The age of Digital has ushered in the world of esports, which has been trying to grab on to major sporting events, seeking recognition, demanding a seat at the table for some time. Now the good news for esports fans and promoters is that things are finally looking up. India has finally recognised esports as a part of multi-sports events. It will be taken care of by the Department of Sports under the Ministry of Youth Affairs and Sports. Another win for the worldwide Esports community is the recently concluded Olympic Esports Series 2023 that saw 130 players taking part from 64 countries.
Indian esports industry is expected to reach $140 million by 2027 according to a report by Lumikai, a gaming and interactive media fund, and Amazon Web Services (AWS). The recent unban of Krafton’s multiplayer battle royal game Battlegrounds Mobile India (BGMI) by the Government of India was also a positive sign for the growth of esports industry. While the popularity of esports is undeniable here, India is no match for China and other parts of the Asia-Pacific region. According to a report by research firm Niko Partners, the Asia and MENA regions make up more than 56% of the global esports market, which is estimated to be worth a whopping $1.3 billion.
China dominates this market, accounting for 34.2% of the esports market share and generating an impressive $445 million in esports revenue. In comparison, India has only generated $22.3 million in esports revenue. IMPACT evaluates why brands in India are shying away from advertising on Indian esports, despite an increase in content consumption, and what ails the growth of this market in the country.
Vinit Karnik, Head – Sports, Esports and Entertainment, GroupM South Asia says, “With constantly evolving geo-political situation, from an esports rights holder and brand marketer POV, there’s always the government’s guillotine hanging above the head making it difficult for anyone to commit long-term.” Karnik believes that the Indian gaming publisher community is yet to crack the code when it comes to creating a local multiplayer mobile esports title. He says, “Another reason would be that gaming, esports, and streaming are all associated with a lot of profanities and irresponsible behaviour, which is a big no-no from a brand safety POV. An esports players’ association, which is decided upon unanimously, and can be accountable for talent behaviour can go a long way in plugging the gap between advertisers and the esports community.”
With a different viewpoint regarding the slow growth of esports in India, Lokesh Suji, Director, Esports Federation of India & Vice President of the Asian Esports Federation (AESF) says, “Compared to the esports market in Europe and America, the Indian esports industry is still in the developing phase. Apart from esports being perceived as gambling in India, another big factor that prevents legacy brands in the country from getting associated is their lack of understanding. Since these brands are new to the world of esports, it will take time for them to dwell and understand how it functions.”
Suji believes that after the government’s official recognition, the sector will be governed by regulations that will provide additional credibility and legitimacy about the industry for brands wanting to invest in it. “It will take a while for brands to realise the lucrative prospect of sponsoring organizations and tournaments and its benefits,” he says.
Rohit Jagasia, Founder and CEO of Revenant E-sports believes that this official recognition from the government will play a crucial role in revenue growth through funding, spreading awareness and building legitimacy for the sector, attracting more audience and stakeholders to get involved or invest in it. He says, “Titles such as Valorant, DOTA 2, New State, Pokemon UNITE, CS:GO, will collectively be the principal gaming titles of the Indian esports landscape, with the majority of the high-profile and big-money LAN tournaments in 2023 being centred around them, which brands can leverage.”
Fighting toxicity
The Indian gaming and esports industry has faced multiple setbacks in terms of regulatory fluctuations and lack of recognition in the country. But the major issue that keeps brands away from the industry is the lack of responsible gaming behaviour. Toxic mindset, harassment of female gamers, and use of profanities while gaming and live streaming are hindering its growth. While consumption of performance-enhancing drugs, cheating, and hacking in esports tournaments are being closely monitored by organisers and international esport bodies, the toxicity continues to be an overarching problem here.
The threat of toxicity is such that Riot Games Mumbai server for Valorant has received the moniker, ‘Toxic Server’ in the Indian gaming community. When asked about the measures taken by Riot Games to curb toxicity in Esports, Ashish Gupta, Marketing lead, India & South Asia, Riot Games says, “We have a zero-tolerance policy for toxicity in all our games. We take this very seriously and have systems that identify and deter behaviour such as insults, threats, harassment, or offensive language. For example, in VALORANT, we have a list of zero tolerance words that we automatically block for in-game chat. We recognise that players find creative ways to bypass our filters, so we launched the ‘Muted Words List,’ so that players can manually filter out words they do not want to see in chat.”
Riot Games recently joined hands with Ubisoft in its mission to make online video game spaces safer. “We launched the Zero Harm in Comms research project, which aims to create a shared database of anonymised data, used to train Ubisoft and Riot’s systems to detect and mitigate disruptive behaviour,” he says.
Several top esports athletes and content creators continue to indulge in toxic behaviour, and regularly use profanities, even when logos of multiple endemic and non-endemic brands appear on their live streams. When asked if brands distance themselves from investing in esports due to such behaviour, Animesh Agarwal, Founder & CEO, 8Bit Creatives says, “Harassment is just another form of toxicity, which is declining as our creators are more focussed on the success and loyalty they are getting from the audience. We believe in a safe and supportive esports competition where female gamers don’t have to worry about being uncomfortable.”
