Many of the world’s nearly 2.8 billion gamers are athletes or sports fans, and vice-versa. And with games like FIFA, Madden and NBA 2K, the worlds of gaming and athletics are colliding. Increasingly, however, the convergence of traditional sports and gaming goes beyond sports-centered video games. A growing number of professional athletes are investing in competitive esports teams or starting their own. The move gives athletes the opportunity to not only do something they enjoy, but also expand their fan base, grow communities and work with brands to create new revenue streams.
Among the many pro athletes making their mark in gaming and esports today is Juju Smith-Schuster, wide receiver for the Pittsburgh Steelers. “I started [my gaming company] Team Diverge because I was obsessed with gaming and it all started with my cousin’s idea of creating a gaming team,” he says. “Being an athlete and loving to compete, combined with my passion for gaming, led to my investments in esports. Gaming and streaming offer an alternative view into the life of a professional athlete off the field.”
Smith-Schuster also recognized a valuable business opportunity – and rightfully so. From 2018 to 2020, esports viewership rose from 79 to 92 million users, representing an uptick of more than 16%. And the growth of esports participation and fandom is unlikely to plateau anytime soon; gaming market research firm Newzoo predicts that by the year 2023, the annual growth rate of esports viewership will surpass 10%. With increased viewership comes expanded opportunities for brand sponsorships, advertising and more – which in turn drives cash flow for gamers/streamers, team owners and brands alike.
But where did the convergence of traditional sports and esports come from? And is it just a fad, or is it here to stay?
The intersection of sports and gaming
There’s always been a degree of cultural crossover between athletics and gaming – in the same vein as the well-documented exchange between sports and hip hop. But the fusion of the two realms has accelerated significantly in recent years.
According to Doug Scott, co-founder of Subnation, a marketing and media platform centered on gaming and esports culture, there is a natural crossover due to what he refers to as “KGOY” or “kids growing older, younger”, which he says is the result of our technology-infused world. “For better or for worse, we’ve moved from the bat and ball, to the joystick, to the mouse and keyboard,” he says. “And as technology got richer and the competitive experience got greater, more kids moved into gaming.” Catalyzed by young people – many of whom are athletes or sports fans themselves – the proliferation of gaming inevitably crossed paths with sports.
Another key trend accelerating the confluence of traditional sports and esports is the accessibility enabled by mobile. “A lot of growth is happening in mobile, especially in Southeast Asia, because it’s a mobile society – and the proximity to the game is right there in your pocket,” Scott says. “So that’s really been fueling this move of professional athletes into esports.”
Recent data confirms that mobile esports is growing rapidly year after year – and emerging markets such as Brazil and Southeast Asia are leading the charge. These markets are further accelerating the convergence of traditional sports and esports by recognizing esports as an official sport. The Asian Games – a major multisport event much like the Olympics, held every four years – will feature esports as a medal event for the first time in the 2022 games in Hangzhou, China. Considering that the global esports audience includes some half a billion people, the move further solidifies esports and gaming as a foundational component of the modern sporting landscape.
What could not have been anticipated, however, is the role that the pandemic would play in accelerating this convergence. In lockdown, with most broadcast sports on pause, consumers and athletes alike turned to gaming and esports. While folks stuck at home gamed and tuned into watch their favorite Twitch streamers, so too did many of the world’s professional athletes.
“All of a sudden NBA players were playing NBA 2K and NFL players were competing in charity tournaments, like ‘Gronk’ [Rob Gronkowski] and others playing against Ninja,” Scott says. “And before you knew it, even Formula One moved to sim [simulated] racing. And sim racing as a category saw a 1000%-plus growth. So, you had all these franchises starting to build the infrastructure to support [the move into esports]. [NBA commissioner] Adam Silver has done a phenomenal job, building the NBA 2K League, within the construct of the overall teams. We saw this acceleration take place because the only sport that could last during Covid was esports, because it was digital. You’ve really got professional organizations moving to the center of esports.”
Players make their own moves
In October of 2020, the Subnation team received a call from the Green Bay Packers, who, with no games slated for the week, wanted to host a Call of Duty tournament for the team. Some 20 players signed up to participate, and the event was livestreamed on Twitch. The tournament title was snagged by wide receiver Marquez Valdes-Scantling, who tells The Drum: “Playing video games is a hobby that I’ve had since I was a little kid.”
