From June 14th to 17th this year, the Future of Sport, jointly created by Global Sports Week and Viva Technology, was successfully held. Future of Sport is a global gathering dedicated to the positive transformation of sports, bringing together many representatives outstanding in innovation, technology, and business, as well as leaders committed to promoting the positive transformation of sports.
Leading participants from various industries participated in this grand event. They focused on key topics about the development of the sports ecosystem, including esports, which is quite influential in France. As one of the most successful esports clubs in France, Team Vitality not only has outstanding results on the field, but is also a leader in esports commercialization. It can be said that this club has become an iconic symbol of the ecological vitality of French esports. As one of the official media partners of Future of Sport 2023, Yutang Sports had the honor to have an in-depth conversation with Nicolas Maurer, CEO of Team Vitality.
Creating a More Sustainable Model
The popular culture of the esports industry has driven the explosive growth of esports investment and revenue. 2018 was a year of explosive growth in esports investment. According to Deloitte, the total investment in 2018 increased from US$490 million in the previous year to US$4.5 billion, with a year-on-year growth rate of an astonishing 837%. Organizations, event operators, digital broadcasters and players within the entire esports ecosystem benefited from this.
Although the global esports industry has been able to maintain a good overall growth trend, starting from 2022, many listed esports companies, including esports clubs, have fallen into a vicious cycle of continuous losses. As the first esports club concept stock, Astralis from Denmark has decided to delist; the well-known North American esports club FaZe Clan has continued to suffer from poor performance, causing the stock price to plummet. The result of this is that the willingness to invest in esports clubs is gradually fading.
In response to such changes in the market, Maurer shared his views with Yutang Sports. Firstly, he said, like any new industry, esports must go through cycles of ups and downs. In 2017 and 2018, many investors were extremely excited about esports with the arrival of new franchises and high-order publishers. Investors were putting a lot of money in expecting quick returns. Now, investors recognize that, like many other sports, return on investment in esports requires time and patience. Consequently, some investors view esports organizations as being in a transitional phase, where the initial returns may be lower than anticipated.
“Our job within the industry is to take a step back and really look at the fundamentals of esports, which are vital in terms of people watching and interacting with esports properties and spending money in-game and within esports, which all indicate that we are going in the right direction. It's just a matter of perception.”
Secondly, Maurer said, “Even if the fundamentals are solid, they do not necessarily determine investor appetite to put money into our businesses and how we access funding. We now live in a world where it's just more difficult to access capital. It takes more time to convince people of all of that. Our role within the industry as leaders and CEOs of esports organizations is to transition to a model without relying too much on external funding and build a more sustainable model.”
Communicating Long-Term Business Value
The growth of the esports market is inseparable from brands’ recognition of its business value. To some extent, investing in esports has become the first choice for many companies to reach young audiences and establish a youthful brand image. From the perspective of commercial sponsorship, Team Vitality’s performance is also phenomenal. Blockchain company Tezos, Danish sports brand hummel, esports headset brand JBL Quantum, and well-known car brand Kia are all on the club's list of partners.
It is also worth mentioning that the COVID-19 pandemic has also promoted the commercialization of esports. More brands that have been active in traditional sports for a long time have begun to notice the value of esports. Maurer said that the industry saw unprecedented increases in figures during the pandemic, and the challenge was that everyone in the industry may have expected it to stay that way. He said, “We are back to the figures we saw before COVID, so there is still an increase in growth. If we take another step back and look at the bigger picture, it is still growing. It is just that COVID skewed projections. Maybe that set investors' expectations, so now we must adapt to this new environment.”
Maurer emphasized, “We must now communicate the long-term value and model to our partners, sponsors, and everyone. Ultimately, the market is still in a very healthy place. But that's our job and challenge there.”
Compared with traditional sports marketing, esports can undoubtedly bring unique marketing value to brands, especially in establishing connections with young players. More and more companies have realized this. Maurer said they were connecting to young audiences who were extremely passionate, much younger, and far more engaged than traditional sports audiences.
