OFFERS THE MUST-READ INDUSTRY WHITE PAPER AND BRANDS GAMING’S NEW BEST FRIENDS

JULIANA KORANTENG Editor-in-Chief/Founder 2 MediaTainment Finance (UK) TABLE OF CONTENT

1. INTRODUCTION – Page 5

2. OVERVIEW – Page 10 3. WHY ESPORTS NEEDS BRANDS: THE SPONSORSHIP FACTOR – Page 13

4. WHAT BRANDS EXPECT FROM ESPORTS – Page 32

5. CASE STUDIES – Page 37

6. WHAT THE EXPERTS SAY – Page 45 3 Esports and Brands Gaming’s New Best Friends

4 Copyright: ESL/Helena Kristiansson Esports and Brands Gaming’s New Best Friends 1. INTRODUCTION

The rapid growth of esports as a revenue-generating sector is a phenomenon that is catching the attention of brand owners and marketers globally.

Esports (competitive gaming) kicked off several years ago as an insular activity played by fanatical players of online games being viewed on computers by their equally zealous friends.

Today, it is also played by professionals who enter tournaments offering multi-million dollars in cash prizes. It is watched by hundreds of millions of fans at live venues or online at home. Spectators at the live events also come armed with mobile devices to interact with other fans via social media.

5 Esports and Brands Gaming’s New Best Friends

Its followers are mostly young Millennial and Generation Z males, digital natives who no longer watch linear TV, if any TV at all. Moreover, traditional sports have failed to capture their imaginations, mainly because football, basketball, tennis and other mainstream sport events still rely on traditional media to reach their audiences.

Esports enthusiasts even create their own amateur competitions for others to watch on dedicated platforms like , the world’s biggest esports streaming network.

They have helped create what is arguably the first totally new digitally native entertainment genre, which has used tech to combine the formats of video games, competitive sports, live events, multi-device screen entertainment and original video content.

As a professional activity, esports barely existed five years ago. Yet, experts predict the revenues generated from a combination of streaming TV and online video ads, sponsorships and ticket sales will reach US$1.5 billion by 2020.

6 Esports and Brands Gaming’s New Best Friends

Major brands, including e-commerce behemoth Amazon, electronic goods giant ASUS and games-publishing goliath Activision Blizzard, have invested in esports as sponsors.

But as endemic brands, they were already linked to the fast-rising sector: As stated above, Amazon owns the most popular esports platform Twitch; ASUS has been manufacturing games- related computers and other hardware for more than a decade; and Activision Blizzard possesses some of the most valuable gaming intellectual properties.

What is totally new is the involvement of non-endemic brands, including those in the industries of food and beverages, soft drinks manufacturing, telecommunications, auto manufacturing, finance and consumer goods.

Their participation has to a large extent been exploratory, but it is growing and bringing incremental income to esports.

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This Esports BAR White Paper aims to show why both endemic and non-endemic brands hold the keys to the future of esports’ growth as a professional activity and as an in-demand content provider in the media and entertainment industries.

It also offers guidelines on what participants in the esports ecosystem need to understand and do to attract brands and marketers as potential sponsors of their 21st-century digitally operated kind of show business.

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9 Copyright: ESL/Patrick Strack Esports and Brands Gaming’s New Best Friends 2. OVERVIEW

Esports BAR’s White Paper features a combination of original research, interviews with experts and case studies designed to inform readers why it makes sense for brands and their marketing agencies and the growing esports business to start courting each other.

It examines the role of brands, especially non-endemic ones, in propelling the once-niche activity of competitive gaming into a mainstream and professional media-and-entertainment pursuit.

It analyses what brand owners, with their combined experience in sponsoring traditional professional sports, live events and media content, can bring to the table on which esports talent and entrepreneurs feed and thrive.

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It looks at what brands expect in return for their financial support.

Additionally, this study presents facts and figures that illustrate why the right monetisation strategy – via sponsorship, media rights, advertising, merchandise and tickets – is essential to esports’ future growth.

