EEDAR Explains The Opportunities ESports Opens Up For Brands

With Riot Games’™ League of Legends world championship on Oct. 31 in Berlin, research firm EEDAR has released new data focusing on the growing eSports global market. Ed Zhao, business analyst at EEDAR, breaks down the latest data and explains why sponsors and brands would benefit from tapping into this global and active fan base in this exclusive interview.

Ed Zhao EEDAR headshot

Ed Zhao, EEDAR

How big is the global eSports audience today and how do you see that growing by 2020?

We peg the global eSports market at roughly 150 million annual viewers with projected growth into 205 million viewers by 2020.We see growth in the future primarily as publishers grow more savvy with creating eSports content in addition to the growth of the Shooter genre. In particular, we think entrants in the console space and the new genre of MOBA/Shooter hybrids have a lot of potential.

What did you find surprising about your new eSports research?

A lot of our findings supported previous hypothesis; primarily, how eSports viewers were generally more engaged and more likely to spend than the average gamer. Yet one of our most surprising findings actually relates to just how deeply these eSports viewers are engaged. About a third of these eSports viewers have bought in-game micro transactions related to eSports, while about 20 percent have actually purchased an event ticket. It’s an important piece along with the attention being paid to sponsors and brands.

In addition, we were surprised regarding the importance of social media driven discovery for video games. In North America, Youtube was cited more often than gaming media outlets as a source of discovery.

What has your new research revealed about the eSports audience’s live streaming habits?

The eSports audience is highly involved with a variety of streaming sites and online media. YouTube is unsurprisingly the most prolific, with upwards of 80% of users engaging with it. But Netflix is right behind with roughly 75%. The next most popular are music streaming services such as Pandora and Spotify. About 40% of eSports viewers engage through Twitch, though that number jumps a bit for MOBA viewers.

One interesting finding is how users most often stream music through smartphones while consoles and computers are used to stream video.

What opportunities does this open up for non-endemic sponsors?

We researched a large number of non-endemic sponsors and their involvement of eSports. Generally, beverage companies have been some of the first to broach this. Companies like Red Bull and Coke have led the charge by really instilling themselves within the community. Red Bull hosts their own tournaments while Coke has sponsored League of Legends viewing parties in theatres. Many of these non-endemic sponsors have really worked to make themselves a part of the community rather than simply putting up advertisements and calling it a day.

What can non-endemic brands learn from the success endemic brands have had with eSports fans?

Non-endemic brands usually have to try a little harder. eSports viewers will already gravitate to a peripheral company like Razer due to that brand’s great reputation among gamers. Razer simply has to remind the viewers about the brand and that can drive sales. In comparison, non-endemic brands have to prove they’re really a partner and not simply there for the numbers.

What are some examples of non-endemic brands succeeding in eSports?

Coke, Red Bull, and Monster have been doing very well.

What opportunities do you see television like ESPN and TBS opening up for sponsors and advertisers?

We believe this can really act as a great proof of concept for many of the larger brands. Currently, it’s only a few major brands that have really embraced eSports. It’s something like a Coke sponsoring viewing parties or Intel with their tournaments. Many of the biggest brands are still watching, but they can see the massive upside. Today, eSports doesn’t necessarily need TV to succeed but it will help to usher in greater widespread acceptance and advertisement opportunities.

What opportunities do you see for console eSports with the new push behind Call of Duty, Halo and Smite on Xbox One and PS4?

We see consoles as a potential growth opportunity, especially within the Shooter genre. One thing to note is the how most of eSport’s growth has so far been tied to F2P PC titles. Games like League of Legends and Dota 2 are able to get so big because they’re able to reach so many people. So it’s a little harder on consoles, but we think Call of Duty has a great chance. Activision’s title still makes over $1 billion a year through premium sales. That’s tens of millions of users every year. In addition, it’s really important to keep players engaged on a periodic basis. Call of Duty’s annual release schedule should help with that, allowing for a yearly reinvigoration of interest into their eSports league.

Twitter Lays Out Plans To Attract More Users, Ad Dollars

In an attempt to regain some of its lost users, and a few more advertising dollars, Twitter confirmed a number of its new business plans shortly after revealing its third-quarter revenue for the year.

report from Adage shows that the company’s revenue for the quarter was $569.2 million, which is a 58% increase from the previous year. Additionly, it also reported an advertising revenue increase by 60% over that same time period, with $513 million, 86% of that coming from mobile ads.

