The Indian e-sports industry’s revenue is et to increase five-fold with a rise in sponsorship, making it a promising platform for marketing among brands.
Consumer brands like Yes Bank, Oppo and Sony Liv have come out to join the global e-sports industry which has crossed the $1 billion milestone. According to a recently launched report by PWC, the Indian e-sports sector has increased at 36.8 per cent CAGR.
In a chat with exchange4media, Mujahid Rupani, Co-Founder and CEO of Cobx Gaming, which had pulled off India’s first-ever international e-sports event recently, spoke about the challenges ahead for the e-sports sector, on the functioning of the business model, ad spends, and how advertisers can be benefited.
Sharing his insights on how e-sports is booming as an industry for marketers, Rupani said: “This year, the global e-sports industry crossed the $1 billion milestone, making it a promising platform for marketing among brands. Globally, a lot of brands have been undertaking sponsoring and marketing initiatives. In India, this medium is catching up now. Brands like Microsoft, HP, Mercedes-Benz, Pringles, Coca-Cola, Nisan, VISA, Logitech, Amazon, Snickers and Mountain Dew have been leveraging on e-sports tournaments and events to reach out to their TG.”
According to Rupani, over the past couple of years in India, non-endemic brands like Flipkart, Yes Bank, Sony, Mercedes and Red Bull have shown an interest in marketing through e-sports and have sponsored large scale tournaments along with endemic brands like Asus, Acer, Vivo and Tencent. With the growing reach of the industry and more such large-scale tournaments, brands will see an array of marketing opportunities for themselves, he added.
Asked about how advertisers have benefited in this arena, Rupani says that as per the KPMG report of 2018, there are more than 250 million gamers in India, which implies that the e-sports industry caters to a huge audience. For advertisers, this is a huge opportunity to reach their audience.
“So when a brand associates with this industry for marketing, it means they have access to that many people. On an average, a gamer spends 3 to 4 hours per day gaming. In addition to this, they spend around 1 to 2 hours watching games streamed on Twitch and YouTube. Constantly placing ads on these platforms will help in create brand recognition among the gaming audience. About 20 per cent of this audience are converted into customers and thus it would prove to be profitable for the brands. Just like traditional sports, e-sports tournaments too have a strong follower base. So being a part of these events is a good push for brands.”
The Indian e-sports industry ranks 16th globally in terms of revenue. The industry in India is currently at the nascent stage. Having said that, the industry is seeing a sudden surge in the number of gamers and followers. And in the next 4 to 5 years, gaming and the e-sports industry is positive to be placed in the top 15. “Thanks to the flow of revenue from advertisements, sponsors, ticketing and merchandise partners, the ability to commercialise e-sports tournaments has also garnered interest among the media and OTT platforms, thus opening more arrays of streaming and gaining more traction,” Rupani added.
Marketers do see tremendous potential in this segment now. “The TG of this industry is young and highly engaged. Brands have to strategically execute their marketing plan to successfully reach their audience. Brands like Vodafone, Mercedes, Intel and Vivo have been sponsoring e-sports tournaments like ESL One 2019 and PUBG Mobile India Series.”
Sharing about the revenue model, Rupani highlights that there are two aspects of the industry – e-sports tournament and e-sports team. The revenue models for both are slightly different. The e-sports industry majorly depends on tournaments and leagues. Sponsorship is the prime revenue source for the e-sports industry. Followed by profit sharing, event ticketing, content-streaming rights, media partnership, streaming ads and stream ticketing. In the coming days, the industry is looking forward to open broadcasting rights as another revenue model in e-sports, he said.
Providing an insight on how are the digital spends managed, Rupani said, “Digital spends are managed depending on the sponsor or customer’s objectives. It could be a product focus or launch, it could be a new sub-TG that needs to be focussed on. Primarily, digital spend and marketing are dependent on the customer requirements. Typically, it involves boosting posts and tweets or other social media content. There is also a sizable portion that goes into content creation and digital media creations.”
On the challenges, Rupani said: “E-sports is still at a nascent stage. Companies are still uptight to channel their money here. However, things are changing, brands that know about the industry and its potential are keen on sponsoring. With more awareness, we are sure hunting for sponsors will be easier. In our recent event, Cobx Masters 2019 we successfully signed in Yes Bank as our title sponsor, while Sony Liv was our digital streaming partner. For a bank, e-sports does not even come anywhere close to their area of interest. However, to reach the younger audience, the brand associated with our event. This is a great case study of a non-endemic brand undertaking marketing initiative with the e-sports event.”