Esports experienced a monumental boom in 2020 as, with the pandemic restrictions limiting people’s options, sporting viewership and engagement went through the roof.
The industry has built on from this, reporting ‘uninterrupted growth’ from that point forward. However, Steven Salz, CEO of esports betting firm Rivalry, explained that as always “it is a tale of two stories” when speaking with Inisder Sport for the Canadian Gaming Business magazine this year.
This year has already emphasised the industry’s growth as Blast’s debut Rainbow Six Siege tournament in Brazil, Six Invitational 2024, became the most viewed R6 event ever, peaking at 521,349 viewers.
For Rivalry, a sports betting and media company that focuses on esports, these impressive figures are key to the firm’s founding thesis. Salz explained that titles and games’ viewership will always fluctuate, therefore it will benefit by focusing on a model that relies on the performance of the industry.
Salz said: “We were really confident that esports viewership will always go up and we were really confident that as people watch more of a competitive thing, you’re going to be interested in betting on that thing. But we didn’t want to bet on which titles are going to be popular.”
It was this logical game plan that has seen Rivalry operate on the more fortunate side of the two tales.
Despite viewing figures steadily increasing there have been some organisations and teams in the esports landscape that have struggled, which has become more common recently and has even led to the birth of the term ‘esports winter’.
Following the economic struggles of some of these organisations, which Salz said is not uncommon in the sector, a lot of teams have announced plans to downsize, a phrase that the CEO shunned.
“I think it’s a rightsizing rather than a downsizing, I feel like a downsizing implies cost cutting measures because something’s wrong and you’ve had to batten down the hatches. I think rightsizing is better, calibrating your business to the way things have always actually been,” Salz added.
Coming out of the ‘esports winter’, Salz said that Rivalry has not seen a ‘huge’ impact. This is down to competitive players self organising and fans of competitive esports not being influenced heavily by how much money players are making as long as there is content to watch, support and therefore bet on.
In fact, with the boom happening in 2020 a lot of their supporters have matured, leading to many of them having more money to bet with.
Salz said: “The way that betting benefits from the increased commercial viability, which comes from average viewers getting older with more spending power combined with viewership improving.
“It’s just natural, with more people watching with more money, the more likely they are to bet. It is just a natural relationship between watching competitive sport and betting on competitive sport.”
On the increased commercial viability in the sector, Salz noted that “we’ve always seen eSports and gaming as the ultimate top funnel to a demographic of consumer, not the be-all and end-all”, a mistake that some companies have made.
Salz said: “The mistake that all these people have made, the one that everyone’s been making for five years now is they look at esports as the end-all be-all opportunity, which has always been a mistake because esports is predominantly a marketing spend of the game publishers. It’s not it’s not the same as a sports league.”
Gaming is one of the most viewed content categories on the internet. It’s also the most frequently uploaded category on YouTube, with the longest average views, as a percentage of total hours watched on the platform and is the most frequented content on essentially every social media platform.
Salz continued: “In order to tap into that audience you can use gaming and esports as an access point to a demographic of consumer and that’s how Rivalry has always looked at it, which is why our business is very diversified.”
“Is the esports business improving over time, I don’t know, maybe not. Is it getting better as an acquisition funnel to a demographic? Yes, it is getting better,” Salz added.
So how does Rivalry get its brand in front of its target demographic? Well, Salz explained that the company has never actually thought “let’s get esports fans to play casino”, and instead has seen esports as the best way to get in front of under 30s on the internet.
However, marketing a brand in the esports space is not an easy task. Rivalry, unlike most traditional betting brands, doesn’t use affiliates, bar a small subset. Instead it uses influencers and content creators.
This is a marketing strategy that has been used by most sectors in recent years, but not always used correctly. Salz said that a lot of brands view influencers as billboards, paying creators to show a logo or try a product on screen.
Rivalry’s “secret sauce”, as Salz described it, takes the strategy to a whole new level, taking inspiration from ‘world class’ brands such as Red Bull.
“Red Bull has really successfully owned adrenaline sports, but really, it’s just sugar water with caffeine in a can, but they’ve been able to own an F1 team, because it’s an aspirational thing they’ve created and it’s in your subconscious who they are and what they represent.
“The way that we creatively enable influencers and bring value to their audience is unlike any other brand. We’re not just like a logo and a referral code.
“When partners work with us the pitch isn’t here’s a bunch of money to do four tweets. It is by the end of this partnership the average concurrent viewership on your stream will be higher.”
Looking forward, Salz believes there will be more rightsizing in the industry. He concluded: “The economic reality of the space and the business fantasy that has existed are now aligning.”
