Everything You Wanted to Know About Esports. An Interview with Zach Oscar

Zach Oscar, Esports and Gaming Consultant, his esports teeth in 2018 writing for MediaPost on the Gaming/Esports industries and, at the same time, working for MRI-Simmons on their esports/gaming data offering. That combination enabled him to explore both the news and the measurement side of that business. 

He has also presented, “Video Gaming and Esports; A Clarification,” to companies such as AMC Networks, Comscore, and Sinclair Broadcasting to help them keep up to date on this fast-moving and confusing landscape. Most recently he has been working with Simulmedia as they enter the in-game advertising space. He has presented an industry overview of advertising in esports and gaming at a recent Secret Society meeting which is a gathering of advanced TV executives. 

Charlene Weisler: How do you define esports?

Zach Oscar: Esports refers specifically to professional, organized, regulated, sponsored multiplayer video game competition. So why is there so much confusion? Games like Fortnite make people think that anyone who plays Fortnite plays esports. Unless you’re playing for a prize, in a regulated professional environment against other professionals, you’re not in esports, you’re a gamer. 

Weisler: We talk about esports and gaming as the same thing, but there are obviously differences. Can you go into the differences and similarities?

Oscar: Both esports and gaming are about video games. Esports exists within the broader gaming ecosystem. However, while all esports are video games, not all video games are esports. For example, some of the world's most popular game lines like Skyrim, Animal Crossing, and God of War are not esports capable, meaning they don't have a competitive angle through which multiplayer professional teams could compete for prizes and the championship titles.

Weisler: How does esports compare with traditional sports? 

Oscar: In some respects they are similar. Esports senior management have deliberately talked about how they parallel to the traditional sports world i.e. a developmental/high school equivalent, a minor league system, a major league system, and then a championship. 

But there are differences. Esports are growing faster in the 18-34 year old category than almost any other sport except the NFL and NBA. The viewing experience between the two are very different. If you're watching a football game, talking with friends or others about it requires you to either have friends in person, on the phone, or message through a third party app not tied directly to the sports broadcast. Places to watch esports like Twitch, YouTube, and Facebook Gaming all have chat capabilities integrated into the platform, and community engagement during these games is massive. People comment on gameplay, send funny memes, put in specific codes during the broadcast to try to enter to win prizes, it's a very unique experience. 

However, the most crucial difference is ownership. In basketball, for example, no one owns the sport. The NBA is the league operation which regulates the game. Very rarely are any changes made. In esports, the publishers and developers who create these games are often the owners of the leagues in which they are played, too. The games change ALL the time. New characters, weapons, abilities, etc. can have a fundamental impact on the gameplay. So not only do they regulate the play, but they also set the terms of the play itself.

Advertisers can work with publishers to find ways to get into the games themselves in an authentic and player-focused way. League of Legends, for example, has recently announced a few partners for its in-game banner advertising which will only be visible to people watching the esports competition online, not to the actual athletes playing the game. Mastercard is one of the first to get on this wave. 

Weisler: How have esports evolved over the past 3 years?

Oscar: People say that esports are still not mainstream but esports' presence has been creeping up for many years. Since 2016, competitions like the ESL Pro Counter Strike championship have been filling up massive arenas like the Barclays, and acquiring major, almost unthinkable partnerships/sponsorships from big name brands over the past year alone. For example, Louis Vuitton, BMW, Gucci, and other unexpected advertisers have entered the esports scene. 

Also, games like Fortnite and Call of Duty Warzone (Call of Duty's Fortnite equivalent) have become so popular as video games, that by extension of their interest in the game itself people are watching competitive esports. So many more people are gamers today and some of those people then get into esports. 

Another trend is the experimental expansion of esports. Activision Blizzard, creators of Overwatch and Call of Duty, have begun attempting to create local team franchises based in the US and abroad to foster a traditional sports like following. Because of this, too, there is more planned esports specific venue building and therefore opportunity for regional sports networks to air competitions. Plus, esports have acted as a substitute for traditional sports in lieu of COVID-19; some professional athletes have held their competitions virtually, for fun, like NASCAR's iRacing virtual competition that took place earlier this year in lieu of normal races. 

Weisler: Has the pandemic caused any change in the esports model?

Oscar: With the pandemic halting in-person competition until recently, there was a lot of hype around the ease with which esports would be able to continue onwards totally online. There's definitely merit to that idea - the Call of Duty League championships, which took place just this past Sunday broke their peak viewership on YouTube for any of their other esports competitions at 331,000 viewers on the platform - the previous peak was around 200k for the league. TEGNA, the local TV station conglomerate in Texas, partnered with local esports teams Houston Outlaws and Dallas FUEL to put on competitions over three weeks and create a docuseries that ran on weekends. Also, sponsorships have continued to pour in to esports since there's scarce opportunity in other postponed sports, with major brands like Nike announcing just this past week a streetwear sneaker deal with the League of Legends 2020 World Championships. 

Additionally, without that sports programming, ESPN and other sports networks have started showing more esports competitions live. However, it's not all roses for the esports world. A common misconception is that esports is perfectly healthy when it is entirely online. As I mentioned earlier, esports wants to be viewed in the same light as traditional sports by marketers (except with an even younger audience), including in-person audience opportunity. Ticket sales, merch sales, visual sponsorships are all big parts of the esports revenue, which accounted for approximately $100 million worldwide in 2019.

Weisler: Tell me about the demos for esports.

Oscar: According to MRI-Simmons' latest report on esports fans, around 47 million Americans are esports fans, which consists mainly of 18-34 year old millennials, who make more than the national average income, which is around 60k. Esports fans skew male, as is to be expected, by a roughly 60-40 split. However, we still need more data and insights into esports fans under 18 years old, since it is burgeoning for younger people. Comscore has been working with Twitch to get more viewership data and put it in context with cross-media viewership data, and YouGov has collected sentiment data on activations within esports, but we’re still waiting to see the bulk of all that. According to Nielsen and Riot Games, the League of Legends North American tournament series is the third most popular league for adults 18-34 behind the NFL and NBA, but the gap is noticeable (around 2.5m for NFL, 470k for NBA, and 123k for League of Legends). If you included people under 18, I bet these numbers would be even closer together. 

Weisler: Where do you see esports 2-3 years from now?

Oscar: According to many projections, esports is set to grow to about $2bn in worldwide revenue, with a CAGR of 23%. I am not sure how that will play out, but viewership will continue to grow as more and more people start to use platforms like Twitch and YouTube for their m
ainstream entertainment. Esports is an integral part of that. Currently, around 500M people worldwide watch esports and that is projected to grow to around 650M in 2023, according to gaming/esports research firm NewZoo. It's hard to know how reliable all these projections are, especially since esports is such a broad bucket of interests, but if history has taught us anything it's that esports continues to draw more viewers over the years.  

This article first appeared in www.Mediapost.com