The exciting uncertainty of esports' future

Nielsen Esports managing director Nicole Pike isn't in any kind of rush to answer the big questions of the esports industry. After over a decade of watching gaming and esports data with Nielsen, she's learned to be patient -- a trait reflected in her view of esports at large.

Nielsen officially kicked off its esports vertical in 2017, and further cemented its position and interests with the 2018 acquisition of SuperData. The company had been dabbling in esports prior to these announcements, and Pike says that the data firm eventually decided it wanted to be all-in on the rapid growth it saw in the industry. The goal? According to Pike, it's providing transparent, informative data for those who, like Nielsen, are ready to jump in.

"We are focused on providing clean, clear, accurate data on the esports space for everyone across the ecosystem. Our goal is to get more data in more people's hands so that they're making the best decisions possible for the space. And we feel we can help the space to grow in a way that's healthy and sustainable and really supports everyone that's involved in the ecosystem."

Pike has been working with the Nielsen esports vertical since it launched, and with gaming and esports in general at the company for far longer. As a result, she's gained a relatively wide view of how esports audiences have grown and changed over the last several years, and she's preparing to share some of that insight in a keynote at Esports BAR in Miami on October 2.

"Early on, [the conversation] was very much like 'Esports 101' to the audiences. And each year, it's gotten a little more detailed"

This isn't her first visit to Esports BAR. Pike has been involved with the event since its inception in Cannes, France, and though her focus there naturally continues to center around Nielsen's expertise of how data can be used by brands and advertisers to better invest their money in esports, she says the conversation has evolved considerably even in just the last two years.

"Early on, [the conversation] was very much like 'Esports 101' to the audiences," she says. "And each year it's gotten a little more detailed in terms of specifically what we're talking about, but also how deep we get within esports. We're looking at different intersections of the fanbase, how esports interacts with the broader media base, and all that. This year is an evolution of that, specifically getting into how data can help brands, advertisers and rights holders to understand how effective their actual activations are."

Pike adds that her talk has been able to evolve because the brands that entered esports early have felt more comfortable talking actively and loudly about their success, lending legitimacy to what may have once been seen as a risky investment.

"You're starting to see more brands proactively talk about their success within esports and activating in the esports space. That obviously creates awareness, interest, and excitement from other brands, whether it's their competitors or just other companies in the space in general.

"I also think that companies across the ecosystem are really starting to value and invest more in data and information that's more nuanced about esports. So it's making it easier to take the conversation further for a company that's looking to invest, beyond just, 'Here's what eSports does.' There's just more information at more people's fingertips that's being used in the right way, where people can quickly see the value at a high level and then dig down quickly into what's next and how they can get involved."

One component of that information, as well as the ability to dig deeper into what that information means for investors, is a broadening of the market over the last few years. Initially, she acknowledges, the basic pitch for investing in esports was that it appealed specifically to men ages 18 to 34, a demographic viewed as difficult to reach by many. But now, she says, audiences are diversifying into a number of different demographics, personalities and identities, as teams and individual players find audiences that connect with them specifically.

And that, in turn, has helped the appeal of esports.

"One of the things that we've heard a lot in the past, oh, even six months... is that brands are very concerned about the diversity of the audience they are reaching, as well as the diversity of their portfolio. So while they certainly see esports as an exciting opportunity that can help them with some very targeted outreach, they also want to make sure that if they invest in eSports, that they're not going to seem anti-diversity, as well. We think there's a lot of excitement among brands seeing that increasing female fan base.

"You can have all the logos in the world up there. But if it doesn't translate to an increase in sales, then it hasn't been successful"

"I think brands may actually play a really big part in kind of helping promote and financially support some of that outreach to female fans, which I think is much-needed. And obviously, female, so I'm a bit biased, but there is a huge untapped opportunity there."

Though numerous people involved will regale you with stories of how esports is growing, Pike acknowledges that the industry is still young. Right now, its biggest growth draw is its rapidly-increasing reach, as esports awareness and interest bubbles up in different countries each year. But just because people know about esports doesn't make it profitable, so I ask Pike if invested brands were beginning to see returns, and where those returns were coming from.

Pike's response is that, yes, esports is just beginning to take off, and that going forward the returns from esports investment will primarily be driven by the strength of growing professional leagues, such as the Overwatch League. She predicts that trend will continue as these leagues enter their second, third, fourth and more years, and began to mature and settle into the partnerships they take on. The bottom line is: it takes time.

"As esports grows, the leagues get more time under their belts, and you're also increasing the stickiness between fans and leagues," she says. "One of the things that we look at is how sponsorships and brand relationships with esports organizations are growing fan affinity for the brand over time. Because at the end of the day you can have all the logos in the world up there, but if it doesn't translate to an increase in sales, or whatever their KPI is, then it hasn't been a successful campaign.

"Esports ten years from now will not look anything like it does today"

"People that are getting engaged are still building the relationship and loyalty to some of these games or leagues, which is giving brands incremental value. They're getting closer and closer to being able to monetize and benefit in the way they were hoping to when they first activated."

If it isn't already clear, Pike is optimistic that time will only improve the profitability of esports investment, though she acknowledges she can't predict what the future holds. She's glad to see esports branching onto TV broadcast networks, but doesn't think it necessarily matters where the content ends up, as long as people can find it. She has a particular optimism for collegiate esports.

"In the next couple of years, I think collegiate esports is going to be fascinating to see evolve and develop. For now, the NCAA has decided to step back and not become involved, but then you see Riot quickly decided that they're going to do something like that for League of Legends, and there's a ton of excitement around that within the industry."

And while she can't say with certainty what will be the next be thing in esports five, ten years from now, she's confident that whatever it is, esports in 2029 won't resemble anything close to esports as it is in 2019.

"I think esports ten years from now will not look anything like it does today," she says. "And I think that's totally okay, and it's why I'm super excited to be in esports. The games move quickly, the team organizations move and change and develop quickly. We've even seen in the past few months several acquisitions and consolidations, and I think that is all going to continue to change and shuffle.

"At the end of the day, eSports is a form of entertainment that is reflecting a greater movement in the entertainment and media landscape of how people -- especially younger people -- are consuming all types of content. And I think because of that, esports has a very long shelf life and great growth potential. We're still so early that we can't reasonably say we know what it will look like in ten years, but it will still be there. And I'm super excited to be a part of that."

Gamesindustry.biz is a media partner to Esports BAR, which is run by Reed Midem, a subsidiary of our parent company Reed Exhibitions.