That said, the company has slowed a bit on adding new users, with 320 million people using its service each month, including 13 million who use it specifically via text messaging to people who don’t necessarily have Twitter accounts. While that’s an 11% increase from the previous year, it’s a 12% decrease in growth overall from the second quarter numbers.

With that, the company is planning an elaborate new ad campaign that will promote its newly launched Moments section, which chronicles live events and invites people to take part in them. These ads premiered during last night’s World Series game, and more are being planned, including digital video and search ads.

Twitter also intends to appeal more to people that aren’t signed on for the social network, including showcasing ads to people who use Twitter, but aren’t logged into a specific account. These ads can still generate revenue, despite people not using the site as a logged-in user. In addition, it’s also trying to advertise on other sites and apps through services such as TellApart, which it acquired back in April, as well as the Audience Platform mobile ad network it recently launched. The Audience Platform network alone managed to generate $66 million for the third quarter, a 931% increase over the previous year.

Twitter is also looking to appeal more to advertisers, especially since rival services like Facebook and Instagram attracting more of them.

Video also played a part in the company’s report, with Twitter COO Adam Bain explaining that cheaper video ads could be of greater value to advertisers. “After introducing autoplay video, marketers saw an 84% decrease in the cost-per-video-views on Twitter. Additionally our marketers saw a 7x increase in the amount of video completions,” said Bain.

With the launch of a new DoubleClick pilot at the end of the year, it should make “measurement and attribution available for a small number of our joint customers,” Bain added.

The Future Will Be Wild For Wearables

Even with some skepticism over devices like the Apple Watch upcoming Microsoft Band, it appears that wearable tech sales are on the rise based on a report by eMarketer.

An estimated 39.5 million U.S. adults age 18 and over will use some form of wearable tech in this year alone, including both fitness tracking devices and smart watches. That’s almost 58 percent more than last year, which is likely spurred by the release of the Apple Watch last April.

Penetration is a bit on the lower end with these numbers, coming in at just 16 percent, but eMarketer estimates 81.7 million people will be using these devices by 2018, which is double the number reported for this year.

Wearable tech seems to be most popular with U.S. adults in the 25-44 age bracket, who mainly use them for data and fitness tracking. 25.1 percent of Internet users between 25 and 34 years-old will use wearable tech this year, followed by 23.1 percent of those in the 35-44 year-old group. These numbers will rise by nearly 50 percent among 25-34 year-olds, and 47 percent of those between the ages of 35-44 in 2018.

Furthermore, there will be adoption growth across all age groups by 2019.

  • 18-24 will see an increase from 21.9 percent to 46.5 percent
  • 25-34 will rise from 25.1 percent to 51.6 percent
  • 35-44 will see a lift from 23.1 percent to 48.7 percent
  • 45-54 will go from 17.1 percent to 33.3 percent
  • Adults over the age of 65 see a slow but marked increase from 9.7 percent to 20.7  percent

Males and females alike seem to be getting into these devices, particularly FitBit fitness band. 19.3 percent of male Internet users will use one for this year, followed by 18.2 percent of females. 2017 is expected to look very different, with females dominating at 34.1 percent, while by males will be at 33.9percent.

Although some consumers may not see value in wearable devices at the moment, the fact that these devices can track fitness and health will likely make it more appealing. “The consensus among the experts we consulted was that advertising will not appear in volume on wearables until one or more of the devices attains significant market share, which makes sense considering scale is a critical aspect of digital advertising,” says eMarketer senior analyst Cathy Boyle.

The full report can be found here, while the elongated AdWeek infographic, which breaks down the wearable tech demographic numbers collected from the NPD Group Connected Intelligence can be seen below.

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Kabam: “Launch Is A Big Deal In Mobile Now”

As consumers look for more top-notch games compared to “quickie” titles that release on the market, it is clear that mobile is undergoing a sea change.

Kabam president Aaron Loeb recently spoke with GamesIndustry International about how the mobile market is changing, particularly with production, distribution, marketing and consumption of games in app stores. The idea of keeping momentum within the ever-changing mobile environment is key to survival, according to him.

