A dazzling opening dance. A colorful fashion show of the trendiest threads in leisure wear. A mouth-watering menu of homemade pasta, winter stew and bread pudding. A vibrant mix of language and culture set within the confines of a German engineering landmark.
No, this was not your typical sports business conference. This was Hive Berlin, a gathering of entrepreneurs, marketers, technologists, data scientists and designers, among others. Earlier this month, they all gathered at the Euref Campus, an innovative, eco-friendly business community in the Schoenberg section of Berlin, for a day of creativity, conversation, prognostication (mostly sound and measured) and respectful debate about the evolving, diversifying world of esports.
I was fortunate to attend this event (presented by The Esports Observer). In addition to being captivated by the unique setting – held in the centerpiece of the campus, a domed conference space encased in the skeleton of a massive, decommissioned gas tank (known as “Gasometer”) – I gained insights on a variety of burning (or in some cases, simmering) topics in the industry.
This is No Hockey Stick Model
In an opening address entitled “Getting into Esports,” industry sages Peter Warman of NewZoo and Jens Hilgers of Dojo Madness put things into proper context: esports has been around for more than two decades. It is not, as so many people believe, experiencing a spiking “hockey stick” model of growth. It has been experiencing linear growth for many years. For those entering the space, it is critical to manage expectations so that they fully understand the continually evolving landscape first – not just the projected growth trajectory but the drivers of growth, consumer behavior and the evolving digitally savvy demographics. The foundation of the industry is strengthening and primed for continued growth due to various factors:
- There has been a rise of new game enthusiast segments; for example, the “Backseat Viewer” – a lapsed gamer who enjoys watching competitive esports (Warman admitted to being one)
- The year-over-year growth is driven largely by “digital natives growing up with video games”
- There is now six times more time spent on gaming than 10 years ago
- Prioritizing time spent on gaming (engagement) above monetization – “What makes us very special (in gaming) is we put time first before money,” said Warman. This is evident in the industry’s focus on engaging consumers through free games and streaming content.
Hilgers stressed that in the next wave of esports games, developers need to consider the viewing experience for fans as much as the gameplay. “Having a game that is equally great to watch as it is to play will ultimately make for the best esports games,” he said.
It’s Not About the Banners
The panel on marketing was the most lively of the day, in my opinion. Executives on both sides of the Atlantic were outspoken with their POVs on sponsorship marketing, where brands are still trying to assess the best opportunities and ROI in this very complex, diversified ecosystem. As noted in Taylor’s 2019 Esports Trends Report, this year we are expecting to see a breakthrough for brands investing in the space (thanks in part to more extensive data and analysis), and resonating from this panel were a number of insights and guiding principles for marketers to embrace.
Alban Dechelotte, one of the most innovative marketers in gaming, led esports at Coca-Cola for many years and is now based in Berlin as head of sponsorships and business development for Riot Games Europe. He was very direct about the approach brands must take to build authentic engagement with the esports consumer: “Good sponsorship is bringing value to the players; people don’t come to the stadium to watch banners,” he said. “80 percent of players have ad blockers; they just don’t see the brands (advertising). . . It’s about brand acceptance; you need to connect with players that you will not [connect with otherwise] through classical advertising. The successful campaign is bridging the gap between watching the game and playing the game. Brands want access; they want to talk to our players . . . What’s good for the brand and good for players brings long-term value for both parties.”
Toan Nguyen of Hamburg-based creative agency Jung von Matt, stressed the need to “earn your street credibility first. Last year was like a blue ocean, now it’s a traffic jam.” Nguyen’s advice for brands that don’t feel they have the budget to navigate a blue ocean or a traffic jam? “If you don’t have big budgets, it might be advisable to take big risks.”
To which Dechelotte added perhaps the most salient comment of the day: “A small budget is not an excuse for a bad campaign. Focus small and it see if it works – then you can scale it.”
Technology Drives Engagement
The number of conference attendees who were technology providers was quite telling. Esports is driving innovation in the tech sector and vice versa. A key takeaway from the Technology panel? There is a world of opportunity to enhance the performance of gamers and ultimately build engagement for fans.
Daniel Buttner of Germany-based haptic technology company Lofelt noted: “Cloud gaming will allow for a completely different experience of gaming,” in reference to Google Stadia. “This will offer audiences more opportunity to interact with the game in new ways.”