The paper then offers a breakdown of what esports enterprises and organisations need to do to develop long-term relationships with marketers.

After reading this study, esports operators should feel well armed to kick off negotiations with major brand and sponsorship partners.

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12 Copyright: ESL/Helena Kristiansson Esports and Brands Gaming’s New Best Friends 3. WHY ESPORTS NEEDS BRANDS THE SPONSORSHIP FACTOR

Esports might be new to the world of sponsorship, advertising and marketing. But brands’ role in supporting activities and content distributed by live and recorded media is centuries old.

That means marketers and their agencies and the media owners they work with can bring a substantial amount of expertise to a whole new sector like esports and help build on a new foundation that has grown mostly organically to date.

For any emerging new revenue-generating industry, there is one indisputable fact: brands have plenty of money to spend.

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Sponsors’ investments

According to IEG Research, brands and corporate sponsors will spend US$62.8 billion worldwide by the end of 2017, compared to US$60.1 billion in 2016.

IEG Research is a reliable source of this type of data as it is a subsidiary of ESP Properties, an agency dedicated to unlocking value in next-generation intellectual properties. It is also part of the world’s biggest creative advertising and marketing conglomerate WPP Group.

IEG reports that is the biggest sponsorship region where brands and corporations are forecast to invest US$23.2 billion this year, from US$22.3 billion in 2016. Bear in mind this includes sponsorship for a wide variety of sectors, including the arts, live events (concerts, festivals, fairs), good causes and charities. However, traditional sports alone will account for a staggering 70% (at US$16.4 billion) of the total expenditure this year, from just under US$15 billion in 2015. 14 Esports and Brands Gaming’s New Best Friends

Total sponsorship spend in Europe is forecast to grow 4.5% to US$16.7 billion. Asia-Pacific is not far behind with US$15.7 billion this year. But the gap between those regions and Latin America is quite significant. Latin American brand owners are set to spend a comparatively tiny US$4.5 billion in 2017, with the rest of the world accounting for US$2.7 billion.

The deficit in the emerging economies means there is room for growth that esports can capitalise on.

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Sponsors and traditional sports

In the US alone, sponsorship investment in American football teams and their NFL organisation increased by 4.3% to US$1.25 billion in the 2016-2017 season, compared to US$1.2 billion in the 2015-2016 season.

Just to give an idea of the variety of brands associated with NFL football, here are some of the sponsors that participated between 1983 and 2016: Anheuser-Busch (beer), Bridgestone (car tyres), Gatorade (energy drink), EA Sports (video games), FedEx (logistics), Ford Motor Company (auto), Frito-Lay (snacks), Hyundai (auto), Mars (confectionery), McDonald’s (food), (tech), Nike (sports apparel), Procter & Gamble (consumer goods), Sirius XM (online radio), TD Ameritrade (finance), Ticketmaster (live events ticketing), Under Armour (sports apparel), Visa (finance) and Microsoft’s Xbox (video games).

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Chart 1 on pages 18 to 21 gives a snapshot of the global brands and their powerful ties to major international mainstream sports.

Brands’ commitment to esports and related gaming activities is also growing. Based on research conducted by Amsterdam-based specialist Newzoo, esports worldwide will generate US$696 million in revenue by this year’s end.

Of the total, US$517 million will be from brands’ expenditure on advertising, sponsorship and media rights in esports. Of that portion, sponsorship alone will represent the biggest single share of the total at 38%. Of the total US$696 million, US$179 million will come from consumer spend on tickets and merchandise.

