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Wouter Sleijffers | The journey to profitability in esports

Wouter Sleijffers, chief executive for leading British competitive gaming culture brand Excel Esports, explains how the journey to profitability doesn’t end at power brands and why esports needs to move beyond lifestyle and towards purpose to strengthen the industry.

Wouter Sleijffers

Gone are the days when winning a major gaming tournament would give you nothing more than a place on a leaderboard, a mention on the internet, and if you were lucky, a few thousand dollars. While some still doubt the state of professionalism in our sector, I dare to say that it has surpassed some other entertainment industries.

Of course, the esports industry is still in early adulthood. But while our ecosystem is developing at light-speed, it won’t be until we’ve developed our ecosystem in full that we can reach maturity. We will know when we have reached that moment; it will be when we call esports what it truly is – competitive gaming.

Many still believe esports is the wild west run by opportunists and wishful thinkers. They miss the point that competitive gaming gives us the best of both worlds: the legacies, fandom and drama of professional competition and the dynamics, culture and lifestyles we see in music.

We must realise this is all gaming, not electronic sports. After many years in the business and thinking about the answer to ‘what’s next for esports’, I have formulated my view in what I call ‘The five Ps of esports’ (or rather, ‘competitive gaming’).

Passion

The first P is for Passion. Passion is the birth of many industries and it’s no different for competitive gaming. This came in the mid-eighties, when the first recorded and televised LAN competitions were held. In my own experience, the stories of the still-present ‘founders of esports’ speak of true passion. Passion is what keeps us going, whether we are from the Boom or Zoom generations.

Professionalism

But things got more serious and we slowly turned into the age of Professionalism. The very bold sponsors in those days were desperately looking for ‘professional’ parties, league organisers for professional teams, and teams for professional players. This came in the mid-90s, when the term ‘esports’ was first coined and the foundations were laid for ESL, PGL, MLG and DreamHack.

Then, in 2011, came the monumental launch of Twitch (or Justin.TV as it started). Twitch revolutionised competitive gaming as much as Netflix did for TV. Always on, live streams, all games, and direct access to our heroes. And here’s where fans turned into viewers (currently 15 million daily users) and viewers into eyeballs. And eyeballs, as we know, are important to marketers.

Power brands

Then came a stage where we saw gaming teams or ‘clans’ evolve into ‘esports organisations that saw themselves as ‘brands’. It’s important to understand the emergence of Power Brands in esports.

They are hugely influential, award-winning organisations that have remained strong amid the flux of games, talent, sponsors, and fans. They are supported by capital resources at high valuations that can be justified because of their (rare) elevated status, driven by loyalty, lifestyle, and success. They are innovators who can say ‘no’ to things they don’t like and come up with new and better ideas and solutions.

This is what makes organisations great partners for sponsor brands. As much as they operate as competitive teams, talent platforms and gaming brands, they’ve equally grown out to be ‘full-service agencies’ with creative capabilities, content studios and physical and digital distribution channels not seen in other entertainment industries. The possibilities are endless, and a growing army of mainstream brands have understood the opportunities available.

But there needs to be greater clarity in terms of team brand identities. We see different brand strategies for different esports teams. Some, for example, choose a different team brand for every game they compete in. This is sometimes forced upon them but is sometimes by choice.

Others are confined to one game or one league. Personally, I don’t think that team brands can survive such a limited position. Their future is in the hands of a league and game that may well not last. If some traditional sports are struggling, we should certainly not assume that applying a sports model will help grow our ecosystem.

Some team brands not only struggle with identity – making them indistinct – but they also lack personalities. This is partially due to the young nature of the industry. It’s also down to a lack of vision from the teams that try to emulate the existing Power Brands in esports or from the wider sports world.

Finally, in esports the words ‘lifestyle’, ‘entertainment’, ‘street wear’ and ‘media company’ are used without much thinking, amplified by a never-ending competition on who can be ‘cooler.’ We bring in influencers and celebrities, often from other industries, to move further up the ‘Power Brand’ ladder. But this isn’t the key to long-term success.

Purpose

Whilst this is all part of our culture, and the lines between sports, pop and gaming culture are blurring anyway, real identity is created by a further purpose beyond passion. This is why we at Excel Esports underwent our own brand update, transitioning from a team born out of passion for gaming, into a brand that puts Purpose, my fourth P, at the heart of what it does.

It will see us forge our own unique path – away from all the lifestyle esports brands – and use our platform to have a positive impact on the wider gaming and esports community. Moreover, it’s only recently that we realised we should not copy blindly from sports. The prime example is right in front of our noses: we don’t go to Twitch to watch football, and we don’t go to ESPN to watch gaming. The models are not the same. To put it simply, we’re a fast-evolving universe that includes top competition, culture and passion.

Profit

I have no doubt esports will reach a point that it will attract all sponsor categories and budgets. Whether that is due to necessity because of Covid-19, or digital savviness and entrepreneurship, esports properties will continue to build out direct-to-fan models and more service-oriented solutions will help build our ecosystem to matureness. And with matureness comes Profit, the fifth P.

We will have reached that stage when we’re finally proud enough to say that we participate in ‘competitive gaming’ rather than ‘esports’ – and power brands will play a big part in that journey.

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