2020 was a tough year for sports clubs and rights holders with the closure of stadiums, reduced revenue and a very different set of challenges to address. One of those challenges related to gaming and esports.
While many clubs and rights holders have ventured into the realm of gaming and esports it has not all been plain sailing. We now have crossover leagues such as the NBA 2K League, virtual Grand Prix for F1 and Formula E and various crossover activations for football (soccer) leagues. Although this sounds good, sports execs are still struggling to develop robust strategy around gaming and esports.
A recent PwC report highlighted that sports execs see the greatest revenue potential in gaming and esports. The same report also referenced that developing an effective monetisation strategy, game choice and how to create engaging content for the audience were a few of the challenges being faced.
Key questions for Sports Execs to answer
I want to go a step further than that. I want to pose 5 key questions that I think sports execs need to be focused on answering when it comes to their gaming and esports strategy. If they are able to answer my questions, then solutions to all 3 of the top challenges listed above (content/monetisation/game choice) will naturally flow from the answers.
Gaming is an industry worth $150+ Billion compared with esports pushing towards $2 Billion. That is a big difference and one that is often forgotten. Clubs and rights holders who move into an adjacent square by using the virtual version of their sport may be missing out on sizeable revenue elsewhere.
These are the questions sports clubs and rights holders should be focused on answering to develop a robust gaming and esports strategy.
- How do you generate revenue from existing fans who don’t like the virtual version of your sport and play other games?
- How do you generate revenue from games players who will never visit you on matchdays?
- How do you generate revenue from casual fans who don’t watch sports but spend their time playing games?
- How do you differentiate content for Gen-Z and Millennials who have different content consumption habits?
- Who can you partner with to help open new doors and ways to engage/monetise your fan audience?
If sports clubs and rights holders only focus on the virtual version of their sport, they will only ever reach a percentage of the total addressable audience. I acknowledge this may be easier to say than do due to political considerations, existing agreements and so on which is why I included question 5.
Clubs and rights holders have data about fans and methods to communicate with them so what partnerships can be established to help drive new revenue streams? It doesn’t always have to be focused around the core sports of the club/rights holder. We’ve recently seen football clubs expand into the world of Fortnite with club jerseys available for purchase and this follows a similar exercise by NFL teams with Fortnite. The clubs involved have started to reach wider than just the virtual version of the sport they play and have engaged a different audience. They have taken the first step in answering my questions and in doing so have generated new revenue.
If you are reading this article as a Sports Exec I encourage you to register for our Executive Briefing which looks at 14 market observations from 2020 and highlights 5 key challenges facing sports clubs and rights holders. It also starts to explore ways to address these challenges.
For everyone else reading – I hope the 5 questions that I’ve posed can help you to think differently about your business.