17 Chart 1: Mainstream Sports & Sponsors

Traditional Marketer's Sports Brand Brand Owner Country of Sports category Organisation/ Origin Event/Team

Beko Arçelik Turkey FC Barcelona Football The Coca-Cola Multi-Discipline Coca-Cola Company US Olympic Games Event The Coca-Cola Coca-Cola Company US FIFA World Cup Football Berkshire The Great Run Duracell Hathaway US Company Road running The Wembley EE BT Group UK Cup Football Arsenal Football Europcar UK Europcar Group Club Football Fiat Automobiles English Football Fiat S.p.A Italy League Football

First Utility First Utility UK Super League Rugby League

Gazprom State controlled Russia FIFA World Cup Football 18 Mainstream Sports & Sponsors

Traditional Marketer's Sports Brand Brand Owner Country of Sports category Organisation/ Origin Event/Team Netherlands Heineken Olympic Multi-Discipline Heineken International The Netherlands Committee Event

Hisense State owned China UEFA Euro 2016 Football

IBM IBM Corporation US US Open Tennis JPMorgan Chase J.P. Morgan & Co US US Open Tennis The Open Mastercard Mastercard Inc US Championship Golf Ultimate Fighting MetroPCS T-Mobile US Inc US Championship Martial Arts New Balance Cricket South New Balance Athletics US Africa Cricket Nippon Telegraph and Telephone The Open NTT DATA Corp Japan Championship Golf 19 Mainstream Sports & Sponsors

Traditional Marketer's Sports Brand Brand Owner Country of Sports category Organisation/ Origin Event/Team Adam Opel Feyenoord Opel GmbH Rotterdam Football

Philips Koninklijke N.V. The Netherlands PSV Eindhoven Football

Qatar Airways State owned Qatar FIFA World Cup Football Wimbledon Tennis Robinsons Britvic PLC UK Championships Tennis Multi-Discipline Samsung Samsung Group Olympic Games Event Wimbledon Tennis Slazenger Sports Direct UK Championships Tennis Standard Standard Chartered Bank Liverpool Chartered PLC UK Football Club Football Tata Consultancy Long-distance 20 Services Tata Group India Marathon running Mainstream Sports & Sponsors

Marketer's Traditional Sports Sports Brand Brand Owner Country of Organisation/ category Origin Event/Team

TE Connectivity TE Connectivity Ltd Switzerland Andretti Formula E Motorsport Formula 1 Mercedes AMG Petronas UBS UBS AG Switzerland Motorsport Motorsport The VELUX European Handball Group VKR Holding A/S Denmark Federation Handball Long-distance Virgin Money Virgin Group UK London Marathon running

Wanda Group Wanda Group China FIFA World Cup Football The Wendy’s American Wendy’s Company US Super Bowl Football Source: Various; Brand Owners

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Esports – the sponsorship potential

Newzoo predicts brands’ investment in esports is set to double by 2020, pushing the total revenues generated to US$1.5 billion.

Esports’ combined revenues of US$1.5 billion is small compared to the billion-plus sponsorship sums boasted by NFL’s long-established American football alone. The NFL games’ staunch followers range from young male fans to family audiences watching stadium games and the hit Thursday Night Football programme on US linear-TV networks CBS and NBC.

But organised American football is almost 100 years old. Esports was only acknowledged as a professional game with a future during the early 2010s.

What has generated excitement among industry observers and experts is the growing number of brands, especially non-endemic ones, starting to form tight bonds with esports teams and

events (see Chart 2 on pages 23 to 27). 22

Chart 2: Non-Endemic Brands in Esports

Brand Name Brand Owner Esports partnerships (player, team, events) North (team), ASUS ROG Army (team) and ; been Adidas Adidas AG involved in esports sponsorships for years though having sponsored some teams and events in the past

Adrenaline Rush PepsiCo Virtus.pro (team) via partnership with team owner ESforce Holding Turner Broadcasting and WME | IMG-owned ELEAGUE Counter- Roark Capital Group (81.5%); Arby's Strike: Global Offensive (CS:GO) competition (2016, Atlanta, US); TV The Wendy's Company (18.5%) commercials on Twitch and Turner's US TV network TBS

Audi Volkswagen AG (team)

Axe Unilever Partnership deals with Team SoloMid and (team)

Rocket League Championship Series (2017, , US); also Brisk PepsiCo sponsors OpTic Gaming (team) Bud Light All-Stars programme giving the title of All- to the top Bud Light Anheuser-Busch voted players in four games (since 2016, US)