Global Esports, one of the oldest esports organisations in India, launched a campaign, #SayNoToToxocity. Dr. Rushindra Sinha, CEO and Founder of Global Esports, says, “It was important for us to use our voice for educating new audience who are experiencing gaming for the first time. It is normal for teams or players to engage in banter in most forms of sports, be it cricket or football or F1, but we saw how a lot of toxicity was being branded as banter. A huge part of this community today understands when banter bleeds into toxicity.”
Sinha adds “More so in the mobile gaming industry where the average age of the audience is way lower. We have seen crucial stakeholders instigating, trolling and abusing competing teams and leveraging their social clout. Some even instigate their fans to falsely report social media profiles of budding talents, or even leaking their contact details and consequently subjecting them to abuse. More stakeholders need to realise that whether or not they like it, they will have to be on their best behaviour, on and off the game.”
Jai Shah, Co-Founder of Orangutan Gaming says, “Harassment and rude comments against female gamers and esports players are prevalent in the industry. This can negatively impact the growth of esports and discourage brands from sponsoring events and organizations. Increasing the visibility of female gamers and esports players can help in breaking stereotypes and promoting a more inclusive industry.”
Firasat Durrani, Co-Founder & VP Operations, Loco, says, “Loco’s streamers and viewers have the necessary tools to keep out any toxic elements, and ensure a positive and creative atmosphere. For instance, chat moderation on Loco, enables streamers to bar toxic and hate speech, and protect users from non-conducive content. Loco’s machine learning algorithms have a comprehensive understanding of chat sentiment and block offensive and abusive words being used on live chat. Additionally, our experts constantly moderate live streams 24X7 to ensure a safe environment for millions of Loco viewers.”
Surprisingly, even the fun loving GTA V role playing servers have become toxic grounds for not just players, but also viewers on the live streaming platforms. On curbing toxicity in the server, Milroy Antao, Managing Director, NoPixel India says, “We are very strict in our policies regarding NoPixel India, players are not allowed to bad mouth other players on any social media platforms. Here in NoPixel we ensure that everything stays in the server, no OOC (Out Of Character) feelings should be portrayed inside the server. We have various measures to tackle toxicity. Players can face up to class D ban, i.e., 30 days ban with 30 warning points, or their queue priority points are deducted and they wait in the queue longer, reflecting on their actions.”
What is hindering esports’ ad revenue?
Endemic brands such as IQOO, OnePlus, Acer, Asus, Lenovo, Intel, AMD, and RedBull among others, heavily invest in gaming and esports IPs in India. In the recent past, we have seen multiple non-endemic brands such as KFC, Gillette, Hyundai, Swiggy, PUMA, Bharti Airtel, and even Louis Vuitton, among others, entering the esports scene in India. Experts acknowledge that the increase in ad revenue in esports is growing at a slow pace.
Preetham Venkky, President, 22feet Tribal WW & Chief Digital Officer, DDB Mudra Group says, “Scale and target are the two factors hindering ad revenue towards esports. Premium ad revenue is usually derived from native advertising. In gaming, this tends to be the most expensive inventory, which would explain why investments are meagre at this point.”
He further says,”5G and live rendering technology will play a significant role in making native advertising more affordable and better targeted. Until such time I don’t see non-endemic brands in India invest heavily except for buying standard CPM and CPC based banners for standard reach.”
Elaborating on the slow growth of AdEx in the esports category, Abbhishek Chadha, SVP – North & East, Interactive Avenues (A Reprise Network Company) says, “Gaming audiences do not take to advertising as easily as other genres, so gaming integrations need to be seamless and non-intrusive. This requires a deeper creative integration that might not be as direct and straightforward as some brands might like. Additionally, tracking the success of campaigns is tough, and audience measurement and demographics need to be more transparent.”
According to Rohan Chincholi, Managing Partner, Digital, Havas Media India, non-endemic brands allocate around 5-7% on gaming & esports, while endemic brands allocate 2x-3x more than non-endemic brands depending on the degree of association with any marquee IPs. Chincholi says, “From a bird’s eye view - lack of clarity around legal, policy considerations, the lack of recognition by government earlier, and connectivity has hindered the growth of AdEx in esports. From an advertiser’s lens, the hindrances are lack of scale, clarity of deliverables, and possible outcomes to investments.”
Manika Juneja, Managing Partner, Dentsu Creative, has a completely different point-of-view here. She believes that the biggest hindrance could be cyber-security. However, she is also of the opinion that despite this lingering threat, India will witness an upside in the YOY growth in the ad revenue numbers, considering it has officially been introduced as a part of the multi-sports event category by the government.
She adds, “Moreover, the category itself has evolved as a new form of entertainment in the country, which will benefit 2023, and result in this year becoming a milestone year for esports in India. Frankly, brands won’t be able to ignore esports and gaming if they want to engage with the right mix of active and passionate audiences.”
