In a year that has seen numerous headline international sporting events cancelled or postponed, including the Tokyo Olympics and UEFA’s Euro 2020, one international sports event in particular has remained comparatively unaffected and resilient— Riot Games’ flagship esports competition, the League of Legends World Championship (Worlds 2020), currently taking place in Shanghai, China.
The period of rapidly accelerated growth esports underwent as a result of the pandemic has been well documented. In March this year, for example, streaming platform Twitch grew its audience by a third. What was but 10 years ago a relatively underground, amateur subculture has quickly become an increasingly attractive industry for investors — some analysts believe global esports market revenue could reach almost 1.6 billion U.S. dollars by 2023.
Riot Games’ Worlds 2020 is a prime example of a successful global esports mega event in the new normal — 120 players plus substitutes playing for 24 teams drawn from 11 global regions representing 29 countries, with all games except the final being played behind closed doors without fans. But, off the back of innovative monetisation strategies, Worlds 2020 is nevertheless continuing the trend of commercialisation and revenue growth in esports.
This article looks at how Riot Games is innovating in the fields of broadcast and production value, sponsorship and brand activations, fan engagement, and advertising to deliver an esports mega event that delivers both ‘on the rift’ and commercially.
Broadcast and production value
As traditional sports stakeholders around the world have discovered, when you play behind closed doors, you don’t just lose gate receipts, you also lose the unique atmosphere created by a crowd of emotive fans watching their teams compete. As it turns out, this atmosphere contributes hugely to the overall pull of sports broadcasting, and could be among the reasons why many pandemic-era sporting events’ ratings have fallen — for example, despite the stirring LA Lakers-Kobe Bryant narrative surrounding this year’s NBA Finals, ratings declined 51% YOY.
In the Premier League, solutions such as canned crowd noise have received a lukewarm response at best, and most broadcasters now offer a red button option to watch without the added crowd noise.
Riot Games chose not to implement canned crowd noise and instead focus on other methods of improving the quality and production value of their Worlds 2020 broadcast.
Worlds 2020 utilises an AR-enhanced playing stage to improve the atmosphere of the event. The AR environment, complete with a virtual pool of water that the stage ‘floats’ on, responds visually to what happens in the game. When players choose which character to play, an animated 3D rendering of the champion appears at the back of the stage, as pictured above. Kills, buffs, and other in-game events also trigger AR visual and lighting effects. The overall impression is polished; each match feels momentous and important, despite the lack of fans’ cheers and jeers.
Sponsorship and brand activations
Whereas traditional sports properties offer sponsorship partners pitch-side advertising via electronic advertising display boards and during commercial breaks, esports properties can be more innovative when it comes to in-broadcast sponsorship opportunities and brand activations — although in-game advertising is now also a feature in League of Legends at Worlds 2020.
At Worlds 2020, the champion select phase of the game is sponsored by computer hardware manufacturer Alienware. In similar fashion, other features of Worlds 2020 gameplay and broadcast have been monetised with sponsorship deals. For example, the gold graph, which shows how much money each team has earned in the game, has been sponsored for the first time this year; fittingly, financial services company Mastercard have acquired these rights.
Red Bull have got in on the action too, with a sponsorship deal that closely aligns their brand’s messaging with League of Legends gameplay. When a team slays Baron Nashor, an in-game PvE objective, players are rewarded with what fans call the ‘baron buff’, a period of time when players’ characters deal more damage. Red Bull have bought the rights to the ‘baron buff’, rebranding it the ‘Red Bull Baron Powerplay’. The message is clear —Red Bull can improve your in-game performance.
By creating these new opportunities for sponsorships and brand activations, Riot Games are effectively maximising the commercial performance of Worlds 2020.
Customarily, during the breaks in between games, a countdown is shown indicating when the next round will begin as music pumps away in the background. However, at Worlds 2020, rather than let this time pass idly, Riot Games has monetised these lulls and leveraged them as an opportunity to boost fan engagement.
As part of an innovative partnership with Mercedes-Benz, fans can compete in a League of Legends-themed quiz to win prizes during breaks. This not only provides a valuable opportunity for the sponsor to engage with fans, but it also helps reduce audience churn during broadcast downtime. A quick look at the quiz during a break in the game between Damwon Gaming and DRX reveals an impressive 2,700 entries during the 20 minute pause.
Another fan engagement initiative is the Worlds 2020 Pick’em, a fantasy Worlds 2020 competition. This year, Pick’em is sponsored by Alienware, with fans competing to win the official Worlds 2020 PC and monitor.
These two fan engagement strategies evidence an important emerging trend within esports — the maturing and monetising of the ecosystem beyond the product itself. Just as the Premier League leverages its partnership with EA Sports to deliver the Fantasy Premier League, and Gazprom with the UEFA Champions League to offer fans the chance to win UCL tickets, so too are esports properties and sponsors looking for opportunities outside of the games themselves.
Advertising on video streaming platforms such as Twitch and YouTube — which are where most esports fans in the West consume esports content — is not as straightforward as on linear broadcast.
Whereas with traditional sports broadcasters such as Sky Sports, an advertiser can pay to secure the slot just before a Premier League match kicks off, the same is not possible on Twitch and YouTube, both of which use real-time automated bidding algorithms to determine which adverts get shown to which viewers. The end result is that each viewer will be shown a different advert depending on their aggregated internet activity. Whilst this is good for the streaming platforms as it allows them to maximise their ad revenue, for esports publishers/rights holders like Riot Games, the lack of granular control over streaming platforms’ native adverts is an issue.
However, Riot Games have found a solution to this problem — in-broadcast adverts. Rather than solely allow the advertising algorithms of Twitch and YouTube to decide which adverts get shown — and lose a sizeable portion of ad revenue to the platform in the process— Riot Games have begun selling broadcast airtime direct to advertisers. This has three primary benefits:
- Allowing brands to have granular control over when their adverts are shown — increasing the value of the advertising slot
- A guarantee that the audience watching the advert is specifically interested in League of Legends— increasing the value of the advertising slot
- Ensuring that the adverts are shown in full, whereas Twitch and YouTube usually give the option of skipping an advert after 3–5s — again, increasing the value of the advertising slot
An advert from Red Bull demonstrates the power of this advertising proposition. Rather than submitting their advert to the algorithms of Twitch and YouTube, and potentially losing thousands of dollars as their advert is shown to disinterested audience, Red Bull were able to deliver a League of Legends-themed advert direct to the millions of viewers watching Worlds 2020 on Riot Games’ Twitch and YouTube channels. Riot Games, for its part, was able to drive up the value of its advertising slots and own the commercial relationship with their advertisers, rather than going through the third-party advertising platforms of Twitch and YouTube.
Discussions around how esports will deliver on seemingly ever-rising revenue predictions are usually hotly contested. While some maintain that there are “uncertainties over the long-term viability of certain esports competition series”, Worlds 2020 is most certainly a sign of green shoots.
Riot Games’ monetisation strategy for its flagship event Worlds 2020 demonstrates that the publishers/rights holders at the heart of the commercial proposition of esports possess both the technology and the strategic innovations needed to continue increasing the value of their products, whether that be from the perspective of broadcast, sponsorship, fan engagement, or advertising.