23 Non-Endemic Brands in Esports

Brand Name Brand Owner Esports partnerships (player, team, events) Team Vitality; also sponsored EA Sports FIFA 17 Ultimate Team Canal+ Vivendi SA Championship Series European finals (2017, , France), as well as the competition's French qualifier and final in 2016. (LoL) World Championship Finals (since 2013, Coca-Cola The Coca-Cola Company Los Angeles, US); also sponsors IGN's Esports Weekly online show (team); also sponsors the Dr Pepper AllStar Dr Pepper Dr Pepper Snapple Group Inc Tournaments (LoL, CS;GO) (since 2013, Cologne, Germany)

ExxonMobil ExxonMobil Championship Series (since 2016, Los Angeles, US)

Team SoloMid, Panda Global (team); also sponsors One Nation of GEICO Berkshire Hathaway Gamers (amateur esports event organisers) (team) and Enrique ‘xPeke’ Cedeño (player), also Gillette Procter & Gamble sponsored League of Legends (IEM) World Championship (2017, , Poland)

24 Non-Endemic Brands in Esports

Brand Name Brand Owner Esports partnerships (player, team, events) Starcraft II World Champion Series (2017, Sydney, Australia); also McDonald's McDonald's sponsored EA Madden NFL Bowl (2017, Orlando, US) Has agreements with several teams - , Team EnVyUS, Evil Monster Energy Monster Beverage Corporation Geniuses, , , ; and players - Alia-A, GoldGlove, Iijeriichoii, Summit1G, TimTheTatMan, Wizzite Started Mountain Dew League in 2016 (in partnership with ESL) to win place in ESL Counter-Strike: Global Offensive (CS:GO) Pro Mountain Dew PepsiCo League; also sponsors Team , (team) and SK Gaming (team) ESL deal to promote events in , including Movistar eSports TV Movistar Telefónica channel showing Spanish and international events; also sponsors Movistar Riders (team)

Nissan Renault One of the first non-generic brands to enter the esports space

Old Spice Procter & Gamble Rocket League Championship Series (2017, Los Angeles, US)

25 Non-Endemic Brands in Esports

Brand Name Brand Owner Esports partnerships (player, team, events) e-Ligue 1 (official FIFA tournament for France's professional league) Orange Majority owned by public float (2017, France); also sponsors Millenium (LoL team)

PayPal PayPal Holdings Inc World of Grand Finals (2017, , Russia) LoL team, also sponsored Cloud9 and Team SoloMid since 2015 but apparently this will be ending due to conflict of interest with new Red Bulls LoL team; also sponsors a number of players - Artur Bloch, Olivier 'Luffy' Hay, William 'Leffen' Hjelte, Darryl 'Snake Eyez' Red Bull GmbH Lewis, Erik Lestach, August 'Agge' Rosenmeier, Masato 'Bonchan' Takahashi; also sponsors lots of esports events including 2017 events - Red Bull Kumite (), Red Bull Team Brawl (Heartstone) Samsung Galaxy Counter Strike: Global Offensive (CS:GO) Samsung Samsung Group Championship (2017, Johannesburg, South Africa); also sponsors Samsung Galaxy (team) Turner Broadcasting and WME | IMG-owned ELEAGUE (Counter- Snickers Mars Strike: Global Offensive (CS:GO) competition (2016, Atlanta, US)

Turtle Beach Turtle Beach Corporation Astralis (team)

26 Non-Endemic Brands in Esports

Brand Name Brand Owner Esports partnerships (player, team, events)

Turtle Wax Turtle Wax OpTic Gaming (team)

Turkish LOL Championship League (2017, Istanbul, Turkey); also Ulker Yıldız Holding sponsored BAU SuperMassive LoL team in 2016

Universal Pictures Comcast EPICENTER: Moscow 2 tournament (2016, Moscow, Russia)

Visa Europe Visa Inc SK Gaming (team)

Source: MediaTainment Finance; Brand Owners

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Esports can fill a gap

Anecdotal evidence indicates the growth rate for traditional sports sponsorship might be slowing down. An uncertain global economy and unpredictable political landscape are making marketers cautious about what they spend on advertising and sponsorship.

