While esports companies have had to withdraw from traditional esports, EA and others have shifted their efforts to online-only events in the near term. With the likes of pro baseball and hoops canceled, esports has an opportunity to gain some more attention as sports fans search for new ways to get their sports fixes.
The question is whether this all-digital world will become the new normal for esports, as it isn’t clear when physical events will resume.
Even without much physical esports revenue, Newzoo estimates that global esports will generate $1 billion in revenues in 2020, with China ranking as the top market.
EA has launched a “Stay Home. Play Together” campaign to draw attention to its Apex Legends, FIFA, and Madden NFL competitions. Apex Legends has tripled its average minute audience (AMA) viewership in the past month. The NFL Checkdown x Madden NFL program, where some of the top NFL players went head-to-head over two days, saw the highest AMA of any Madden NFL 20 tournaments to date.
And EA has partnered with over 30 broadcast stations around the world including ESPN, NBC Sports, Sky Sports, Telemundo, and NFL Network. Specifically for Stay and Play, Madden has appeared on Fox Sports and ESPN2, Apex Legends on Twitch and YouTube, and FIFA in more than 115 territories including ESPN, Telemundo, Sky, and TSN.
Also, more people are playing and forming grassroots esports leagues. EA said it wants to push esports into the mainstream by becoming the gateway to competitive gaming and esports fandom. EA and/or licensed EA partners operate an estimated 100 tournaments across its franchises annually and it is seeing an uptick in people playing and forming grassroots esports leagues.
For the FIFA Stay and Play Cup, EA saw U.S. viewership of 3.8 million on ESPN (includes 12 total airings on ESPN/ESPN2 across five broadcast days).
I spoke with Todd Sitrin, the senior vice president and general manager of the competitive gaming division at EA, about the shift to all-digital events.
Here’s an edited transcript of our interview.
GamesBeat: I wanted to catch up on what EA’s been doing on the esports side, going digital.
Todd Sitrin: Obviously there’s been a lot of change in the world, with mandated shelter-in-place around the world. Initially a lot of the industry, including EA, just took the approach of postponing some things, cancelling some things, but holding on to the construct that we had wanted to execute on. We made a decision here about a month ago to pivot to a completely different plan, based on the fact that we were getting quite a lot of intelligence from our organization on what the world was likely to look like in terms of people traveling, people not coming together in groups. We pivoted to a model which is fully online.
The first thing we had to do, which was a huge challenge–we made a policy decision that we would not execute any events, broadcasting events, unless 100 percent of everyone involved — the competitors, the on-air talent, and the broadcast production team — was at home, separated from everyone else, in order to execute. That required technology that had never been assembled in, to our knowledge, anywhere in the broadcast industry. Not just esports, but the broadcast industry. The stuff that you’re seeing broadcast today, to our knowledge, still requires people to go into a broadcast studio and provide that type of support. We felt that was not in keeping with EA’s commitment to having people stay at home.
In order to do that, we had to create what we believe is the first fully cloud-based broadcast platform and workflow. It allows 100 percent of all people involved in a competition broadcast to do it from home. That took us several weeks to create. We started in early March. We did our first broadcast using that technology on March 24 with an Apex Legends online broadcast. We’ve continued to improve that, and we now have a very robust technology solution that lives up to that policy of having everyone be 100 percent remote. We’re very proud of that. That’s allowed us to create plans that take into consideration fully online competition.
GamesBeat: What else is happening?
Sitrin: The other thing that’s come about, obviously, is that in the world right now, it’s a very unusual circumstance. You have your population, the public, sitting at home with a lot more hours of time than they normally would have. You have a lot of broadcast partners and platforms and networks that no longer have as much content as they did. Hollywood is shut down. There’s no production in New York or London or anywhere around the world for traditional entertainment. In terms of sports entertainment, there’s no live competition. Turn on ESPN or Fox Sports and you find decades-old rebroadcasts of contests, many of them in standard definition. That’s all they have to put out there. The third thing that’s happening is that people who are famous for things other than playing video games all of a sudden have a lot more time on their hands, because they’re not producing out of Hollywood or playing their traditional sports.
We’ve assembled a set of competitions that are allowing us to get to a mainstream audience that has become available as a result of the current situation. That takes the form of three levels of competitions for us. At the highest, most open part of the funnel in what we’re doing, it’s about fun competitions that leverage people who have fame outside of esports. Whether that be professional footballers, professional athletes of any type, or celebrities out of Hollywood, we can introduce esports to a much broader audience by leveraging those known personalities.
