Performance

Now that we know what NRG does lets ask ourselves: Does performance affect growth?

As a new organisation NRG understands that the teams they picked up or/and formed need to perform for it to matter. They learned this the hard way with their League of Legends team. For an organisation that still has to figure out a lot of internal stuff, they’re doing well.

I took most of the data below from Team Liquid’s esports wiki and gosugamers.

We know that NRG’s SMITE team is the number one in the world — but how are the other teams doing? Here are a few samples!

Rocket League

A good amount of activity for this team who seems to be doing rather well in their games.

NRG Rocket League squad placements — they’re doing rather fine!

Hearthstone — Rank #9 Worldwide

Some activity shows some mediocre results nothing too extraordinary.

NRG Hearthstone placements — doing ok!

CS:GO — Rank #33 Worldwide

NRG CS:GO results aggregation — lots of spread!

Overwatch — Rank #23 Worldwide

NRG Overwatch: Doing good!

It is obvious that as the teams get more grounded and their performance rises fans will start flocking in!

It is clear that some games have better impact on their social channels than others.

Let’s compare the victory of NRG in Smash

Compared to

and

I picked three tweets from three different teams. The time-frame is as close as possible. The tweets are the same type: They announce a victory of the teams. They all contain an image and the hashtag #NRGWIN

Now let’s analyze:

SMASH: 20 retweets, 118 faves

CSGO: 9 retweets, 54 faves

OW: 35 retweets, 142 faves

Clearly some teams have more traction than others. Personality of the players in the teams and the popularity of a game over another one are extremely important in this.

Who would have thought that NRG’s SMASH squad generates more retweets than CSGO’s squad?

Retweets are a much stronger type of interaction than a fave. A fave is a token of appreciation that symbolizes the acknowledgement of a tweet and the fact you’ve seen that tweet.

Unfortunately I do not have access to the full set of analytics that twitter gives to the publishers/account owners to see how many thousands of people have been seeing those tweets thanks to the mechanics of retweeting.

Sponsors

Running esports teams is expensive.

Paying salaries, living and housing for cyber athletes is just the tip of the iceberg any esport team has to shell out.

To make the pie sweeter there is a clever way: acquire sponsors and partners.

These companies are usually related to the world of esports and will either pay directly a sum of money to sponsor a team or player, provide them with hardware or a mixture of both.

NRG has lined up a bunch of sponsors: Each partner has a precise function and has a particular agreement with the team.

Partnering up with Twitch lets you monetize your channel

No need to explain, Twitch is an important piece of the puzzle, especially when you have multiple esports teams. In fact NRG has been actively recruiting streamers to host under their Twitch partner page as shown by the below tweet:

Hardware manufacturer: Storage, memory, headsets and peripherals

Hardware manufacturer: Too many things to list

If you analyze NRG’s twitter stream Logitech and HyperX keep popping up often— promoting brands on social media is very common in esports. Hardware manufacturers are extremely important and it goes both way: If top players and teams use a certain type of mouse/keyboard/monitor — most of the enthusiastic players will go after the same brand to buy the same hardware. The famous sheep-herd mentality: Consumers believe that buying certain brands will allow them to perform better and be recognized amongst their peers. Well as a gamer myself I also do that (although my bank account gets mad at me).

Computer manufacturer and retailer

Speedy and easy to replace computers are needed if you run a gaming house, or multiple ones. That’s what I believe is the reasoning for this partnership. Find and partner up with a gaming computer retailer that sells and ships all over the country? Check!

Performance Drink

I feel like, in the same way Monster Energy and Redbull are sponsoring big traditional athletes, BIOSTEEL and GFueld are becoming the M.E. and Redbull of esports! I don’t have more explanations for this.

Marketplace for videogame coaches

Finding new teams and players to recruit is hard, NRG isn’t shy of admitting that a lot of their talented players and workforce is directly sourced and screened through algorithms! Good innovative approach there that streamlines a lot of headhunting and manual work.

Conclusions and tl;dr

Esports — Growth vs state of market

In the best scenario possible you’ve got extremely talented individuals, with great personality, a great set of influencers that help you spread the word around your team(s) and great results to show to your audience. This makes sponsorships and partnerships fly in like flies and audience grow like there is no tomorrow.

But that never happens, so you need to play your cards right.

NRG are fresh but have poured a lot of efforts and money in doing the right thing. They will struggle in finding their perfect balance between management styles by having so many teams to keep under control, whilst growing their brand and making more partnership to increase their ROI.

Luckily NRG has a good amount of investors that know what they’re doing from a business perspective. This will definitely help them figure out their personal esport strategy. And hopefully convince them to get back into League of Legends as its one of the largest titles out there.

Overall, esport business strategy is pretty well defined as it mimics a lot of the aspects of more traditional sports — it is harder to get the collaboration of the game industry / esport titles publishers who are holding back (on all fronts) and that directly influences the market’s growth.

Esports— Low differentiation

There isn’t a magic lamp that will create more viable channels to monetize this market.

In business low differentiation means that other businesses can easily copy what you do, either because it’s easy, logical or just profitable.

For many of these organisations it’s hard to step outside of the comfort zone and do something different. NRG has capitalized on two things.

Influencer marketing

Diversification of investments

Unlike other teams that focus all their resources on one game (maybe for lack of resources? maybe because they have a different strategy?) NRG has understood that having many squads is the key for them, and this strategy is working in their favor.

Brand new organisation, stepping their feet in all the major esport titles and doing good at them.

This allows them to attracts people from different crowds (hardcore FPS player, casual stream viewers, casual players..) and thus also opens their doors to more sponsors and partnerships.

Esports — Monetization whilst growing

Monetizing is hard. As the brand grows different channels appear but they all revolve around the traditional business model that sports has set.

Just like in traditional sports most money comes from sales, sponsorships and partnerships.

Winnings from tournament become less and less important. Popularity from winning is the key.

Esports ROI will happen just like in sports. Broadcasting contracts, sponsorships, ecommerce and ticket sales.

As Twitch and Youtube affirm themselves as esport broadcasting giants, in the near feature it would be possible that attending and watching events will become for subscribers or ticket payers only, just like BlizzCon (an event with arguably very little esport content within) is streamed for $39.99.

Players themselves become brand ambassadors for larger brands once they reach peak. The pioneer of cyber athleticism, Fatal1ty, showed us how to do it and make a living out of this practice.