For Mike Sheetal of Tokyo-based esports media/production agency PlayBrain, the dynamic between the players and the fans across the digital space is very intriguing: “The idea of being completely cross platform is where the most things happen,” he told the audience. “How can the players feel the impact of the fan experience when they perform? That for me is very exciting.”
Milan Cerny, Technology and Innovation lead at SAP Global Sponsorships, which along with Intel has been one of the global tech giants long invested in esports, made an interesting point about how his brand is building trust with multiple stakeholders across the space: “Esports is a way for us to engage with young talent; maybe they want to work for us or end up somewhere in our ecosystem . . . we enrich the space and add real value.” For Dota2, SAP is providing proprietary data for players and coaches. “Our partners consume our technology to enhance storytelling to their fanbase,” he remarked.
“A Strong, Fit Person”
Buttner was also effusive in remarking that “we can improve not only the immersiveness of the gaming experience but actually the performance of the gamer.” This thought carried through to the first session of the afternoon as several tech start-ups were afforded two minutes each on the main stage to pitch their products. This lively, rapid-fire session gave further insight into how esports is driving a cottage industry of performance enhancement. I appreciated the enthusiasm and creativity of the presenters, but with a healthy dose of skepticism.
- G-Science, dedicated to “eliminating burnout in esports,” has developed an app that provides real-time data to players and coaches using physical and cognitive data. Sounds great in theory, but other critical factors (such as the structure and scheduling of competitive play and the mindset of the players) will go a long way toward eliminating burnout. An app alone won’t cut it.
- Hallid.ai (pronounced “Holiday”) introduced “Isaac,” an AI-powered virtual assistant who can help streamers better manage their busy schedules (especially those who have day jobs) by preparing them for their streaming sessions performing tasks such as selecting and organizing content, posting social content and connecting with sponsors, for example.
- Forward Game, a location-based, AR-powered multiplayer platform that enables one to experience gaming while being active. The promise here was that the “Gamer” will be associated with a “strong, fit person.” AR cast a large shadow at the Game Developer’s Conference in San Francisco last month but it remains to be seen how this can really scale within the competitive gaming community. Maybe “strong, fit person” as an esports archetype is just wishful thinking.
From the “opening number” of the conference, featuring a talented group of young dancers and models, to a 10-minute fashion show highlighting a colorful array of esports leisurewear, fashion was top of mind throughout the day. Some iconic brands like Nike, adidas and Puma have dipped their toes in the water of late, giving a sense of the potential for an esports genre of apparel, but will fashion extend beyond the team level or will there be an appetite, and ultimately a viable market, for the growing global esports consumer base? Listening to the panel on fashion, featuring two leading brands (Meta Threads and We Are Nations) and one major distributor (ESL), there was an abundance of optimism. But it was hard to walk away with a consensus as to how, when or if fashion will help drive the culture of esports or vice versa, as it did for example, snowboarding, with the now ubiquitous Burton brand.
What we are seeing, as is the case across many sectors in the industry, is an evolving space with acres and acres of room to grow.
“I think it’s a long play with respect to esports fashion becoming a force in the fashion world,” remarked Patrick Mahoney, Co-Founder and CEO of We Are Nations. “Eventually we have to scale and compete with other major sports for shelf space.”
David Hiltscher, VP of Shop, Merchandising and Licensing for ESL noted, “apparel is an extension of our brand; people can touch and feel at home that is the essence of our brand. It extends the brand equity that we’ve built.”
On the subject of female consumers, Hiltscher said that he stands behind the counter at his events and observes that many female consumers want male or unisex brands – a trend that extends well beyond esports. Both Mahoney and Steve Nabi, CEO of Meta Threads, concurred. Nabi noted that “most females will opt to purchase a unisex jersey for comfort,” while Mahoney stressed, “there’s a different kind of empowerment with women in esports; it’s not just shrink it and pink it.”
Mahoney’s comments align with what was underscored in Taylor’s 2019 Esports Trend Report where we stated, “as more gamers rally behind female empowerment (and this is being seen across industries, not only esports) and female-led tournaments/festivals continue to flourish, women will be encouraged to embrace esports even more.”
As I left the conference, I looked back at the landmark structure that stands as both a relic of the past and a beacon of the future, the centerpiece of a sprawling urban think-tank in one of the world’s most progressive cities. Where it once helped power a growing metropolis, it today held the brilliant minds and bold thinkers that are fueling the growth of a global sports and entertainment industry, the boundaries of which seem limitless.