“Five years ago, mobile could best be characterized as a market where the best attribute you could have as a developer was speed. Today, the best attribute you can have as a developer is reliability,” he said. “That requires different studios, that requires different leadership, and that requires different ways of thinking about steering development.”

For Kabam, launch has become an increasingly important factor in the success of a mobile game. “It is these launches that set the trajectory of a title. The launch if a big deal in mobile now, in a way that it wasn’t a few years ago. You had the sense that you could build a business over two years. You still can do that, by the way, but you don’t get two chances to make a first impression.

“We are certainly thinking about how to make a very compelling, very satisfying experience at launch, which then continues to grow after launch…we don’t agree with [MVP strategy] any more. We believe we can look at the market now, and see the tastes of the customer and the player, and we can determine at some root level what is a good game and what is a bad game. That doesn’t mean that if you release a good game it will succeed – it’s still an incredibly competitive market – but at the very least you can have more influence on the outcome than treating it all like a coin toss.”

Loeb is very familiar with the market, having previously worked for Electronic Arts before joining Kabam last year, and teaming with CEO Kevin Choi to make it a defining leader in mobile, behind such games as Marvel Contest of Champions and Spirit Lords. “The point is that we’re taking the best design elements of those traditional games that our team members have been building for years Diablo, Dragon Age, real classics and bring them truly into mobile,” said Loeb. “We’re not trying to recreate your love of Diablo in the 90’s. We’re trying to create a new language of games for mobile.”

And that means deepening the mobile experience from both a consumer and marketing perspective, and not necessarily just putting out games just to have them on the market. “Games that are purely versions of Solitaire minimal attention, brain-clearing exercises will always have their place in mobile, but more sophisticated mobile consumers want games they can have meaningful relationships with,” he continued. “So character they care about, and other players they can care about, in ways both good and ill.”

As far as the players are concerned, “[They] are demanding games with more compelling loops, a richer sense of gameplay satisfaction,” he said. “The historical notion of what that means from the console industry is deep immersion, 80 hours of gameplay, you can disappear into your man or woman cave and never come up for air. That is not great mobile gameplay.”


Lara Croft’s Adventures Chronicled On Instagram

Microsoft already off to a good start for the holiday season with the release of Forza Motorsport 6 and the forthcoming Halo 5: Guardians for Xbox One, but it’s also got another ace up its sleeve with the exclusive sequel Rise of the Tomb Raider set to arrive next month.

In anticipation for the return of Lara Croft, Microsoft is working alongside the developers at Crystal Dynamics to set up a pair of Instagram accounts that highlight her backstory, which will tie in with the forthcoming sequel.

Accounts include the Tomb Raider Journal, which shows doodlings from Croft in a special book, chronicles her many adventures. The page is currently set to private, but anyone who requests a follow should be able to access the account on Instagram and see the extraordinary amount of detail that has gone into these journal entries.

The second is Tomb Raider Research, which is a peek at Lara Croft’s virtual bulletin board. It features a number of items from her previous years, including a graduation picture, drawings from previous expeditions, a mysterious family photo and a number of newspaper and book clippings. Each one looks to also tie in with what’s happening in the world of Rise of the Tomb Raider, even if the general focus remains on adventure.

Lara’s previous “reboot” adventure, simply called Tomb Raider, released in 2013, introduced a tale of a younger Croft, experiencing her first adventure after crash-landing on an island filled with dangerous creatures and hunters alike. Throughout the game, players learned new skills with her, eventually making her into the rough-and-ready treasure hunter she’s grown up to become.

The game was a big success with both critics and audiences, selling millions of copies. That prompted Microsoft to sign a deal with Square Enix, giving it a one-year exclusivity window with the Xbox One, which was announced earlier this year.

It looks like these Instagram promotions may be the start of an bigger Rise of the Tomb Raider marketing campaign. Following the release of Halo 5, expect big TV and advertising exposure, and a big push for the special Xbox One bundle that will release this holiday season, which packs both the previous game and Rise of the Tomb Raider in with the Xbox One gaming  system for $399.

Kassi Horn, associate director of social media, for Ayzenberg, spoke about this new promotion.