Over the last month and a half now we’ve executed a ton of these fun celebrity-driven executions. We did one a little over a week, maybe two weeks ago now, one of our largest, was the FIFA 20 Stay and Play Cup, which involved 20 footballers from 20 of the most prestigious clubs in Europe playing over five days. That was broadcast into more than 100 countries via television, as well as of course on global digital platforms. We saw a tremendous amount of engagement and audience from that opening-up type of action.
GamesBeat: What’s unique here?
Sitrin: What’s unique about what EA is doing, and I’ve talked about this in the past, we’ve always been focused on making esports more accessible. What’s happening now in the current time, obviously we can get distribution to a broader audience. But what makes it unique is the accessibility of our esports. Whether it’s FIFA or Madden or FIFA Online in Asia, these are esports that draw a strong connection to real-world sports. It makes it easy for viewers who have very little contact with esports previous to now–it gives them the ability to understand what’s going on. They understand the sports they follow, American football or European football. They understand the virtual players. They have an emotional connection.
That’s why, for the Stay and Play Cup, we aligned with the most popular football clubs in Europe. We’re able to draw on that tribal nature. I’m a fan of Chelsea and Chelsea’s not playing right now, but I go to their site and I’m on their mailing list and I’m on their social channels. I can root for Chelsea. I’m just rooting for Chelsea in a different way. That was a big entryway in making it more accessible for people to come in.
We know, though, that we have to continue to move people down to the authentic esports competitions that involve just the very best players in the world, who have fame, but their fame comes from playing video games. We’re very intentional about trying to expose that broad audience–now, how do we expose them to the next layer down? The way we do that, we start to combine celebrity with authenticity. You may have seen the execution with the MLS, the EMLS that’s going on right now. It’s a five-week competition. We’re taking a celebrity pro athlete from an MLS team, say the L.A. Galaxy, and they’re playing on a team with the L.A. Galaxy esports professional. The two of them are playing together against another team in the MLS that’s similarly set up. We’re taking some of that authenticity from the best esports players and marrying that together with the broad reach that a famous footballer can bring.
GamesBeat: How do you help distinguish between the temporary games, because of the pandemic, versus things that might be more permanent in this digital shift? Also, how do you plan for the more permanent side of things?
Sitrin: A couple of things there. You make an assumption there that I’m not fully in agreement with, which is that there’s something that’s temporary and something that’s firm. I believe that the world of esports has been changed. While it won’t be exactly what it is now at some point in the future, many things will stay the same.
Let me answer your first question and then I’ll give you some more detail on that. We’re very clear about when, if I think about those three layers–there’s the fun celebrity, there’s the combo of celebrity and authentic, and then there’s the authentic. Part of it is branding and how we talk about it. We’re very clear about all those three layers. The reality is that what people want is to be entertained. There are many ways to be entertained. It’s true in many different shows and sporting events. Sometimes it’s just the best players in the world playing. Other times it’s more of a celebrity combo. Sometimes it’s purely a celebrity level. We’re clear and transparent about what it is we’re doing with that.
What we’re trying to do, though, is expose the people at those most broad, accessible types of experiences–we’re trying to show them that there’s entertainment at all these different levels. That’s why, when you bring in people to expose the authentic esports side, you can bring them in through some of that celebrity stuff. We’ll do that the opposite way as well. For instance, we had the FIFA Stay and Play Cup that I was referencing. During the last day we had Ian Wright, who’s one of the most famous footballers in European history, an incredible personality. He was part of the broadcast team. At the same time we also had Msdossary, who’s one of the greatest esports FIFA players ever, a world champion, and he was part of the broadcast team. Even though it was a very fun execution with these 20 footballers from all these teams across Europe, we did a lot of content in there that was part of the authentic esports experience. We’re trying to say to people, “There’s something more than just watching your footballers play.”
Part of it is how we schedule the year. We want to be able to give the people at the top of the experience, the top of the funnel–we want them to have opportunities to go deeper down into that immediately. One thing we’re working on right now is scheduling. We just did, the Sunday before last, five hours of programming on ESPN2 with Madden. In a five-hour period we took people down that path. The first hour was a celebrity competition, the Madden Celebrity Tournament. That was very broad and had a lot of famous people, famous outside of esports. It was the very first thing we did in the program.
GamesBeat: How do you make this engaging?
Sitrin: The next thing we did is we had some content, not a competition, but really storylines around people, the Road to Madden Bowl. We aired two episodes, half an hour each. Those were episodes that had been created previously, although we hadn’t aired them yet. It was about, “Hey, if you don’t know a lot about esports, let us get you into the personalities of who’s playing and what they’re playing for.” This is very similar to an approach that, say, NBC would take with the Olympics. How do you get people who have no interest in rhythmic gymnastics or curling to care about and want to watch that? Well, you tell the backstory. You tell the stories of the sport. It’s around storylines.
