Frank Azor cofounded Alienware more than two decades ago, and so he had the look of a grizzled veteran at the Electronic Entertainment Expo (E3), the big game trade show in Los Angeles this week. As vice president and general manager of Gaming, Alienware, and XPS at Dell, Azor’s job is to lead the company’s efforts in making PCs and other products for gamers.
Azor got into the business when PC gaming machines were a tiny industry, and now they fuel a $32.9 billion global PC game software business. Alienware has become a trusted brand among gamers, and Azor has moved the company into branding and sponsorship partnerships with a number of esports companies, such as Team Liquid and ESL. In fact, Alienware became a full partner in helping Team Liquid create its esports training facility in Santa Monica, California.
Esports is exploding now, but Azor is remembering the lessons from a decade of sponsoring esports events. One of the lessons is to take advantage of technology, and it is doing so with Alienware Academy, which uses Tobii eye-tracking technology to evaluate where you are looking when you are playing a PC shooting game. It compares how fast you shoot and where you look to the best esports players. The data comparisons can be illuminating.
We talked about this at E3. Here’s an edited transcript of our interview.
Frank Azor: We’ve been sponsoring esports teams and events for 10 years now. It’s not that it’s gone bad, but now everyone’s sponsoring esports. We spent a lot of time brainstorming with Team Liquid around how we can add more value to what we bring to them, and also what they can bring to our customers. That’s where you saw the Team Liquid Alienware training facility emerge. The goal there was, can we build a professional training facility similar to what basketball and baseball athletes have? Were you there in March when we opened it?
GamesBeat: Before. They were still building it up.
Azor: You have a kitchen, a very well-designed nutrition plan for these guys. They work out every morning at 9AM. The separation of work versus their living environment has been a huge shift in mindset for them as well, a very good work-life balance tactic for them. I’d like to take full credit, but their performance in games since we built that training facility has been the best it’s ever been. They won the Miami League of Legends championship. They’ve come in second in basically every other major championship they’ve competed in.
In our opinion, they’re one of the most mature and professional teams in the world. They were an obvious partner for us to work with. We started working with them six or seven years ago. The way they think, their creativity, where they want to take the organization, it’s very similar in maturity and vision to us in gaming and Alienware, our history and where we want to take the business as well.
From an athletics perspective, building that training facility and partnering with them in that way, the dividends that it’s paid to them, it’s been phenomenal. That’s exactly what we wanted to do. But on the gamer side, we wanted to do some things that are unique as well to add value. Putting stickers and logos and stuff on jerseys, that’s been done for a decade now. What could we do that could help gamers benefit from our partnership with Liquid?
That’s where we came up with the Alienware Academy. How do we leverage the experience and the skill set that these guys have, which is the best in the world, and help them pass some of that on to the aspiring esports athlete? We created Academy to do that. It’ll be a curriculum. It’ll be administered by Team Liquid. We’ll use Tobii as a technology tool to help add more depth to the lesson plans and everything. It’ll be free to anyone who wants to participate. We hope that will add more value than just putting a logo on a jersey.
That’s where we’re at with esports right now. We also just signed on the Detroit Renegades. That’s kind of in its infancy as a partnership and a relationship, but they’re a new and emerging team. They’re owned by a professional athlete as well. They’re closely aligned with the NBA. That’s new and exciting for us. It’s emerging. We don’t know exactly where that league is going to go, but we want to help make it successful.
We see we add more value to that than just, “Here’s a bunch of notebooks and desktops. Put our logo on the jerseys.” We’re actively exploring how we can make their athletes better, and how they can add value to our aspiring customers and existing customers. We’re trying to figure out different things to do around that. We haven’t figured it all out yet, but we’re going to. With the Renegades, because they’re a smaller team, we’re able to take a lot of lessons learned from 10 years in esports and help ramp them up a lot faster than they would have without us.
GamesBeat: What seems different in the last year, besides maybe the sponsorships getting more expensive? What else is happening in this stage of things?
Azor: It’s interesting. The sponsorships aren’t necessarily getting more expensive. What we’re finding is that esports teams—you have your new esports teams, because there’s kind of a gold rush, and they all come out and say, “We’re the latest esports team or franchise or league! We want a ton of money!” We just say, “Guys, we’re past that now.” We bring value to the relationship, genuine tangible value and experience that can help you be a better league or a better team. We can do certain things beyond just giving you our money.
The mature teams come to us and say, “Hey, keep your money. We want more of the value add that you guys provide. We want you guys to help us fit out our gaming house. We want to build a training facility like you built for Liquid. We want to use your technology to do it. We want to take some best practices you’ve implemented and bring that to our team and our athletes.”
The whole thing is changing. At first, a team would go recruit the best players it could find out there. Now the players are in such demand that they choose where they want to go. A lot of factors play into that: location, facilities, technology, management team, teammates. All these variables are factoring into where an athlete decides to go. A team has to be more attractive today than it’s ever been before.