The FIFA World Cup global football tournament has been an irresistible but very expensive magnet for sponsors willing to pay hundreds of millions to be associated with the event.

But ever since Russia won the bid to host the 2018 World Cup and Qatar nabbed the contract for 2022, sponsors are said to be fearful of being associated with the allegations of corruption and cheating levied against the two countries.

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The esports USP – its audience

Whatever the truth might be about the state of traditional sports, the fact is brands are discovering a new avenue to reaching the hard-to-please Millennial and Gen Z crowd, who are also growing into working adults with disposable income to spend.

The size of the global esports audience should reach 385 million at the end of 2017, and almost 600 million by 2020, according to Newzoo.

Another research firm, SuperData Research, has reported that in Europe alone, 22.6 million viewers watched esports in 2016 and it expects that figure to grow to 30 million by the end of 2018. Furthermore, 45% of the European audience were between 25 and 44 years old, indicating it is appealing to more than Millennial and Generation Z consumers.

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Unsurprisingly, 84% of the total audience profiled by SuperData Research in May 2017 were male. But brands can expect to see the share of female fans grow in response to emerging female esports teams, such as those in the Australia-based WPGI Women’s Esports League sponsored by computer tech corporation ASUS.

As the number of esports followers picks up and their demographic profile starts to diversify, the media value of esports events equally increases, offering brands greater options in the type of relationships they wish to establish with esports talent and organisations.

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31 Copyright: ESL/Patrick Strack Esports and Brands Gaming’s New Best Friends 4. WHAT BRANDS EXPECT FROM ESPORTS Nathan Lindberg, director of esports at streaming platform Twitch, says: “Esports is going from a place where a majority of the revenue is from endemic brands to next year when the majority will be from non-endemic ones.”

Tahir Basheer, partner, digital media and esports at London-based legal firm Sheridans, adds: “There has been a steady increase in non-endemic brands entering the esports space. In recent months, major global brands such as Adidas, Gillette, Visa, and Audi have made their move and have established themselves as commercial partners within the ecosystem.”

He notes that their enthusiasm for esports has been spurred by the lower barriers to entry for brands, when compared to the high costs of sponsoring major traditional sports. “The value of some of these esports activations is relatively low but is likely to increase when the data around the returns for the brands becomes clearer.”

So what must participants in the esports business have when negotiating with brands? 32 Esports and Brands Gaming’s New Best Friends

1. Digital Wowsomeness!! The esports sector must retain its origins as a true digital-first multi-platform entertainment format. Brands have never been offered the opportunity for one performance (in this case, a gaming tournament) to be potentially available live simultaneously, worldwide, on the following platforms: mobile devices, desktop computers, streaming TV, live social media, broadcast TV, cinema theatres, arenas and stadiums. Meanwhile fans can interact with each other and their favourite esports stars via social media during a match. The potential for gathering legal but accurate consumer-targeting data could be unparalleled.

2. Value Brands envisage a partnership from which they benefit as much as, if not even more than, the project being sponsored. Esports comes with intellectual property that must be nurtured, developed and enhanced to bring added worth to the partnership. That value lies in players’ constantly evolving innovative gaming strategies and tactics. It can also be found in the demands of passionately loyal but exacting Millennial and Gen Z fans, plus young adult gamers now taking their children to esports events. 33 Esports and Brands Gaming’s New Best Friends

3. Stability Esports is a revenue-generating business played by full-time professionals but it also needs to be structured with tournaments organised and broadcast around reliably scheduled seasons. The Wild West approach once associated with such a young but burgeoning sector needs to disappear. Brands prefer organised, coordinated and harmonised codes of conduct and other related regulations. High standards in players’ welfare and salaries also assure brands of a stable working environment. Non-profit organisations like the UK’s Esports Integrity Coalition and the World Esports Association are addressing these issues plus the expected regulations needed for esports betting, gambling and anti-doping rules.

