instructive keys that could unlock a host of potential commercial opportunities for publishers in the still-to-mature esports industry.
Esports for marketing
Until recently, the vast majority of games publishers saw esports as a marketing opportunity to raise awareness for their video-game titles among gamers.
However, that outlook was permanently changed with the launch of Activision Blizzard’s Overwatch League (OWL) in 2017.
The way the world’s biggest video-game publisher used OWL to professionalise, structure and commercialise its esports interests raised the bar for other publishers to emulate.
The education to gain from The Games Publisher’s Guide To Esports is summed up in the advantages and disadvantages publishers can expect in the still nascent but rapidly advancing competitive-gaming industry.
Advantages for publishers
- Using esports as a marketing tool still makes sense. The estimated US$160bn** global video-games market might be bigger than the global recorded-music business (worth US$20bn)**, the global live-music ticket sales (US$22bn)** and the international cinema box office receipts (US$42bn)** combined. But the gaming world alone is so fiercely competitive, the use of esports to boost sales will never be a waste of time.
Note: ** Sources are Newzoo, IFPI, PwC, Comscore
- Media rights sold to streaming platforms to host live esports tournaments, plus the related ticket sales, merchandise retail, advertising, sponsorship and licensing fees, delivered a healthy US$900m in 2018. And the demand for media rights continues to expand.
- Fans spent a whopping 240 million hours watching Riot Games’ League of Legends (LoL) esports between January and October 2018. And the number of those viewing hours has only swollen since, not only for LoL but also its rivals, including Valve’s Counter-Strike: Global Offensive (CS:GO) and Epic Games’ Fortnite Battle Royale.
- The White Paper also notes that those who played EA Sports’ FIFA titles for esports were five times more likely to keep playing them as a game than those who didn’t play esports.
Disadvantages for publishers
The Games Publisher’s Guide To Esports does not hide the fact that publishers need very deep financial pockets to invest in esports.
Riot Games coughs up US$100m-plus annually to develop its very successful esports entertainment events and content. Psyonix, the games developer that is now part of the Epic Games group, had spent a significant US$2.5m by 2018 on the esports edition of the much smaller Rocket League game.
And like all commercial creative ventures, having an international best-selling game that a developer or publisher converts into an esports tournament does not guarantee success or profit. Ask Daybreak Game Company, maker of the H1Z1 game, which has been renamed Z1 Battle Royale.
Plans to launch an esports competition centred on the H1Z1 Pro League collapsed halfway through its first season when the organisers discovered it did not generate enough interest to justify the cost.
Going forward stronger
As the White Paper demonstrates, setbacks have not diminished the revenue-generating prospect seen in esports contests, esports events, esports content and esports entertainment.
Games-publishing goliath Activision Blizzard (owner of the Overwatch and StarCraft esports) has turned the OWL into a lucrative franchise-based league by persuading esports organisations and teams to pay US$20m-plus to join.
Add Epic Games (Fortnite), Riot Games (LoL), Valve (Dota 2 and CS:GO), Microsoft (Age of Empires 2) and Jagex (RuneScape) and you can see how the major publishers are prepared to commit millions to esports entertainment, the innovation esports spawns, the brands esports attracts and the young audience esports appeals to.
In addition to case studies of how Riot Games, EA Sports and Psyonix have made their flagship titles truly esports-friendly, The Games Publisher’s Guide To Esports is packed with tips to publishers mulling over how to invest in esports. That includes an outline of how to generate revenue.
If you are seeking a handbook that offers those first-steps instructions for investing in esports as a publisher, read The Games Publisher’s Guide To Esports.