If you’re just taking your investor money and spending it on things that aren’t adding value to your team, or you’re taking sponsorship money and you’re not investing it in things that add value to your franchise and your team, you’ll have a very challenging time competing at the level that some of these more professionally managed, longer-term organizations are competing at. They come to an organization like Alienware and Dell and say, “Maybe we need some money to sustain us as a business, but we see you add a lot more value that other companies can’t.”
A consumables company is going to struggle to add a lot of value compared to a technology company like we are. Potato chips don’t necessarily make an athlete any better at their sport. If we can work together on a partnership where you’re going to be able to game on the most reliable computers out there—you can travel with them. They’re easy to set up and deploy. We’re going to have service and support available to you in every city and every country that you visit. If something goes wrong, we can dispatch spare parts immediately. Those are much more valuable than just getting a $500,000 check.
GamesBeat: Are you happy with the audience that you draw now, the eyeballs coming in?
Azor: Traffic is important, of course, but it’s not the most important metric. We’re more interested in engagement. My team’s not measured on how much traffic they get, how many eyeballs they get. We’re more interested in, are folks engaging in active conversations with us? Do they give us feedback on what we can improve, what they love about us, what they hate about us? Are they doing the quests on Alienware Arena? Do they care about being loyalty members? Are they enjoying the experience of Alienware and Dell Gaming? Those are the more interesting things we’re looking at.
I can drive traffic just like that. Traffic is very easy. It becomes unqualified. It’s of low value. What we’d rather have is low volume, high engagement, rather than high volume and low engagement. That’s our strategy.
We came out with a study recently. We partnered with a third-party firm called ResearchScape where we went out and interviewed about 5,500 gamers across 11 countries. We wanted to create a new demographic mapping for folks — we published it publicly – around how the gamer has changed over time. There’s a lot of stigma around, oh, if you’re a video gamer, you’re a male in your teens or 20s. You live with your parents. All these stereotypes. Maybe at some point was true, but it’s changed and evolved so much.
We knew that, but we really wanted to organize the demographic and publish it publicly so that folks can understand that this is much more mature than that. This has evolved drastically than the perceptions 20 years ago. We created an infographic, as well as a three-minute YouTube video for quick consumption. We’re trying to help people understand the opportunity of gaming.
The demographic is very evenly distributed. If you look at the pie chart of the demographic of gamers, there is no predominant age group. We have almost everything evenly split from teenagers to 20s, 30s, 40s, 60s, 70s. The other thing that’s interesting is the pride people have in gaming. It used to be a bit embarrassing to say you were a gamer. I’ve been doing this a long time. That’s changed a lot now. People are proud to say they’re a gamer. They have a billion other gamers around them, surrounding them.
That was eye-opening, because I came from the old school of—you’re kind of stereotyped. It’s taboo to be a gamer in your 30s or 40s. That’s what my kid does. But nowadays it’s not like that. It’s popular. Gaming has broken through into the mainstream of the mainstream of the markets. You have extremely high-profile celebrities – we were talking about this a minute ago – playing video games against high-profile video game celebrities. That’s crossing over audiences. It’s cool to be a gamer now, to play games. Fortnite is probably the best example of a game that’s really broken through to the mainstream. Before that you had Pokemon Go, another major breakthrough. We’ve had two in just a couple of years here. That’s huge.
I’m excited about Madden coming back to the PC and showing that PC is a platform to be on. The PC is unquestionable winning as a platform right now. The NBA, when they were doing 2K, they came to us with a lot of advice around what platform they should standardize around. We sold them on the benefits of PC, and they bought in. You get higher resolution, better graphics. It’s easier to take the content and manipulate it for broadcast. Depending on who the athlete is, they can play on a PS4 gamepad or an Xbox gamepad. If they standardize on a console, all the PS4 players, if they standardize on Xbox, have to learn the Xbox controller or vice versa. On PC you can come to the game with whatever you want, and you can take it anywhere you want to go with our notebooks. That was pretty compelling. 14 out of the 17 teams in the league are sponsored by Alienware and using Alienware equipment.
GamesBeat: When you say the PC is winning, what would you point to there?
Azor: One of my favorite things, and Xbox has been a huge proponent of this—Games for Windows is now actually worth something. You can buy a game on your Xbox, play it on PC, and go back and forth. The PC is necessity in the home. It’s not just a luxury item. Everybody’s going to be developing games like Fortnite that aren’t extremely graphics-intensive, and everyone can get in on it. League of Legends is winning because it has the largest world installed base.
The numbers don’t lie. Software on the PC is larger than console is right now in terms of software revenues. If you look at all the major innovations that have come out over the last few years in terms of gaming—VR led on the PC. The whole battle royale genre led on the PC. The two biggest games that have emerged in the last two years led on the PC, PUBG and Fortnite. I don’t know the exact figure, but maybe 90 percent of esports is happening on PC. You look at those signs and PC is doing great.
Look at Nvidia’s financials. They’re not in any of the consoles except for Nintendo Switch. They’re doing amazingly well. The only console that’s doing exceptionally well? Nintendo Switch, which is the one that’s most different from a PC. You look at those factors and you have to say to yourself, PC is stronger than it’s ever been. Look at Madden coming back to the PC. It’s been over a decade. That’s a big deal. NBA chose PC over console. That’s a big deal.