To understand the sector’s potential, as well as its challenges, we caught up with Nicole LaPointe Jameson, CEO of Evil Geniuses, one of North America’s first esports organizations. A Forbes 30 under 30 recipient, Jameson came to esports from an unconventional background of distressed-asset turnaround in Private Equity. But she is now helping define the modern era of competitive gaming.
Impact of Covid on esports
While the sector faces an “education gap” on how brands and investors can best enter the space, for Jameson, the Covid outbreak helped define two factors.
The first was the core product's stickiness. “Unlike sports teams and live events, we were easily able to keep continuity of our core competitions because we’re already digital and global.” But at the same time, she found they weren’t totally immune. “Many of the main revenue drivers of our space – sponsors, advertisers and event companies – were hit.” And as brands halted marketing spend, “the revenue stickiness in certain spaces was frothy.”
Future revenue streams
As we’ve seen across multiple industry sectors, the pandemic has provided a great acceleration of both positive and negative trends. So what could esport’s revenue sources look like going forward?
“We do believe in the potential of the sports model of direct sponsorship, league payment and the accumulation of fandom,” says Jameson. However, given the franchise costs of some titles they compete in run into millions, “the magnitude is not enough to support the current costs of most esports teams. Sponsorships and brands are still in their infancy.”
So her focus since joining has been bringing in analogous revenue streams “that don’t deprecate from the core product.” While other esports organizations focus more on entertainment, merchandise and apparel, at EG Jameson has “leaned into the Genius side.” On the collegiate side they offer programing, curriculum and consulting, and on the data technology side they white-label some of their analytics insight.
The new investor landscape
The pandemic raised awareness of esports, and the sector has recently attracted sports superstar investors such as Kevin Durant and Odell Beckham Jr. However, Jameson says there are still hurdles.
“I won’t shy away that the broad [social and gender] perception of esports hasn’t been positive. But now people are starting to get on the trend of how Gen Alpha engages with the world through digital platforms, gaming and content creation. This platform is one of the best ways to engage with them and it’s global,” says Jameson.
What she finds most interesting is that as the industry becomes more fully fledged, they’re not only seeing investors from music, entertainment and sports backgrounds, but also from Ed Tech, Diversity and Inclusion and social justice programs. They’re also seeing many jump ship from linear media distribution (such as radio and TV) to where the youngest consumers are. Notes Jameson: “the average ESPN viewer is over 50. If you’re a marketer, you’re thinking brand affinities are built with the under 30s. That’s our sweet spot.”
Impact of mobile on esports
Mobile has had a massive impact on global gaming, but will it do the same for esports?
Jameson highlights that while, say, Candy Crush might access a huge and broad demographic, the hardcore esports games aren’t typically accessible on mobile. “It’s different how you curate a broadcast experience and activate fans on a small screen. Brands are aware of the audience volume and are pushing for ways to engage fans in a competitive scene, and we’re looking for what types of format and competitive structures exist that would hit our sweet spot.”
Managing talent in an esports organization
Managing the different constituents of an esports organization can be tough says Jameson.
“We have our talent – our player athletes – who tend to be a different demographic and incentive to our staff who make the engine run. We have to operate a very on-trend marketing business and a more corporate sponsorship and activation arm. Bridging that culturally and operationally wasn’t easy,” says Jameson. Fortunately, and in common with tech, she finds people are grounded by their passion for the space.
It can also be a challenge from a cost perspective. As in traditional sports, up to 80% of cost goes on player salaries and ops. As CEO, she has to balance the need to be player-first, yet also to build a functional organization to support growth. Yet Jameson has managed to oversee growth from a staff of ten to today’s 120 and is soon to open in the EU.
Changing the culture of gaming
One of Jameson’s driving goals has been to open gaming to all. “Gaming should be ubiquitous because, unlike traditional sport, we’re don’t have barriers of size, gender or accessibility.”
Evil Geniuses decided to tackle that challenge in how they entered a new title, Valorant. “Instead of the traditional approach of a coach reaching out to players they know, we took an empirical data science approach,” says Jameson. Using their own matrix of what factors drove the best results, they came up with a mixed-gender roster – the first ever to compete at that level. “This is not a marketing play or to check the diversity box. We built this team based on empirical data decision-making,” she reveals.
The results have been excellent. According to Jameson, “it’s shifted perception in the space. It caused the league to rethink how they stratify the leagues between men and women.” And ultimately it works because “we’re not just talking about it; we’ve put our money where our mouth is.”
