We sat down with the founder and director of BIG Esports Chris Smith whose company works with a lot of traditional brands, investors, sporting codes and companies to help them understand and pick apart esports, find ways to become involved in the industry and build a strategy.
Describe in just a little detail what happens when a company wants your advice or assistance?
Chris Smith: “Often, companies will come to us to look at getting involved in esports, not understanding the nature of the market, and a lot of the time it turns out they really want to engage Gen-Z and millennials and they want to do that through the medium of video games. Not necessarily hardcore esports.”
Do you find that, we could even be talking about rights holders and brands, they come to you with a decent understanding of esports and its wider industry benefits or do they see it as a transactional reason for getting involved?
CS: “A lot of the time they see the buzzword, and it’s interesting, it’s a long-standing buzzword like blockchain. Esports did have a renaissance period pre-Global Financial Crisis, it was quite large and then there was a big dip in the market and it’s building back up. A lot of people understand they need to be involved, they see other organisations, say in Australia Essendon and Tennis Australia getting involved, and they would like to know more as well. They come in with the preconceived ideas, sometimes correct sometimes wrong, and we help them understand behind the scenes of what exactly happens and what’s the best way for them to get involved. There’s so much more than just working with, owning or sponsoring a team there’s so much more just as there is in traditional sports.”
One of the issues I’ve noticed regarding esports in Australia has been appropriate pricing of the value of sponsorships, team ownership and team value, do you think there is an issue in getting the correct value out of the industry in Australia at the moment?
CS: “One hundred per cent. If you look at the Forbes article The Most Valuable Esports Companies in the World and it only specifically covers teams, not any other companies in the space. Check the valuation numbers there they’re quite large, the largest valued team in the world at that time was Cloud9 who are operating off under a nine-figure budget of revenue quite often. They’re doing anywhere from seven to 16 times valuation at this stage.
“There are some issues around that in the market, there are some issues around people understanding their worth and pricing. A lot of the time it’s people who come from a similar history, like myself, being a semi-professional player and being involved in the grassroots space and they haven’t got the business experience before. A lot of the time they don’t know how to explain the value that they’re bringing to someone.”
How will you grow your own business and in turn grow the local esports industry?
CS: “Over the past 12 months and for the next 12 it will be on the education aspects to it, helping people to understand and get a buy-in to the scene. We find if someone pays us as a consultant or not, if we can teach them about the industry, they will invest and they will bring others.
“A global example of this is automotive brands so Mercedes has come into this space globally and since then we’ve had Audi, Mercedes, BMW, Toyota, Nissan and there’s another Japanese automaker who is about to make a big play. It’s often a catalyst where one company brings others so it requires just that first person to pull the trigger and the rest will come in. FMCG is another one, we saw Dr Pepper come into the space and now in Australia we’ve seen Dare, Ice Break and Pringles and others come in too.
“For us we’re focussing on that and we’re also focussing on helping sporting codes and organisations sustainably invest into the space. Most of them are interested, like I said before, only in teams and we are helping them to understand the benefits and power of not having to go all in running an esports only thing but how you. can use gaming to supplement what you’re already doing, say a halftime show, integration into festivals, the Australian Open where they’re doing concerts. The problem we help solve is how can you do gaming to reach a new audience and maintain relevance with the audience you already have.”