The high-tech new world of esports is starting to resemble stick-and-ball pro sports. Activision Blizzard's new Overwatch League could be a model of what this fast-growing business looks like moving forward.
Like the NFL, the NBA or MLB, the Overwatch is a city-based sports league, albeit on a global basis. There are a dozen teams competing around the world, from New York, Los Angeles and Boston to Shanghai, Seoul and London. There's a regular season, as well as standings, statistics, All-Star Weekend, playoffs and finals.
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The sport is filling big-city arenas that typically host NBA or NHL games. The league's Grand Finals, for example, are scheduled for July 27-28 at Barclays Center in Brooklyn, N.Y., which hosted NBA All-Star Weekend in 2015
Like their more tradtional counterparts, esports leagues such as Overwatch are attracting blue-chip sponsors like Hewlett-Packard, Toyota, T-Mobile and Intel.
The secret sauce, according to Daniel Cherry, chief marketing officer of Activision Blizzard Esports Leagues: Gaming is becoming another "global language" for millennial consumers.
"Basically, the global languages are math and music. I think gaming is becoming the third global language among the millennial generation," Cherry said. "So blue chip brands are trying to figure out how to overcome the fragmentation of media. There’s just not that many places where you have can rich content, highly engaged consumers, interactivity at the level you have via digital-based platforms like gaming and esports and the live aspect of traditional sports."
uNKOE, from the @LAValiant, always keeps an eye on his stats, and shares his settings for one of his favorite heroes, Ana.
— Overwatch League (@overwatchleague) March 18, 2018
This is Game/Set, brought to you by @OmenbyHP pic.twitter.com/bytBKjInSh
Josh Kocurek, global manager of PC gaming and esports at HP, said one factor attracting HP is the resurgence in PC gaming over the past five to seven years. Following the traditional stick-and-ball-league model allows Overwatch to instantly grab fans in a team-city-region-country format they understand, he said.
"I truly believe that over the next four or five years, as game play starts to expand in other parts of the U.S. and other parts of the world, you're going to see the local fan bases become more and more rabid and more and more dedicated to their local teams," Kocurek said. "That's a model that esports has not had up 'til this point. I really think it will be a game-changer around the audience growth of esports, as well as the longevity of fans when it comes to teams. As of right now, it’s very difficult for fans of esports to dedicate themselves to a particular team or player, because the infrastructure within esports has been pretty shaky."
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If there are similarities to traditional leagues, Overwatch is adding new wrinkles.
For one thing, it's global with teams in North America, Europe and Asia. Compare that to traditional U.S.-based sports leagues which have not expanded beyond Canada and are only now considering franchises in London and Mexico.
That global reach enables sponsors to reach younger, international consumers in esports-crazy regions such as Southeast Asia.
"We are truly a global league," Cherry said. "There’s not many opportunities where a brand can tap into a global marketplace — and a global consumer as engaged as ours."
Here's another difference: Players can watch stars practice. You don't get to watch the NFL's Cowboys strap on the pads and scrimmage, but you can stream players and teams practicing in the Overwatch League.
"All of the aspects of our league can be engaged digitally and rewatched in real time," Cherry said. "I think brands like that. There’s just so many opportunities to engage beyond the traditional in-arena or in-park assets."
Media rights fees for esports are still tiny compared with traditional leagues. Overwatch scored the biggest rights deal in esports history via its two-year, $90 million streaming pact with Twitch.tv. Compare that with the $7 billion a year that the NFL makes in TV money.
Find out what it’s like to hang with the @BostonUprising in Beantownhttps://t.co/1xvCEekd3N pic.twitter.com/DYfasJL8f9
— Overwatch League (@overwatchleague) May 24, 2018
That makes sponsorship dollars from HP and other companies even more important.
To use the stick-and-ball analogy, Kocurek notes that HP gets to be the stick and the ball in this league. Why? Because Overwatch players compete on HP's OMEN gaming PCs. Research outfit Newzoo predicts the global esports economy will grow 38 percent to $905 million million this year. An estimated $359 million, or 40 percent of revenue, will come from corporate sponsors such as HP.
"To become one of the first partners of the Overwatch League is good for us because it shows our commitment to helping grow esports as a category — and the game industry overall," Kocurek said.
Meanwhile, esports is attracting traditional sports executives looking for the next sports gold rush.
Pete Vlastelica, president and chief executive of Activision's Esports Leagues, came from Fox Sports. Cherry joined from the NHL's Devils. Steve Bornstein, chairman of Activision Media Networks, is the ex-chief executive officer of ESPN.
You'll recognize the names of team owners, too. Patriots owner Robert Kraft owns the Boston Uprising while Mets chief operating officer Jeff Wilpon owns the New York Excelsior. Then there's the San Francisco Shock. The new team boasts a Who's Who of celebrity investors including: "It" couple Alex Rodriguez and Jennifer Lopez; Shaquille O'Neal of TNT's "Inside the NBA" and Marshawn Lynch of the Raiders.
When the beautiful start investing their personal dollars, corporate sponsors are not far behind.
