ARTICLE BY DREW HOLT-KENTWELL
Drew Holt-Kentwell has been involved in esports for more than eleven years and is a former competitive player, team general manager, and event organizer from the UK. After leaving Razer in October 2015 where he was the head of global esports, Drew started Catalyst Esports Solutions, a global esports marketing and talent agency which is headquartered in Singapore. Drew is also the Co-Founder and Owner of esports event production and consultancy "Spawn Point", and professional South East Asian esports team, "Chaos Theory".
Esports is a complex industry to navigate. Charting the opportunities and growth areas isn’t easy. Surprisingly, advertisers, investors, and pro teams are increasingly looking towards South East Asia (SEA) for the growth of esports. Why is this under-the-radar market gaining traction in esports?
Last year Newzoo’s research said that SEA was the industry’s fastest growing region, now with 9.5M esports enthusiasts with 2.8M residing in Vietnam and 2.0M in Indonesia. This number is set to double by 2019. These are countries that have large populations, over 50% penetration of internet users, and over 40% penetration of active social media users. Internet and social media users are two key groups that are synonymous with the esports audience. These are also countries at the start of their upward curve as access to hardware and the rollout of greater quality internet increases leading to the affordability of both. By comparison, Malaysia, which is a little further down the road as far as esports infrastructure goes (and with a population of 30M) has a penetration of 71% for both internet users and active social media users according to a report by ASEAN UP.
As penetration in these two groups grows rapidly, so too will the esports audience: a young, highly active and engaged millennial audience who are hungry for hardware and content. Advertisers now see this as a chance to drastically grow market share as advertising to the esports audience is cheaper than traditional sports industries such as soccer or motorsports.
Beneath the surface, SEA is a complex patchwork quilt of languages, cultures, and audiences, with vastly varying habits depending on which games they follow and play. Each game is a small ecosystem of its own, and tapping into these successfully takes expert advice and a comprehensive strategy.
For esports to truly thrive in South East Asia, a few important things need to and continue to happen:
The basic infrastructure must continue to develop via investment in the value chain. Events must exist to create content, competition and inspire the next generation of professionals. Teams must professionalize and set the bar higher in order to provide those events with greater content. Investors and advertisers must smartly spend in the industry to fuel the growth of the sector - and it’s not all that expensive in South East Asia.
There is also the not-so-small matter of cultural acceptance of competitive gaming. There are steps we can take to alter this mentality with the older generations: careful education through articles, case studies, and campaigns that benefit the local ecosystem as a whole. The effort must also be made to involve and guide parents through the industry, what it consists of, and why and how their children are involved. But on the whole, the shift will be an organic one as those who grew up with esports become the decision makers.
Collaboration is key moving forward. There is a natural tendency to build walls in an industry developing this quickly. people trying to take on more than they can handle, seeing competition where maybe there can be collaboration. In an industry where true professional experience is lacking, a synergy between individuals and companies is key.
As the esports industry takes its cue from other industries (such as mainstream sports) and investment continues to pour in, there is a growing feeling of stability and optimism, which will no doubt fuel the next five years and beyond.
What should you expect to see in the next formative years of esports in South East Asia?
- Greater access to high-quality internet and hardware: As these commodities become more affordable, the esports audience will grow and possibly shift from LAN centers in developing countries to home-based competitive gaming.
- Larger endemic investments: As the industry grows and stabilizes, it provides more fertile opportunities for investment, allowing companies who target gamers to double down and see long-term gains.
- Rollout of SEA wide leagues and tournaments (plus the governing bodies to maintain them): It is inevitable Asia-wide leagues will emerge. Collaboration and investment will light the fire. Some are already in the works, with esports now being included as a medal event at the 2022 Asian Games.
- Professionalization and regulation of the industry: While elements of this do exist in South East Asia, Singapore, in particular, has spearheaded this, the rest of Asia needs to follow suit and start building infrastructure.
- Scores of “periphery companies” looking to capitalize: Agencies, web and graphics, marketing, pro teams, event organizers, financial advisors, social media, and more will look to expand into esports.
- A big focus on data and software: The beauty of esports is that all game and content data is tracked. Being able to manipulate those numbers to identify trends in the market and capitalize on new growth areas will be critical for new investors.