As sports franchises increasingly invested in esports events and teams, individual athletes began to make their own moves. “Athletes started to say, ‘Whoa, look at all the kids [streaming and gaming] out there – look at the audience out there; I’m going to stream,’” Scott says. “They all opened up Twitch accounts, and they’ve got 40,000, 50,000, 100,000 subscribers. They’re like, ‘Oh my God, I have an audience. It’s not just me on the court, but it’s me on the screen.’ You’re starting to see a lot of these athletes recognize that esports is an investment opportunity for them off the field or off the court.”
And that’s exactly what Valdes-Scantling did. After winning the Packers’ Call of Duty tournament, he decided to create his own esports team with the help of Subnation. “I’ve always wanted to be a part of a gaming org,” he says. “I thought, ‘I want to be able to create my own [team],’ because I was playing with a bunch of different guys during the football season that were super talented [but] weren’t getting the type of recognition that they deserved. They’re grinding, and they want to be able to showcase their abilities.”
Valdes-Scantling figured that if he paired his gaming skills and public platform with Subnation’s business acumen, he’d be able to create something meaningful. Subnation helped the Packers star assemble a business plan and laid the foundations for what would become Trench Made Gaming during the first quarter of 2021. Now, with an esports team assembled, Trench Made Gaming is preparing to host its first event, a Call of Duty: Warzone invitational that will be held June 9.
“I want this thing to be as big as possible,” Valdes-Scantling adds. “Obviously football isn’t going to last forever for me. There’s no way around it: you can’t play football forever. But you can play video games as long as your fingers work.”
David Freeman is the co-head of digital media at Creative Artists Agency (CAA) –the firm that reps major gaming and streaming talent including Tyler Blevins (known by fans as Ninja) who, with over 16 million Twitch followers, is the most popular gaming streamer on earth. Freeman believes that athletes’ growing interest in esports is likely to pay off. “There are a lot of athletes – from Michael Jordan and Kevin Durant to Stephen Curry and Alex Rodriguez – who have made investments in esports teams,” he says. “And a lot of these teams aren’t massively profitable today, but they’re making a bet early on to capture equity. Think about if you could own a slice of the Yankees [in its] early days, what would 1% or 2% worth of that franchise be in 10 or 15 years from now?”
Where marketers can suit up
With the explosion of esports of course has come an abundance of new opportunities for brands. “A lot of traditional marketers and traditional media still saw [esports] as a subculture of sports,” CAA’s Freeman says. “But if you look at the numbers, it’s bigger than the box office. It’s bigger than some of the biggest pop culture, sports and entertainment franchises and brands out there.”
And he’s right. The opportunities for marketers and brands are countless: Newzoo estimates that in 2021, $833.6m in revenue will stem from media rights and sponsorships – accounting for the majority of the total esports and livestreaming market.
It’s likely that in-game advertising, product placements, brand sponsorships and promo plays will continue to dominate the esports, gaming and streaming scene. “There’s simple sponsorships all the way [up] to branded worlds,” Subnation’s Scott says. “[For brands,] there’s the event piece, there’s the content piece, there’s team sponsorship. And we’re working with a brand right now to build out an experience for them in Fortnite within [the game’s] creative sandbox.”
But at the same time, marketing opportunities are expanding as new players in the space like Smith-Schuster and Valdes-Scantling set out to create entire lifestyle brands – rather than simply gaming collectives. “We don’t want to just be a team that plays video games,” Valdes-Scantling says. “We have so many different avenues that we want to tap into. Besides becoming the one-stop shop for video games, we want to be a one-stop shop for everything, whether it’s fashion or whatever your interests are. We want to recruit players that have that same type of passion outside of just video games.”
Smith-Schuster has a similar vision. He hopes that Team Diverge will “live at the intersection of sports, gaming, creative content and unique fan experiences”. He tells The Drum that Team Diverge aims to “leverage our unique roster of crossover talent, therefore diverging from the traditional standard of a gaming organization”.
The streaming and gaming stars who already dominate the space – like Ninja – are also looking to expand their brand and diversify their businesses in new ways, with opportunities ranging from publishing and animation to major media deals with the likes of YouTube and Facebook.
For marketers, there’s no time like the present. Freeman says: “For better or for worse, the pandemic made everyone – especially marketers – see that if you don’t have an esports or gaming strategy that is well-baked and well thought-out, then you’re missing out on a movement that you’re going to regret [not taking advantage of]. Some of the bigger CPG brands, whether that’s Pepsi or McDonald’s or Taco Bell, have been in [the esports space] for a certain period of time.
“But I think every brand is realizing that if you want to hit young millennials and gen Z, you have to figure out where you want to enter this marketplace. So much is happening in this space, and it’s happening quickly. This is arguably the biggest thing happening across entertainment and sports.”