UM Innovation Annual ⑥｜Video Streaming Elevates Esports to Mainstream

The acceleration of technology over the past year has caused a massive ripple effect, permanently shifting consumer lifestyles, expectations, and behaviors to a future-ready state. In response UM APAC created the Asia-Pacific Innovation Annual – taking a deep dive into the cutting-edge advancements in entertainment, commerce, digital health, and connectivity, that are catapulting the region and proving new opportunities for brands.

Written by: Nami Sojiema, SVP, Strategy, UM

JapanTakashi Yoshioka, Senior Supervisor, UM Japan

Esports has emerged as one of the strongest drivers of growth in the gaming industry. Nowhere is this more evident than APAC, where the esports market accounts for more than 54% of the nearly $1 billion global esports market, according to a report by Niko Partners. China leads the charge as the biggest country globally in estimated revenues and audience size.

South Korea too is a global leader in the space, with many of the world’s best players, host to some of the biggest tournaments, and the first country to recognize professional gamers as athletes.While Japan’s esports market may not be as mature, it is the fastest growing in the region and the one to watch. This past year, Japan saw a surge in esports as the COVID-19 lockdown led to growth in the number of gamers. Games such as Apex Legends, Fortnite, and Valorant are increasingly popular in Japan and are now being played across various platforms, including smartphones, PCs, and gaming consoles.

Growth in esports has been accelerated due to the popularity of live-streaming platforms where consumers can view players competing in online games. The live gaming culture in Japan started with streaming platforms like NicoNico and has now shifted to global platforms like Twitch and YouTube. There are also local online video delivery platforms such as OPENREC.tv’s CyberZ, Mildom’s DouYu Japan, and Mirrativ, which all cater to different communities.Live streaming of online games has also been especially popular in China and Korea, with Kadance reporting that 78% of Chinese viewers and 58% of South Korean viewers have watched a gaming tournament or competition that was streamed live. Popular game streaming platforms in China include Douyu, Huya.com, and YY.com, whilst YouTube and Twitch are some of the favorites for South Koreans, in addition to local streaming platforms such as AfreecaTV and Gom.

Prominent YouTubers in Japan, such as Hikakin and Hajime Shacho, deliver in-game commentary and are big contributors to the the live game streaming culture. Musicians and actors are joining the fray, with Satoru Iguchi of King Gnu, Ryohei Yamada of Johnny’s entertainment, actresses such as Tsubasa Honda and Natsuna, and musician Hikaru Utada, all declaring their love for video games.In recent years, there has also been an increase in active streamers joining professional gaming teams. These players not only excel as gamers but also as influencers. StylishNoob (622,000 followers on Twitch) and FPS Shaka (598,000 followers on Twitch) are well-known Japanese video streamers in the esports industry.

With 260 million Chinese consumers tuning in to watch esports content in 2020, the biggest vertical for live streaming video, it is of no surprise that esports teams, players, and influencers have been enjoying strong followings in China, generating profit for both live streamers and broadcasting platforms through a “virtual gift” revenue model. Technode reported that more than 85% of the revenue for game streaming platforms Douyu and Huya are from these virtual gifts, which take the form of miniature icons that flutter on the screen whenever viewers choose to tip the live streaming host.The elevated status of esports in China and Korea have led to sponsorship of teams and events by major local companies and international brands. Leading brands in Japan are slowly entering the gaming market. For example, Nissin Cup Noodles became the sponsor of Zeta Division, a professional gaming team, and SHARP became the main sponsor for RAGE Party 2021, one of the largest esports events in Japan.Also, in 2020, Toyota and Subaru collaborated with Sony to implement a live streaming event on YouTube called “e-Nürburgring Race.” In the first race, Toyota’s CEO Akio Toyota, also known as Morizo, appeared as a guest and navigated the Nürburgring course with a professional driver. Brands can look to the other two North Asian markets for further inspiration on how to show up in esports in interesting and engaging ways. In China, Pizza Hut partnered with King Of Glory to reach the gaming community by creating a female avatar called Little Magic Cook. The campaign was a huge success, and Little Magic Cook became the Avatar of the Year in 2020.

In South Korea, Nike is actively investing in esports, not just as a sponsor, but also providing sports research facilities and athletic training programs, helping professional esports players develop their athletic capabilities. This approach of active support is not only appreciated by the professional gamers, but also the gaming community that supports them.

It is anticipated that the online gaming market will continue to grow not only in the North Asian markets, but the rest of APAC as well. To tap into this growing gaming market and connect with the vibrant gaming community, brands can proactively integrate into the platform in seamless and authentic ways while keeping three principles in mind.

First, marketers need to understand the unique characteristics of the different gaming communities. Brands need to do due diligence and investigate what kind of brand experience and messages will resonate with each community, which will differ depending on the game.

Second, marketers should explore the right way to integrate brands into gaming contexts. Rather than simply delivering an ad, they must offer value that only the brand can bring to the gaming community, as part of the game element or an event.

Lastly, brands can leverage influencers and live streaming platforms to amplify branded content and create greater impact and scale. Only by understanding the popular platforms for gaming content and audience preferences in each local market can marketers fully realize the potential of gaming as a marketing channel.