How did the idea for the Instagram Tomb Raider Experience come about?

It was a very collaborative process between Microsoft global teams and agency partners to identify the best way to extend the Rise of the Tomb Raider narrative in social. Looking at audience research, broad appeal of the Tomb Raider franchise, and desire to execute on a global level, we landed on Instagram as the right place to bring this next chapter of Lara Croft’s story to life.

Why was Instagram an important platform to promote Rise of the Tomb Raider?

There are a number of reasons we selected Instagram to tell this story:

  • It s proven to be one of our most engaged channels for Xbox so we know there is a robust community of gamers with an appetite for visually immersive content.
  • Instagram is all about discovery. And so is Rise of the Tomb Raider. Creating this experience is largely about giving fans a new ways to discover Lara Croft as she ‘Discovers the Legend Within.
  • It s also an important channel for our global counterparts, allowing us to share this narrative on a much bigger scale and work with Crystal Dynamics to engage Tomb Raider enthusiasts around the world.

We re seeing more of an attitude shift towards Instagram as a robust storytelling platform. How did you work to incorporate the story of Rise of the Tomb Raider into this execution?  

Drawing on inspiration from other successful executions, for example Rick and Morty s Rickstaverse and Old Spice s Choose-Your-Own-Adventure story, we really took a step back and thought about what makes Lara who she is the harsh environments, the answers she seeks and the courage that keeps her going and how we could use Instagram functionality to connect the dots. We wanted to give fans a glimpse of the stunning gameplay visuals and what they can expect from Rise of the Tomb Raider, at the same time driving them to dig deeper into Lara s transformation and the journey she s about to embark on. It was also important that we create a truly integrated campaign that would align to the digital experience and its Sky/Earth/Fire elements. For those who want more, we hid a Private channel within the experience, giving fans a reason to check back as new entries are added to Lara s Journal:

In what ways is this experience being promoted?

Promotion from Microsoft and Crystal Dynamics, paid social activation, amplification from Microsoft regional teams. We are also working with Microsoft PR to identify additional opportunities. This is one piece of a much larger machine, with more exciting news to come in the lead-up to launch!

Those anticipating Lara’s return and who isn’t, really won’t have to wait long, as Rise of the Tomb Raider debuts on November 10th.

James Bond Picks Up First Devoted Snapchat Discover Channel

James Bond’s newest big-screen spy adventure, Spectre, is just days away from its release, and Sony Pictures isn’t wasting any time in promoting the movie starring Daniel Craig, The company has poured some big money into Snapchat to advertise on its very own Discover channel.

AdWeek recently reported that Sony is the first company to pay the popular social site for an exclusive channel to advertise the film using “sponsored” content. By clicking on it, users will be able to access content from the film for the next 24 hours, including exclusive interviews, photos and behind-the-scenes vignettes with director Sam Mendes and the production crew.

This is a big change from Snapchat’s usual advertising model, which allows brands to advertise in Snapchat Discover within service’s pre-set stories as sponsored content, Live Stories or interstitial ads. By devoting an entire channel to Spectre, Sony is able to bypass those rules and provide promotional content directly to dedicated Bond fans.

Sony tweeted about the channel on its James Bond-devoted Twitter account, explaining, “Today only on Snapchat you can access #SPECTRE content on the first-ever Discover channel created for a film.”

So far, the Snapchat promotion seems to be working, with many users pleased with the results.

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While Snapchat isn’t confirming whether or not companies will take over full channels in the future, the experiment seems to be paying off for both sides. So, the possibility of seeing more channels like this in the future is very likely.

Meanwhile, the Snapchat promotion is the latest for Sony in its promotion for Spectre, which not only wraps the current storyline surrounding James Bond films, but could also be Daniel Craig’s final appearance as the super spy. It’s expected to be a big box-office hit, both in the U.S. and internationally, when it opens on November 6th.

Sony Introduces PlayStation Plus League

With the recent announcement that Activision Blizzard is forming a new eSports league headed by an Ex-ESPN CEO, and the recent release of Halo 5: Guardians (with deep eSports features), it shouldn’t be a surprise that more companies want in on the ever growing phenomenon. Now, with a new PlayStation Plus League website, it appears Sony wants its turn, introducing a new competition-based tournament.