4. Ambassadors and Influencers Brands love the endorsement of sports and entertainment’s rising stars and celebrities. These could be individual players or teams with principles that aligns with those of the brands. There is a growing number of professional gamers who are happy to create original content to post on their social media sites and YouTube to reach fans in between tournaments. Meanwhile, esports. organisations and team owners are considering forming franchises centred on specific communities or geographical regions. This will give brands a more business-like framework within which to target esports fans with specific campaigns. 34 Esports and Brands Gaming’s New Best Friends

5. Like-minded Fiscal Partners Brands like to know that all participants in the esports ecosystem understand their need to raise awareness for their products and services. It, therefore, helps when all financial investors in a team or organisation appreciate the positive contributions the right brand partners can bring. And, currently, many esports investors are from sectors experienced in working with brands. They range from e-commerce goliath Amazon.com (Twitch’s owner), Chinese tech and media conglomerates Holdings and Wanda Group and several venture-capital firms to US, European and Australian football teams, rock bands, talent agencies, Norwegian and Swedish high schools, US universities, advertising agencies and media owners.

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Copyright: ESL/Helena Kristiansson Esports and Brands Gaming’s New Best Friends 5. CASE STUDIES What Brands Can Do for Esports ASUS

ASUS, the Taiwanese multinational electronics conglomerate, established its commitment to esports about 10 years ago when it formed the Republic of Gamers (ROG) brand in 2006 to target the global gaming community.

ROG, which specialises in manufacturing games-specific computers and related digital devices, has ramped up its esports-sponsorship activities this year. In January, it unveiled its first multi- year franchise sponsorship deal with US esports organisation .

Echo Fox oversees teams of professional players who compete in tournaments centred on game titles like , Counter-Strike: Global Offensive (CS:GO), League of Legends (LoL), Gears of War, and . 37 Esports and Brands Gaming’s New Best Friends

ASUS hopes to enhance what it can do for gamers by learning from Echo Fox players’ use of its equipment and technology. The ROG logo will also appear on Echo Fox players’ jerseys. Co- founded by , a three-time NBA professional basketball champion, and Jace Hall, a former Warner Bros. Interactive Entertainment executive, Echo Fox is managed by executives who have a background in working in traditional sports, media and with brands.

After the Echo Fox deal, ROG agreed to be the main sponsor of the CS:GO DreamHack Masters competition in Las Vegas in February and to form a partnership with , the 2016 champions of DreamHack Masters. In the same month, ASUS displayed its diversity credentials by sponsoring the WPGI Women’s Esports League and its all-female teams in Australia. ASUS’ support is a massive boost for a league in a sector overwhelmingly dominated by male players.

In March, ASUS got busy again and hooked up with France’s Paris Saint-Germain (PSG) eSports team, which specialises in LoL and FIFA tournaments, for the 2017 season. Also benefiting from ROG’s sponsorship largesse is the US-based NRG eSports organisation, which includes US basketball legend Shaquille O’Neal as well as Andy Miller and Mark Mastrov (co-founders of NBA basketball team Sacramento Kings) among its investors. 38 Esports and Brands Gaming’s New Best Friends

Then, ROG raised the bar in June when it announced the inaugural global version of its ROG Masters tournament, which takes place until November 2017. The international competition comes with a US$500,000 cash prize for the finalists.

Gamers from 30 markets will be invited to take part in country-level qualifying rounds, before being shortlisted for the four regional tournaments in Asia-Pacific, EMEA, the Americas and China. The global ROG Masters follows an Asia-only edition in 2016.

Ernest Cheng, ROG Global Content Marketing Manager, explains the importance of esports to its brand strategy.