We told that for an hour, and then we did an additional three hours of the Madden last chance qualifier, one of our authentic esports competitions. That was very programmatically planned out so that we could take people, bring them in through the celebrity, then walk them down that experience to understanding the people of esports, and then immediately delivering an authentic esports experience. That’s what we’re going to try to continue to do. Obviously, with a partner like ESPN, they were supportive. They were willing to give us five hours of TV broadcast time.
To answer the second part of your first question, as far as whether this is permanent or not, here’s why I don’t think things will necessarily just go back to what they were pre-COVID. First of all, we at EA have developed technology that I was telling you about, the fully cloud-based broadcast. We never would have done that or invested in that were it not for the current situation. But now we have it. So what does that mean?
In the past, if we had wanted celebrities to participate in what we were doing, we would say, “Hey, please fly to this location. We’ll need you for half a day or a full day. Then you’re going to be part of something.” Most celebrities would say, “I don’t have the time to do that, and you’re going to have to pay me a lot of money because I have other stuff going.” Now we’ve shrunk that barrier to getting involvement down to something as simple as, “We’re going to have a competition for who’s the top dog out of all the NFL, and all you have to do is play for a half hour once a week from your home. You don’t have to do anything else. Do you want to be a part of that?” The number of people that are going to say yes is very high. We’ve lowered the barrier as far as what’s required for them to participate.
When we get to some new normal, I don’t think it’s going to be going back to what it was. We’ve now broken through from a technology point of view. And the second thing is, there’s a lot of broadcasters who, up until the coronavirus, had waded into the pool of esports. Some of them were up to their waist. A lot of them had just put a toe in the water. What has happened as a result of the virus is they have waded further into the pool. They’re liking what they see. They’re liking the fact that this is programming that’s doing quite well and exceeding their expectations.
While they might walk a little bit back out of the water when they have the NBA and NFL to show again, I don’t think they’ll walk all the way back to where they were in February of this year. They’ll be deeper in the water than where they were before. That means more availability of people that are famous from esports to use in the broadcasting ecosystem and more distribution that’s opened up and will continue to be there as a result of what’s happened over the last month, and what will likely occur here for quite some time. That’s my view on the question of temporary and permanent. I think more things will be added to the permanent column than existed at the very beginning.
GamesBeat: I was looking at the Newzoo estimates as well, how it’s broken down estimates for physical and digital revenue. They did take down the estimate for esports this year in revenues. It’s a bit lower now. In some ways, it didn’t seem low enough to me, because–just looking at the way the revenues are coming in for esports now, the physical seemed like it was dominant. Ticket sales, merchandise sales at events, meet-and-greets, those sorts of things were generating a lot of revenue. Newzoo didn’t drop that to zero, but I do wonder how esports is going to be able to compensate for that as it goes all digital. Is there a way to increase digital revenue in the absence of that physical revenue?
Sitrin: I can’t speak for Newzoo. They can explain their methodology. As you know, anything that’s a forecast has to make some set of assumptions. I don’t know what their assumptions are. What I can say is that EA has not built an esports business based on live event revenue streams, ticket sales, in-person types of experiences. Many companies have built more of their revenue streams on that, so I think it makes sense that there would be a shrinking overall revenue in the industry. There’s no doubt that sponsors, who have money, will probably be more conservative about how they spend. I’m sure that also had some effect on Newzoo’s thinking.
But as it relates to what I can speak to more definitively, which is EA, we are not seeing a shrinking of our sponsorships as of now. Our viewership numbers are higher than they were before, and we’ve built our business based on viewership as opposed to in-person. We never chased, “Hey, let’s get 15,000 people in a big auditorium.” Instead, we were chasing great competitions with viewership. Our goal has been about increasing the broadcast hours.
I just came out of a meeting this morning where, as a result of us pivoting–the cost of running a live event is quite a lot higher than the cost of creating an online competition. In making the switch to address the fact that we can’t do live events today, we were able to take the money we were getting a certain number of hours out of, broadcast hours, and now we’ll get a ton more broadcast hours. As long as the viewership stays at the levels it’s been at, which is higher than what it was before, we actually have greater revenue potential at EA than we had previously.
Now, maybe viewership hours won’t stay the same. Maybe there will be more competition as Hollywood starts ramping back up and the sports leagues start ramping back up. But at least for EA, our strategy of focusing on broadcast from the beginning has insulated us a bit from that reduction in esports revenue from non-broadcast revenue streams.