Growing esports
Elaborating on plans to grow the esports in India, Ashish Gupta, Marketing Lead India & South Asia, Riot Games says, “We recently announced our new VALORANT Champions Tour (VCT) 2023, which includes long-term partnered teams that will compete in our International League.
We have an Indian representative, Global esports, which will stand shoulder-to-shoulder with some of the other best VALORANT teams in the world.”
Today multiple E-sports teams in India are innovating to increase their reach via content creation to attract brand sponsorships for revenue sustainability. Manoj Kasyap, owner of Velocity Gaming says, “We have a wide offering for all brands. Our E-sports team promotes pro-level equipment related to gaming, esports, etc. We have a team of content creators that offers brands multiple options to promote their products on YouTube and other streaming platforms. Also, in the recent past, we have witnessed a rise in streaming platforms that are competing against YouTube in India. We generate revenue via streaming deals on LOCO as well.”
The image of esports is improving says Shiva Nandy, Founder and CEO of Skyesports adding “I would argue that the negative aspects of esports culture, such as toxicity and amateurism, have decreased in recent years. This is because of the increasing professionalism of esports organizations, many of which have received backing from prominent venture capitalists or investors.”
Brands play the wait and watch game
American business magnate,Warren Buffet had once rightly said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
Brands in India are cautiously taking steps to deliver the right brand messaging. With an ever-growing fast paced Digital space, brands can often lose credibility and face embarrassment with the slightest mistake.
When asked why brands are shying away from investing in esports’ IPs, Mohit Israney, Managing Director and Co-founder of Global Esports says, “India has the world’s largest youth population with a strong affinity for gaming. One in three gamers worldwide will be from India in the next 5 years. It’s an ever increasing fan base, and potentially home to the next billion gamers. From an AdEx perspective, it’s a category in the making. Brands jumping in today not only have it mighty cheap, but also the advantage of a solid headstart.”
He further states, “Think of it in terms of brands understanding the potential of social media in 2008. The ones that did, have a different trajectory on their digital journey, against those who got in late. There’s a lot of learning from the international industry on both success stories and failed business models or partnerships. I wouldn’t say brands are shying away from investment, it’s just that they currently see gaming as one category, and evaluate its ROI based on their social media reach.”
Ankit Panth, Esports athlete and RedBull ambassador says, “I feel brands are still waiting for people to get mature in India. It is not only about the harassment faced by female esports players, but players in general. Brands care about their reputation just like any of us do. Every now and then there are fights in the community, resulting in controversies, and team switches. So brands get a little scared, and they don’t associate directly with the gamers.”
According to Panth, the unpredictability of the esports community has forced brands to reach out to gamers through agencies if absolutely necessary. This is specifically true for certain targeted campaigns which would run for 1-3 months, and then they go silent. According to Panth, “Brands don’t want to associate directly as they see a lack of professionalism along with credibility and trust issues.”
Girish Hingorani, Head - Marketing & E-commerce, Cooling & Purification, Bluestar, says, “A brand would always want to be very careful and stay away from controversies. We have seen certain sports being very gender-biased, painting certain genders in a negative way, which is clearly not acceptable as far as a brand goes.”
When asked if Polycab would invest in esports, Nilesh Malani, CMO, Polycab, says, “Esports is still at a nascent stage, but of course, when it grabs more attention of marketers and organisations in the service sector, it will have a huge scope to grow. As things evolve, issues such as toxicity will be taken care of, and there would be some guidelines and framework. Once those hygiene factors are in place or a framework or policy is well established, brands would definitely look forward to esports.”
Punit Dharamsi, VP and Head of Brand Marketing, AMFI, believes that until and unless checks and balances are in place, brands wouldn’t invest in esports. He says, “People are looking to invest in esports because that is where the younger audience is. Anybody who is wanting to target the youth today has to reach out to them on multiple platforms, and esports is one of those platforms. So, as long as it is not gambling, we are also looking at esports as a category where we can go in, reach out to the youth and give our message.”
When asked if toxic behaviour of gamers in India is keeping brands away from investing in Esports Samir Sethi, VP and Head of Brand Marketing, Policybazaar.com, says, “I don’t think it is entirely fair to label an entire genre of sports or an entire sport itself as toxic. There may be some cases, but I think on a case-to-case basis, whatever property and whatever tournament seems like a brand-safe environment to be in, we would evaluate it on its merit basis to invest in advertising.”
Ajay Khanna, CMO, Amway India is expecting esports to evolve tremendously before investing in the platforms, he says, “We would be wary of anything which is kind of toxic because we know we are built around health and wellness. We are built around optimism and values. I think there is enough that can happen between now and the future if esports evolves into a positive platform. I am sure we will be able to partner, but have to wait and watch on the sidelines because there are enough opportunities in sports right now. So, I would not be in a hurry to go and grab that.”