Q: What makes a good lasting relationship between a brand and an esports team? A: Finding the right fit. The brand personality is essential to align with the company’s vision and mission statement. For instance, Republic of Gamers aims to provide the best gaming solution hardware for all gamers to empower them to become champions. We partner with the best gaming teams out there, and we also strive to become a brand that is chosen by champions.

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Q: What can the esports community learn from traditional sports (such as football, tennis, basketball) and their relationship with brands? A: Competitiveness, the urge to never quit or give up half way. Esports, like traditional sports, doesn’t just challenge you on your reflexes or your vision, it challenges your mind in unthinkable ways. Only strong-minded individuals can outperform the competitive and stand out against the pack.

Q: What can esports bring to brands that isn’t available anywhere else? A: A whole new attitude towards gaming. This positive impact of what gaming delivers to society can allow individuals to express themselves more and gain confidence. The fellowship and bonding that is brought to the table cannot be overlooked. Lastly, connecting individuals with the latest technology is an aspect that is important for Millennials, and helps them understand the concept of what it takes, including hard work and dedication, to play for the highest honour.

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VIVENDI

Christophe Agnus, Director of esports/Senior VP New Projects Vivendi Content, talks about the company’s dedication to esports.

France-based Vivendi, one of Europe’s biggest media and entertainment conglomerates, is taking esports by storm. As a major media brands owner, it has invested heavily in esports, which will be among the repertoire it offers marketers for their own brand and media strategies.

As part of its new Vivendi for Brands initiative, the company has amalgamated its hefty entertainment subsidiaries, which includes some of the world’s biggest content makers and platforms.

Among those assets is Universal Music Group, the world’s largest recorded-music company. The Canal Plus Group is one of Europe’s biggest TV and cinema behemoths, which includes the French pay-TV giant Canal+, and film/TV production and distribution hub Studiocanal. 41 Esports and Brands Gaming’s New Best Friends

Vivendi Village oversees the company’s innovative digital-media operations plus its live-concert businesses and venues. Its video-sharing website Dailymotion is being positioned as the premium-content alternative to market leader YouTube. And Gameloft is a pioneer in mobile- games development.

The mission is to create a value chain of popular culture that brands can tap into for their creative messages.

The European-centric Vivendi and Canal Plus Group are bringing the same mixture of international creative solutions (based on music, film, TV, games, live entertainment, ticketing, merchandising, social media, world-class talent plus original content) to its esports properties.

The Canal+ platform produces Canal Esport Club, the monthly TV and online magazine dedicated to all-things esports. It joins Canal+’s other sports-content brands like Canal Rugby Club and Canal Football Club.

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Vivendi’s esports boss Christophe Agnus says talks are taking place to elevate the popular Canal Esport Club, with its high-standard production, to a weekly show next year.

“This move will complement Canal Plus Group’s sponsorship of Team Vitality, one of France’s renowned esports teams,” he says. “They were the only French team with full contracts and the players are well paid, which gives them value because we know their organisers take care of them.”

Canal+ has joined forces with Germany-based organisation ESL to form France’s first esports league. They will use ESL’s resources as the world’s largest esports venture to organise and promote international tournaments in France. “Our esports activities are sending out the message that Canal+ is a brand that can deliver because we’re a part of the esports world,” Agnus says. “That is part of our global policy to reach the Millennials who are not watching TV.”

Canal+ esports competitions will have access to Vivendi’s network of live venues, including the famous Paris-based L’Olympia, which hosts more than 300 concerts and other live shows annually. 43 Esports and Brands Gaming’s New Best Friends

For background music, events held at Vivendi venues will be able to license tracks from the 3 million-plus song titles belonging to or managed by Universal Music Group. And Universal Music rock and pop stars that appeal to Millennials could also be invited to perform before an esports tournament begins.

But Vivendi is not just any media company jumping on the esports bandwagon. Gameloft, its mobile-games subsidiary, is one of the most respected developers internationally. It boasted 1 billion downloads in 2016 alone.

Its titles, including the racing game Asphalt, the action game Modern Combat, and the simulation title Dragon Mania Legends, are played by 140 million monthly active users. Some titles, such as the Asphalt franchise, are also being adapted for play in esports arenas.