Although Sony didn’t reveal any specific details about the tournament during its Paris Games Week presentation this morning during , the website reveals that the league will involve a number of popular PlayStation 4 games that include Ultra Street Fighter IV, Pro Evolution Soccer 2016, Rocket League, DriveClub and others. The tournament is advertising a cash prize of 20,000 euros, and is set to kick off later this week, with more to be held “throughout the year.”

Sony 1027

PlayStation Plus members will be able to participate in the tournament across Gold, Silver, and Bronze Divisions. Each Division has specific eSports-based challenges, with Gold featuring the top 32 players with a monthly prize pool of 150 pounds, with the bottom 11 being moved to the Silver Division.

The Silver division monthly includes a monthly prize of 50 euros, with the top 11 players moved up to the Gold. All those that don’t make it to Silver are lumped into Bronze, where there don’t appear to be any prizes of note.

The tournament is set to take part across several seasons of play, similar to what TBS is doing with its primetime Counter-Strike themed eSports show, which launches sometime next year.

Sony Computer Entertainment of America hasn’t revealed details on this competition coming to the United States just yet, but with all the popularity that surrounds eSports right now, it’s likely to come sooner rather than later. December would be the opportune time, when the company hosts its annual PlayStation Experience event in San Francisco.

In the meantime, Sony’s press conference today built up plenty of buzz with new footage of upcoming 2016 releases such as Uncharted 4: A Thief’s End and Horizon: Zero Dawn. Sony also announced development of a new Gran Turismo game for PlayStation 4 called GT Sport. It’s likely that these games could play a part in the tournament down the road, especially with both Uncharted and Gran Turismo featuring high action multiplayer support.


Fewer Deals Are Being Made In The Games Industry

Deals are often made in the video game market, mainly with key acquisitions or partnerships that allow new franchises to shine, or older ones to flourish.. That said, this new article from VentureBeat indicates that some of these deals haven’t been happening in the gaming industry as often.

The site’s numbers indicate that total deal value, including investments, mergers and acquisitions and new IPOs, fell 82% from 2014’s statistics, and that games investments as a whole also fell 35% from the previous year. Mergers and acquisitions dropped 74%, and the IPO market is also in lowly figures.

Previous numbers from the last quarter indicate that these deals dropped 90%, with the total market for game exits reaching a 93% drop without take-privates, according to the article.

More specifically, in dollar sense, the drop in deal value could see a huge loss for this year, going down as far as $4.3 billion in total, compared to $24 billion in the previous year. The market hasn’t seen that low a number since 2007.

In terms of investment, over $700 million was put into games for the first three quarters, mainly across mobile and technology sectors, followed by console and PC.

Meanwhile, Chinese MMO game developer Perfect World and mobile games company CMGE, both of whom were delisted from the market after mergers, continued to clean up with $1.2 billion in games deals. However, this is still a drop over last year, which including acquisitions of Mojang (of Minecraft fame) by Microsoft, Twitch by Amazon and Oculus VR by Facebook.

That said, there’s still time in the remainder of the year for big deals to be made with partners, and there’s hardly any sort of deathknell on the video game industry, which continues to thrive in PC, console and the mobile front. In fact, the Chinese tech and gaming giant NetEase announced a $2.5 million investment in the startup developer, Reforged Studios. But the drop in “big deals” is noticeable, although we’re certain we haven’t seen the last of them.

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Why NetEase Is Investing In Indie Game Companies

One of the biggest internet tech companies in China, NetEase, announced today that its NetEase Capital Venture arm is investing $2.5 million in the independent video game developer Reforged Studios in an effort to increase its brand presence in the West. The money will go toward giving the studio additional resources to both “accelerate and enhance development projects both existing and new.” At a time when many US companies are looking to China for its growth, NetEase is looking to expand in the opposite direction.

Based out of Helsinki Finland with an office in Los Angeles, Reforged Studios was founded in 2015 by a group of industry veterans who have worked at high profile companies like Riot Games, Blizzard Entertainment, Electronic Arts, Ubisoft and many more. It is currently working on its first game, an epic fantasy army battler, that is expected to release on mobile platforms in 2016.

