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Online tournaments keep Southeast Asian esports revenues flowing during pandemic

League of Legends International College Cup at E-Sports and Music Festival (Photo by Budrul Chukrut/SOPA Images/LightRocket via Getty Images)

Chris Tran, head of esports in Southeast Asia for League of Legends publisher Riot Games, and Mark Chew, managing director of marketing agency Reddentes Sports, spoke to SportBusiness earlier this month as part of SB24’s video series exploring the impact of Covid-19 on the sports industry. Chris and Mark told us what sort of impact the pandemic is having on esports, how esports properties are responding, what opportunities are emerging, and where esports is at in Southeast Asia more broadly.

Esports properties in Southeast Asia are faring better than their traditional sports counterparts during the Covid-19 pandemic. Although not unaffected – with live events ruled out for now – tournament play is continuing online in properties such as the League of Legends Pacific Championship Series.

Asked if esports was capitalising on the shutdown of traditional sports events, Chris Tran, head of esports in Southeast Asia for League of Legends publisher Riot Games, first of all said the sector was not immune.

“It’s caused significant disruption for esports in general,” he says. The League of Legends 2020 Mid-Season Invitational, the game’s second-biggest tournament after the annual World Championships, has been postponed, and may even be cancelled.

“We’ve seen similar disruption with a lot of our other leagues in America, Europe and China where they’ve had to be paused and moved from an offline situation to an online situation,” Tran adds.

Riot’s Pacific Championship Series (PCS) in Southeast Asia has managed to run on schedule, after resolving some early technical issues.

“What’s important for Riot Games and its partners is that we continue to try to entertain people and keep them at home in as many ways as possible,” Tran says.

Commercial revenues have continued to flow for esports events that have been able to run online. Tran says: “The way our revenues are structured for esports is largely anchored around broadcast and sponsorship. The pandemic creates a lot of uncertainty, so new business has been impacted. But as long as the show goes on, as long as there is a broadcast, then we have sponsorship and media rights value and that the virtuous circle continues.”

Live event revenues have stopped, but they are understood to account for a small proportion of overall industry revenues and come with considerable staging costs.

Riot is planning to launch new games this year and is also working with the World Health Organisation on an initiative called ‘Play Apart’, encouraging people to maintain social distancing by playing games online.

Mark Chew, managing director of marketing agency Reddentes Sports, a Singapore-based agency that has been expanding into esports and works with Riot Games, said the pandemic was creating some new opportunities with broadcasters, albeit they are emerging slowly.

“With the absence of live sports programmes over the last few weeks, we have been going around talking with our various partners in the market. Initially, traditional broadcasters were saying they would not like to consider esports,” Chew says. But as the shutdown has continued and doubts linger over when live sport will return, more broadcasters are showing an interest, he says.

Weighing against this opening window of opportunity, broadcasters are trimming their budgets during the financial challenge posed by the pandemic.

Audience fit

Chew and Tran say there is a large crossover between the traditional sports audience and the esports audience, and so esports content is good replacement material for the missing traditional sports.

Most sports viewers at some stage engaged in gaming, Chew says. “Right now, with the withdrawal symptoms from live sport affecting many sports fans, they are asking, ‘What do I do at weekends?’, and many are reinstalling games.”

He said this was feeding into increased interest and viewership for esports, and the hope within the latter sector was that some of these new viewers will stick. “It will be interesting when live sport comes back to see if those same people do return or stay with esports,” he says.

Of the crossover between the fan groups, Tran says: “Esports is not a perfect substitute for traditional live sports, but the consumers, from a gender and psychographic point of view, are very similar.

“There is something very innate to watching people compete. There’s a winner, a loser, there are underdogs, you see people who have devoted their life and talent to their passion…” He concludes: “So sports and esports occupy the same space in entertainment culture.”

Asia ‘undervalued’

As in other parts of the world, gaming and esports engagement is booming in Southeast Asia. And the competitive esports business here has plenty of room to grow, Chew and Tran say.

“We’re at a place where it’s a little bit undervalued,” Tran says. “If you look at the reach and the passion that we have here versus some of the markets where it’s already become a bigger fixture of the marketing toolkit of brand sponsors, or broadcast platforms…I think there’s still a lot of opportunity for new partners and there’s still a lot of appetite among consumers.”

Chew says: “I think there is a lot of opportunity for growth which ties in with the demographics of Southeast Asia. Countries like Malaysia, Indonesia and Thailand are home to a young and still growing middle-income population.”

The interest in offline events is big, he adds: “In Thailand and Indonesia you get 7,000 esports fans coming to watch a tournament…” This is on a par with a major badminton event, one of the biggest sports across the two territories. But badminton tournaments will still attract more sponsors in the current market, he says.

Over the past year, big brands in the region have been catching on, with heavyweight names like Coca-Cola having a presence at the offline events.

“I think the sky is the limit for sponsorship and, as for broadcast rights, I think we will see a lot more traditional media broadcasters engaging a younger audience with esports in this region,” Chew says.

For publisher Riot Games, commercialising competitive gaming is still a relatively new activity, and it is keen to learn from traditional sports. Tran says: “We are a game developer trying to learn more about sports, and that’s why we are happy to work with guys like Mark to teach us what are the things we are doing wrong and what are the opportunities out there.”

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