E-sports has the potential to attract younger sports fans, especially men, but that coveted audience can also be easy to alienate.
That was the big message at the inaugural E-Sports Activate conference on Tuesday, March 6 in New York City, where company executives and industry experts discussed the growth opportunities for e-sports.
The gaming and e-sports research firm Newzoo predicts that the global e-sports economy will grow 38% year-over-year to $905.6 million in 2018. According to a report from Nielsen, seven out of ten e-sports fans are male, with the average age being 26 years old.
"E-sports really is just like traditional sports, you have teams and games and you have brands," Ryan Musselman, the president of OpTic Gaming, said in an interview with TheStreet. "[Sports companies] are saying, 'Hey, our audience is not getting younger... here's this young audience that could translate over really well.'"
The emergence of live streaming video platforms such as Action Alerts Plus holding Amazon's (AMZN - Get Report) Twitch democratized the watching of the game, said Todd Harris, co-founder COO of High Rez Studios, a video game developer. And now franchises such as Action Alerts Plus holding Activision Blizzard, Inc.'s (ATVI - Get Report) Overwatch League, consisting of city-based teams playing the online video game Overwatch against each other, should propel growth even further, according to Harris.
Activision's stock declined 1.6% to $73.92 on Tuesday. Year to date, shares have risen 16%.
"The rise of e-sports is real, and still in its early innings," said Jeff Marks, senior portfolio analyst for Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio, which owns Activision. "Activision Blizzard's Overwatch League continues to exceed expectations in terms of popularity and engagement, and I expect it will grow as the company develops more ways to reach its audience."
However, Musselman said companies "need to understand the audience before making any moves because if you lose that rapport with the audience, you will not be able to build a strong brand that people want to latch onto."
In a presentation,Marco Mereu, founder and CEO of esports digital media company Estarz, said that the e-sports fans are jaded about traditional advertising and often use ad-blocking software, making traditional advertising less effective.
"The e-sports audience is super engaged and [high]-spending, but they have a nose for B.S.," said Harris, noting that they will support "with all of their heart and wallets" if the ads feel authentic.
Mereu said that collaborations with YouTube influencers or investing in branded content are more suited to e-sports fans, especially since e-sports was aided in its early years by YouTube content and influencers.
The conference also held a Women in E-Sports and Video Games panel, during which women involved in e-sports discussed the struggle for female recognition in e-sports.
Emily Sun, gamer and co-founder of the all-female Super Smash Bros. tournament series Smash Sisters, said that e-sports needs to recognize women as a part of its audience. Sun said that female gamers are marginalized by other players and companies in various ways, from being unable to find fitted women's league jerseys to suffering online harassment and abuse.
"When you start seeing more women...that normalizes it," she said. "It's no longer weird to be the only girl in the room [because] you're not the only girl in the room."