GamesBeat: If everyone in digital has this challenge — how do you generate a ticket sale from a digital event? I don’t know if you’re able to get toward that, whether it’s a pay-per-view kind of thing or something else.
Sitrin: I think you’ll see a lot of people experimenting with different models. Right now we’re more focused on growing our audience size and monetizing through media rights, monetizing through sponsorship, monetizing through license fees. We’re not pursuing a model where we’re trying to directly charge those who are watching for the experience. Others may try that. I can’t speak to what others may do.
Right now, we’re looking at an increase in our viewership, like I said. If you look at, say, a Madden event prior to the coronavirus and an authentic Madden event now, we’re seeing almost a two-time jump in viewership. When you look at an event–this is the biggest spread we’ve seen so far. There was a La Liga event in late March. A normal La Liga event, compared to this one, a celebrity-driven La Liga event, it was like a five-time increase in viewership. Some of them aren’t as high as that. Sometimes it’s more like a 50 percent increase. But that’s still a huge amount.
We’re still trying to figure out the ingredients that are bringing people in to see the product, the broadcast product. But it’s some combination of ties to the real-world sport — that certainly helps — and the accessibility of our games themselves. We’re trying to push our broadcasts to be more entertainment-driven than to be what I’d call traditional sports broadcast delivery. Again, what the world needs right now is greater entertainment value. That’s why you’re seeing things like Ian Wright joining us, bringing more fun to the experience and less sports announcers sitting behind desks doing play-by-play in the traditional sense.
It’s an evolution to make our content more accessible on top of games that are more accessible to an audience that’s broader. That’s definitely changing our viewership and in a very positive way.
GamesBeat: Are you increasing the number of digital events as we speak now? Are you doing more frequent updates for some of these event-related features in the games?
Sitrin: As far as the number and frequency of events, absolutely. Between the middle of March through August 1, that sort of time frame, we’re executing — either ourselves or in partnership with third parties — something close to 100 different esports competitions. That’s an order of magnitude more than what was planned in that time frame. It’s a huge increase in the number of executions and the number of broadcast hours. That’s changed dramatically.
As I was mentioning, we’re looking at recasting the entire rest of our year, knowing to the best of our ability where live events can play and where online can play and so on. For the remainder of the year, that increase in magnitude — what it was going to be versus what it is now — is probably going to be about an order of magnitude, a 10-times type of increase.
As for the games themselves, it’s not really requiring changes in the games. The games were already built, the games we’ve been working with — Apex Legends, Madden, FIFA, FIFA Online — those games were already supporting what we’re doing. Right now we don’t need much additional development. We’re letting the teams focus on delivering their schedules as they’ve planned.
GamesBeat: Is there anything else you wanted to add today?
Sitrin: The model is pretty simple on my end. We have those three levels of competition: very celebrity driven for fun, a mixture of celebrity-driven and authentic, and then authentic esports with no celebrity. We only had a plan for that last one, as far as our plans for the year. We’ve now changed that by addressing all three areas. We’re trying to do what I mentioned for the Madden broadcast a few weeks ago in terms of sequencing, so you can have a viewer journey that takes you from the top of that experience all the way down.
As a result of trading off live events that were less frequent, we now can have online events that are much more frequent. Because of the opening up of our distribution and viewers, people who had never come to esports or given it a look, now they have an opportunity. Broadcasters are putting it in front of them. For the core esports fan as well, we have something for everyone. As a result of that greater distribution, more interest from the viewership, and the type of product we’re producing, an order of magnitude than we did before, the viewership numbers are through the roof. Given that we built our business completely around viewership and broadcast hours, as opposed to ticket sales and live events, we can really deliver on the original goal, what’s always been the goal of the CGD, which is to take esports mainstream. This has accelerated that effort considerably.
The other thing I’d comment on is that despite all the business-related things that are going on, EA has always had a vision of uniting the world through play. We believe that we’re doing something that’s very good for the world right now. The world is locked away in their homes. It can be pretty challenging. A lot of people are out of work. A lot of people, if they are at work, are balancing their families and work at home. What people want in times like this is entertainment, escapism. We can provide that.
A lot of the motivation here is about living up to what EA has always tried to do, which is to unite the world through games, unite the world through play. We’re doing it through viewership and creating those moments where communities can come together and participate and have fun. We’re all working from home just like everyone else. We understand how much we rely on entertainment to take us away from the realities of the world. A big driving force for us has been–we can produce content. Hollywood can’t do it. The sports leagues can’t do it. But we can. Let’s use this as an opportunity to give back and do something that the world needs.
That’s become a rallying cry within EA, and certainly within my teams. It’s what gets us up every morning in spite of all the trouble there is for all of us. It feels like a good thing for us to do.