HONG KONG, CHINA - Media OutReach
- 2 April 2019 - The explosion in
popularity of eSports is creating new avenues for the media and entertainment
industry to reach a wide range of demographics and generate unprecedented,
lucrative opportunities. The franchise model, which facilitates profit sharing
within the eSports ecosystem and incentivizes new investment, will propel its
development into a fully-fledged industry, according to the latest report ESports
graduates to the big leagues from Deloitte's Centre for Technology, Media &
Telecommunications.

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Citing an
earlier Deloitte Digital Media Trends Survey, the report says that half of Gen
X respondents play video games at least once a week, almost as often as
millennials and Gen Z respondents. Gen Xers lead all generation in the amount
of time they spend playing games on mobile. Although older generations might
dismiss video games, their children have grown up with them and continue to
play on consoles, smartphones and PCs.

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"The
growing popularity of eSports has spawned new opportunities for companies along
the value chain of the media and entertainment industry, whether these are related
to game development, marketing or computing hardware. The industry is poised
for explosive growth driven by rapid advances in digital technology," says
Taylor Lam, Deloitte China
Telecommunications, Media and Entertainment Sector Leader, citing Deloitte
findings that the global eSports market is expected to generate USD1.5 billion
in annual revenues, primarily from the exposure of sponsorship and advertising
to an estimated global audience of 600 million fans.

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The
report highlights the franchise model's emergence as a catalyst of concerted
efforts to transform eSports into a fully-fledged industry. Typically,
franchises help establish revenue sharing among games, events, merchandising
and players, as well as ensure minimum requirements for pay, benefits and
training facilities. They also play a pivotal role in advancing industry governance,
ensuring integrity and combating fraud, especially given the rising importance of
cybersecurity to secure data and analytics and prevent vulnerabilities and
intrusions.

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According
to the report, eSports offers a new channel for businesses to engage and evolve
with their audiences and transform to meet the changes brought about by digital
disruption. It is a new, modern way of storytelling that helps bring target
audiences into a more interactive and immersive narrative experience through
borderless online networks.�

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"However,
businesses need to understand the industry's nuances before moving into the
eSports arena and should work to understand their audiences and exhibit an
authentic interest in their dedicated games by partnering with teams, players
and leagues, as well as leading streamers and streaming networks,"
explains Nikki Wang, Head of
Sports Business China, Deloitte China.

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The
eSports landscape is evolving rapidly, becoming more inclusive, interactive and
immersive than ever. The report underscores the importance for media and
entertainment companies of building relationships with players, leagues and
spectators, exploring new merchandise opportunities with downloadable digital content,
and enhancing the viewing experience for eSports audiences. Advertisers,
meanwhile, should see how to better connect with audiences by moving away from
linear, broadcast channels to social media, streaming and eSports arenas.

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� 2019. For information, contact
Deloitte China.