With its main headquarters in Beijing, China and an office in San Francisco, NetEase offers a broad range of internet services, but is chiefly known for developing its own games in addition to operating licensed ones, mostly developed by Blizzard. These include popular titles such as Fantasy Journey to the West, World of Warcraft, Hearthstone, and StarCraft II among others. Reforged Studios is one of several key Western studios NetEase has invested in as part of its aggressive pursuit toward a “vision for globalization and expansion westward.”

[a]listdaily speaks to Amy Huang, Assistant Vice President of NetEase Capital, to find out more about what led to this investment.

What convinced NetEase to invest in Reforged Studios?

NetEase Capital is a venture arm of NetEase Inc. founded in 2012, initially with a $500 million fund for VC investments in early-stage technology companies and Reforged joins our portfolio of nearly twenty studios from around East to West, following Counterplay Games, Red Accent Studios, Motiga, Artplay, and many more mobile teams in China. These investments drive our goal to achieve complete globalization in the coming years, helping to expand our market successes in China overseas throughout Western regions and core markets around the world. As for Reforged specifically, the studio s leadership and talent that came together to form the studio offered a pedigree that s difficult to find elsewhere, and their passion for making great games for core audiences was something that matched our interests. That passion and vision, along with the experience of the team, drew us in and we look forward to a long-term relationship that sees them succeed.

$2.5 million is quite an investment, far exceeding the $500,000 offered by the NetEase Success Fund. Why such a high investment, and will Reforged still retain the rights, creative control, and full ownership of its game?

We see huge potential in Reforged and are excited to be making a sizable investment that will help them grow from an early-stage indie to a professional studio that can compete on a global scale.

NetEase Capital operates the same as most early stage VCs. As an equity investor, we look for long term returns. Reforged definitely retains creative control and rights of their company, and most certainly owns the IPs to their future games.

What are the benefits to investing in an independent developer like Reforged Studios?

Rather than a decision driven by the region, we were drawn to the talent pool that made up Reforged Studios and their future potential. Of course, the Nordic region, especially Helsinki, is world renowned for its game development prowess, but the pool spread out between that location and Los Angeles made it especially appealing. Ultimately, in addition to the team, it was their passion and vision that drew us in, and we look forward to a long-term relationship that sees them succeed.

How does Reforged Studios fit in with other NetEase investments like Counterplay Games, Red Accent Studios and Motiga?

Reforged Studios is in good company alongside our further investments in the gaming space. This is a highly talented group of studios creating different kinds of games across mobile, PC, and online platforms. The talent of these studios and this range of games and platforms is key to our goal of globalization.

How important are video games to expanding NetEase’s growth in the West?

Video games are a core area of NetEase s business in Asia and the West, and will continue to be as we expand further across the globe.

‘Halo 5: Guardians’ Launch Brings Together Fans For A Global Celebration

With events happening today in cities like London, Hong Kong, New York and more and a six hour long live broadcast on YouTube, the excitement for Halo 5: Guardians is at fever pitch. The launch is the first of it’s kind– a truly global event that intends to bring together fans worldwide to join in the big countdown to 12 am EST, when the game officially goes on sale in North America.

Millions of our fans around the world are waiting in anticipation of the launch of Halo 5: Guardians, so we wanted to do something special for them and launch a video game in a way that has never been done before, said Aaron Greenberg, head of games marketing for Xbox in a blog post.  We are excited to stream the Halo 5: Guardians launch exclusively through YouTube so fans can share in a New Year s Eve-like countdown moment together.

In addition to the YouTube stream and events in select cities, there are special events for fans in all Microsoft stories, where the event will be streamed and with a $25 purchase, fans can get an exclusive game poster and a chance to get hands-on with the game early. There’s even a sweepstakes for a trip for 2 to visit Seattle and tour both Xbox and 343 studios.

Halo 5: Guardians is the game we have always dreamed of making, and it was important to us that Halo fans in every corner of the world could join us in an epic-scale launch celebration, said Bonnie Ross, corporate vice president and head of 343 Industries. Whether they tune into the live broadcast on YouTube or come out and celebrate with us in person at one of our global fan events, we hope Halo Nation will help make Halo 5: Guardians the biggest game launch in Xbox history.