44 Esports and Brands Gaming’s New Best Friends 6. WHAT THE EXPERTS SAY Tips from the Marketing Agencies Q: What will it take to make the esports-brands relationship last? A: As with any partnership, the success of the relationship hinges predominantly on how brands treat both the partnership and the esports audience.

From the outset, the onus is very much on them to not just see a massive fan base and think it’s enough to treat it as a badging exercise. More so than many fan groups, esports enthusiasts are incredibly protective of their sport. Couple this with the fact they are also a very intelligent group and they are able to see through any brand not attempting to add value to esports.

And that is where the key to the relationship lies for brands, in the act of adding true value to the fan base and the sport and to be seen to be making real efforts to positively contribute to the industry. Brands willing to do that, to carefully consider the role they can play and act upon it, will have a higher chance of seeing returns from an affluent and engaged audience.

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Q: What can the esports community learn from traditional sports' (football, tennis, basketball) relationship with brands? A: Esports must ensure it is protecting the rights it agrees with its partners, ensuring no-one infringes upon them whilst working with them to maximise their potential. Brands do not appreciate when a rights holder is seemingly a barrier to their plans and their interpretation of what is possible within the rights that have been agreed.

Linked to this is a need for esports to also think progressively and be open to innovation brought to them by their partners. Not everything is going to be in keeping with the ethos or goals of the rights holder but it is important to always be seen to be open rather than closed- minded.

Securing further investment through sponsorship is going to be key to its ability to grow and a knack for being able to fill multiple product categories will help achieve this. That said, esports must be mindful of the partners it is working with, always prioritising suitability and fit over the size of the investment.

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Esports rights holders should always be looking to get key decision makers to their events, whether hospitality or general seating, to experience the sport, understand it and see the passion of the fans first hand.

Finally, and arguably the trickiest of them all, as esports grows it will reach a threshold where it may become necessary to tighten up regulation and establish a UEFA/NFL-style governing body to oversee the sport. This would require buy-in from the game developers who currently act as rights holders and govern their individual leagues.

Comments by Tom Mellor Account Executive, FUSE (part of Omnicom Media Group), UK

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Q. Are any of your clients brand owners that are participating in esports or are they interested in doing so? A: In Japan, event sponsorship remains the overriding link to the esports business. Rather than working together to cultivate esports, client brands tend to take part in esports through individual events. That being said, professional leagues are becoming more active, and interest in league and professional team sponsorship is growing. To encourage Japanese brands to participate, a team in Dentsu’s Contents Business Design Centre is working to cultivate the esports market and creating customised packages that address the issues brands are facing. We continue to develop business in these ways.

Q: What can brands do for the still growing esports business and vice versa? A: In addition to corporate sponsorships where companies simply provide funding, we believe they could contribute to esports by leveraging corporate characteristics. It would depend on the category of company, but we think esports could be incorporated into a company’s leading-edge technologies. At the same time, we believe esports could be used to leverage corporate entry into the traditional professional sports marketing domain, where barriers to entry are high.

Comments from Dentsu’s Contents Business Design Centre (Japan) 48

About the Author Juliana Koranteng is the founder/editor-in-chief of MediaTainment Finance (MTF) and TechMutiny, the business journals that cover investments in international media, entertainment and creative sectors, and the impact of related digital technologies. Koranteng, a London-based international journalist, has been a contributing editor at Billboard magazine, the Hollywood Reporter, Advertising Age, and a correspondent for TIME magazine, the Washington Post, The Economist, UK national newspapers and the author of several books and reports. She is a reporter on the daily magazines published by Boutique Editions at the annual MIPTV, MIPCOM and Cannes Lions events in Cannes. MediaTainment Finance and TechMutiny are published by JayKay Media Inc, which also includes an editorial consultancy, speech-writing, ghost-writing and photography-design among its activities. @MediatainmentMT @TechMutiny

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