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Big Brands Dive Into India’s Esports Industry

Big Brands Dive Into India’s Esports Industry

India will be hosting a 17 Mn esports audience by the end of 2020

Brands such as Dell, Intel, RedBull, Bharti Airtel, Acer, Louis Vuitton, SonyLiv and MTV have made strides into the esports industry over the past few years

Will brands be able to leverage the growth of the esports industry in India?

India’s esports market is still at a nascent stage but has managed to double its viewership and gamer base since 2018. Esports audience in India is projected to reach 17 Mn by the end of 2020, with esports startups and companies in India having an aggregate revenue of $68 Mn in FY2020, as per our recent report “Esports In India: Market Landscape Report 2020”analysis.

The year-on-year growth in the esports industry and the audience base has created a lucrative opportunity for brands to communicate with their target customer.

Further, the coronavirus pandemic has pushed brands to look for non-traditional media spaces to tap audiences where they are most engaged. This has given a boost to online games as potential avenues for brands and marketers. According to industry estimates, Covid-19-related restrictions have triggered a 300%-400% surge in online gaming advertising and sponsorship and the category of brands esports has attracted is also changing to include high-end, aspirational brands.

Brands Betting On Esports In India

Esports marketers are not only banking on sales and revenue from these associations but also want to reach the right audience and expand the addressable base. Given that audiences spend more time on esports and are more highly engaged in the action, brands have the opportunity to extract maximum value from these sponsorships or associations, as compared to traditional digital media or casual gaming.

Both gaming as well as non-gaming brands have made strides in the space. Brands are placing bets in the esports industry given the engaged audience and the growing base of players and viewers. However, it is important for brands to understand their potential customers on these platforms and provide them with engaging content and not just ads.

Brands Betting On Esports Ecosystem

Beverage brands such as Red Bull, Mountain Dew and Coca Cola have sponsored many esports events as well as teams in India and globally, banking on the common theme of adventure and energised gaming experience. Plus, the target audience for these beverages typically matches the esports players or viewers, which gives them a good audience fit for esports branding.

Luxury auto brands such as BMW and Mercedes Benz have also made an entry into space — Mercedes is the sponsor of the India ESL Gaming esports circuit. Both these brands are looking for engagement from esports viewers and players, banking on-brand messaging that’s geared around innovation, high performance, and a premium experience.

Download India's Esports Market Report

Brands should pay attention to the gaming elements and strive to successfully integrate those to drive higher consumer engagement and conversions. For instance, Louis Vuitton integrated its apparel collection as in-game character skin for League Of Legends, making it available to any player in the game. Since appearance is a key factor that excites LoL gamers, the luxury designer brand created an exclusive League of Legends apparel collection.

The entry of PUBG Mobile into mainstream conversations in India has widened the potential for brands that are seeking to target Gen Z and young millennials in India. Brands such as OPPO, Paytm First Games, Loco and others have sponsored tournaments in recent years to ensure authentic brand interactions with the target audience, which is largely in the 18-30 age range. By understanding the personal interests and behaviour of gamers as well as viewers in esports, brands get a better idea of integrating their messaging with other categories in gaming as well.

Why Are Brands Bullish About Esports?

The esports ecosystem has complex layers due to the presence of several entities, such as teams, partners, tournament organisers, streaming platforms, game developers, viewers, publishers and brands.

ESports Value Chain

But esports, nevertheless acts as an effective medium of communication for brands and companies to reach a massively engaged audience and consumer base.

In addition to an opportunity to tap a wide and appropriate target audience, here are few key benefits for brands to integrate with the esports industry:

Growing Audience Base

As indicated earlier, the audience in esports is highly engaged and as such brand messages are likely to have good penetration and recall.

An esports viewer in India on average spends more than 22 hours per week watching streams on online platforms like Twitch and YouTube. Esports games such as League of Legends, CS:GO, Dota 2, PUBG, Fortnite, Rocket League, Overwatch and others are estimated to have an audience of 17 Mn by the end of 2020.

Since esports competitions are primarily targeted at youth, brands that are targeting this user base find it more lucrative to invest in esports advertising and branding. It often transforms the image associated with a brand from a sober ‘old’ brand to a young and energetic brand. So esports can not only be a great way to reach consumers, but also a way to revamp brand image for youth-oriented brands or products.

Esports Audience

The rise in the esports audience has expanded the diversity and scale of the industry, in turn improving the marketing opportunities for brands as well as companies. Brands are increasingly leveraging esports audiences by accounting for their personal interests and gaming behaviour through in-game analytics or marketing tools.

Lastly, due to the global nature of many esports tournaments, the reach of the associated brand increases greatly, which helps in widening the target market, in case of expansion plans in the future. Esports is seen as an avenue for tech-centric brands to reach young audiences in new geographies.

Download India's Esports Market Report

High Monetisation Potential

Engagement is just one part of the puzzle, brands also need to unlock revenue value from their brand associations. And this is where examples like Louis Vuitton’s in-app skin purchase makes sense.

Esports audiences spend heavily on streaming platforms, merchandise, tickets, virtual currency and in-game purchases every year. According to Futuresource Consulting, gaming is expected to capture 36% of the total entertainment spend by 2023 globally.This indicates that esports gamers have a significant purchasing power compared to other users, which makes conversions more likely.

How Brands Are Leveraging Esports

Of course, with the changing nature of online gaming and esports, brands continue to find new avenues to gain returns on their investments in advertising and marketing.

As ever, advertising is the easiest way to tap the audience — either through in-game ads or during tournament streams and broadcast. The core target audience of esports matches brands that offer youth-oriented products or services.

Besides advertising, sponsorships are another avenue for brands, especially tie-ins with major tournaments, partner with teams and sponsor top players. Esports tournaments have seen brands such as Dell–Alienware, Red Bull, Mercedes, Disney+Hotstar, Intel and Nvidia queue up for sponsorships.

The third major brand integration channel is the franchisee model. Brands expand their presence and sell merchandise in collaboration with games and create franchises for the esports tournament or event.

Investors look for long-term benefits through franchising which tends to generate good revenue in the long run. Non-gaming brands are becoming more and more interested in sponsoring franchised esports leagues due to their regional potential. For instance, Chennai-based Skyesports hosted franchise-model league tournaments backed by paints giant Nippon Paint.

Similarly, brands are investing in esports properties to engage with the target audience in a better manner. Of course, there’s always the risk of brands diluting their identity by investing too much in esports promotions or sponsorship. So it is a fine line for brands — being in sync with the latest trends and values in the industry and having the right product to back such associations is key to winning the esports audience.

Download India's Esports Market Report