YT Gaming (50B), Netflix (52B), Hulu (9B)

Esports Business Summit Highlights

This past week I was in Las Vegas speaking at the Esports Business Summit. It was a fantastic conference at the MGM and was well attended by those in the industry. Below are a few of my takeaways from the conference around YouTube, media, and the collegiate scene.

YouTube Gaming: Ryan Wyatt, the head of YouTube Gaming, gave a keynote around their focus in regards to esports:

1. Building the global audience, not just NA, especially through non-exclusive distribution deals. (content deals from the streaming companies will continue to accelerate)
2. Helping gaming businesses & influencers monetize in more ways than just live. (makes sense because YT is a discovery platform)
3. Enhancing the viewership experience and fan rewards through their account linking program with publishers. (engagement and monetization will follow)

​They also mentioned that YouTube Gaming alone had 50B hours watched and 200M DAUs in 2018. For context, I looked up how that compares to Netflix and Hulu. The below chart shows that the consumer sees the gaming industry as yet another form of engaging entertainment:

Media / Sponsors: in esports, sponsors today have more tools and data at their disposal than they did a few years ago. This is allowing for a more analytical approach from non-endemic sponsors as they look at entering the gaming/esports space. I spoke with several Fortune 100 brands who are leveraging tools, platforms, and the strategies of their piers as they increasingly direct more marketing dollars to esports/gaming.

• Nano-Influencers: There is a lot of focus on nano-influencers right now (endless upside, lots of room to test/learn). - note: this is why we invested in Opera Event a few months back (nano-influencer monetization at scale)
• Experiential Retail: The future of retail in experiential and gaming is at the center of this conversation, especially given the crossover it has with entertainment, music, and family.
• Brand Hesitations: gaming companies are having an issue where some buyers don’t want to put their jobs on the line to try something new in esports or gaming. Gaming companies are using data to translate success in gaming for these individuals (especially agencies).
• Genre Focus: there is now a trend of brands breaking down each game genre, which has a very different demographic across RPG, FPS, MOBA, FGC, etc
• Media Rights Buyers: Twitch is finding it challenging to work with the linear TV (past) buyers who still run brand spend, whereas Twitch is non-linear platform (future). They are seeing a lot of success using linear stats, especially AMA (avg minutes watched), to bridge the gap.

Collegiate Scene: the collegiate esports scene is still very early on in its development. While there has been great progress over the last few years, the infrastructure and school-buy-in is still in its infancy.  A major debate is whether the collegiate scene will play a key part in the “path-to-pro”, given that many professional esports athletes are going pro much earlier than age 22. Many of the esports team CEOs think that college won’t play a key role in their recruiting and that they will adopt the academy model that we see in European soccer. Naturally, the collegiate scene leaders disagree, yet they will need recruitment validation from the pro-scene to disprove this.

• NCAA: the NCAA decided not to pursue esports primarily because they don’t own the right to sell the media rights of the underlying game, which is how the NCAA makes money. Collegiate leaders (colleges, leagues, service providers) have varying opinions on whether they are disappointed or happy with the NCAA’s decision to pass on tackling esports. Most are happy that the NCAA passed on it because of how the NCAA has mishandled traditional sports (compensation, etc). I found it interesting that the collegiate program at Riot Games (League of Legends) is disappointed. They predominantly wanted the NCAA involved because they have the infrastructure already in-place for student wellness and eligibility. Riot agrees that NCAA does many things poorly, but they are an existing infrastructure. I would argue that this will be built relatively quickly over the next couple of years (many are working on it).

• The Big East: their esports league is up and running and the demand for the esports program came from the top down, due to the Presidents of their institutions asking for it (interesting). They currently don’t allow for First Person Shooters (schools can run FPS separately from the Big East program). Each school runs their esports program out of a variety of departments: athletics, student affairs, IT, etc. Today, 96% of their esports athletes are male, something they are focused on changing. There are 4 key pillars to how the Big East looks at esports: 1) game content (approving games), 2) amateurism (talent development), sportsmanship (monitoring in-game dynamics), and wellness (health).