“The e-sports cold season has come.” This is a phrase often heard in the industry lately. In the post-COVID-19 era, global e-sports suffered a decline in overall viewership as public interest shifted to outdoor activities. As the economy slows down, investment destinations are also tied up. As a result, news of the sale of large game teams, especially in North America, was heard.
In response, Gen.G held a small meeting on the 18th at the Gen.G office building in Seonjeongneung, Seoul to hear the opinions of the industry on the ‘e-sports cold weather’. The officials who attended this day were Gen.G CEO Arnold Huh, Shin Ji-seop, Riot Games Valorant e-Sports Asia Pacific Manager, and Park Won-young, Riot Games Korea Commercial Partnership Manager. They shared their professional opinions from the perspectives of game teams, league operators, and IP company business planners, respectively, on ways to revive the submerged industry.
▲’E-Sports cold weather’, part of the cycle… Regarding the
‘e-Sports cold weather’, the officials strongly expressed their will to break through on their own rather than enduring the storm. The common opinion presented by them is ‘cycle’. A growing market can go through a period of decline at any time, but as the saying goes, ‘the ground hardens after rain’, it is expected that a team that survives with a solid strategy will rebound after midnight. Shin Ji-seop, general manager, said, “In the cold season, the industry is likely to focus on more intrinsic values. In the end, the business models of the surviving teams will be solidly built,” he said. “It will be an opportunity to be recognized as an industry and focus on the essence.”
Park Won-young, general manager, said, “There have been several financial crises in the past. When the economy goes down, the nature of the league is revealed. The LCK is a league that has survived even in bad situations,” he said. This is likely to have a positive effect in the future.”
CEO Arnold Huh said, “The diversification of funds from investors in the past is now concentrating only on the ‘top league’. Investors will flock to games that do well and businesses with high viewership,” he emphasized. CEO Arnold Hur also explained Gen.G’s breakthrough strategy in detail. Gen.G’s attention is currently focused on ‘brand strengthening’. CEO Arnold Huh said, “In the past, the only result of sponsorship was a uniform patch.” “Now, we are thinking about how to promote innovation. First of all, we are paying attention to strengthening ‘brand value’.” 카지노
▲Business model, reaching the limits of B2B… Need to increase the proportion of B2C
In the past, the main business of the game team’s profit model was B2B for investors. Officials emphasized that esports now needs to share a lot of communication with gamers in the B2C sector beyond B2B. This is due to low on-site ticket sales and low viewership compared to popularity. CEO Arnold Huh said, “I don’t know of any gaming league that has made a significant profit from ticket sales in the past six years. Considering the production cost, it is expected to be in the red. In terms of current viewership, esports has been struggling for the past five years, and we need to get out of the structure of being hit when sponsorship sales drop.”
CEO Arnold Huh cited the expansion of ‘brand contents’ as the strengthening of B2C for game teams. Content leads to sales of digital products (assets). If users experience the brand of the game team in-game, it naturally leads to strengthening profitability. CEO Arnold Huh said, “Until recently, production companies were reluctant to share profits. Now, I think the league without profit sharing will degenerate,” he said. “A variety of innovations are needed when watching games. The same goes for the arena. It would be nice if LoL Park had a menu named after the players. ‘Chobi Pizza’ can also be an alternative,” he explained.
Shin Ji-seop, general manager, added that B2C sales need to be increased from two perspectives: watching and playing. For digital items, “whether they sell a lot” is not a priority. In order for publishers and game teams to distribute revenue, it is possible to have a premium (sales volume) higher than that. General Manager Shin Ji-seop said, “The depth of the fandom and the brand value of the team and players are increasing considerably. I think we can increase sales even if we distribute half of the profits. We are doing a lot of research to expand the experience internally,” he said.
Park Won-young, general manager, believes that the recent CGV viewing will play a big role in increasing ticket sales in addition to B2C. Director Park Won-young said, “The annual capacity of Roll Park is 80,000 seats, which is far less than that of traditional sports.” After going through the regular season and the finals, we received good feedback from many users. If you create a ticket capacity of 3,000 to 5,000 seats, including Roll Park and CGV, you can make money from on-site viewing. It is expected to play a big role in satisfying the experience of fans outside of Seoul, where LoL Park is located.”