In addition, if we look at the demographics of people coming into the scene and watching, we can now observe the rise of new audiences, such as games like VALORANT bringing in audiences made up of younger girls. This means that esports is uniquely positioned to connect meaningfully with unique audiences that are hard to reach in other industries.
When Team Vitality was discussing a partnership with its leading partner Tezos, they were impressed by previous projects that Tezos had done. One key aspect to the partnership was developing a loyalty program and developing ways to harness Team Vitality’s connected audience and engage even more with their fans, finding ways to reward their loyalty.
Team Vitality rewards those supporting their program, which is extremely successful, having gained +73k downloads. Not only has it attracted many people who did not know the app, but it also connects with users every week by completing quests and interacting with the Team Vitality ecosystem. Team Vitality has seen a +70% increase in fan engagement on socials, leading to them becoming the #2 esports club in the world for social engagement.
Team Vitality’s partnership with Tezos has achieved a win-win result, with more and more people using Tezos’ blockchain through Team Vitality’s app. A series of social activities have also enhanced and boosted Team Vitality’s fan engagement.
Although the blockchain industry is experiencing some market ups and downs, this has not affected Team Vitality's partnership with Tezos. Maurer said bluntly, “If you do a partnership for the right reason with the right plan and approach, you can nail it perfectly nearly every time. What we’ve built with Tezos is a healthy partnership that continues delivering value by attracting new users to their platform and blockchain.”
Esports Investment Is Still Promising
In addition to sponsors, many traditional sports organizations or clubs are also consolidating and strengthening their investments in esports. As an insider, Maurer said he saw very conflicting approaches. For example, a few years back, many traditional sports stakeholders in North America invested in esports, but Maurer thought they were expecting quick returns, and were paying too much of an entry fee while entering the Activision Blizzard franchises. After that kind of experience, they most likely will take a step back, and maybe they will again come back and invest in esports. When the industry is way more stable and mature in a few years, they will understand it better than some other stakeholders.
In comparison, some European sports clubs have been slower to get into the industry but are also taking more time to understand what can bring them value. This slower approach might pay more in the long term because they will connect and invest in a sport when it makes more sense to them and is more meaningful.
Maurer also believes that in the next few years, we will see different kinds of investors coming from various sectors and traditional sports backgrounds as the industry matures. If esports keeps on going in terms of audience figures and establishing itself as part of the mainstream, it will become more valuable. It makes sense for traditional sports stakeholders to invest in joining the field of esports. In short, investments will come later once the market has restructured itself. And while it will cost investors more, organizations will have the advantage of benefitting from a more mature and sustainable industry.
Huge Potential for Data Transformation and Esports Consumer Innovation
At the Future of Sport gathering, innovations and trends in the sports industry have drawn much attention. In terms of technology applications and fan experience, the core stakeholders of esports undoubtedly have a considerable say. What is certain is that the growth trend of the esports industry will continue, and the penetration of technology and digital power will continue to deepen.
But Maurer said he had not seen a revolution in data like sports performance, which was conservative because everyone was looking digital-first and being connected to tools and data. " In the long term, we need to deploy capital to build the infrastructure for data to develop and enhance performance. We will see it in the next few years; there is a lot of room for innovation."
Twitch has been the go-to place for consuming esports for the past 10 years, and maybe it is time to see new ways of consuming esports, such as AR or VR. “I'm not sure about their direction, but that's why it's really good to be in a field where you see so many young people creating companies that have started to revolutionize how we consume esports. I'm impatient to see what's coming!” Maurer said.
In addition, Maurer is also happy to see the International Olympic Committee's attention to esports. Although it is not easy for esports to officially enter the Olympic event calendar, the attention it has attracted will bring positive influences to the industry. As Maurer said, “We don't expect it to be a game-changer for the industry, but we welcome the spotlight”.
Maurer candidly said that Team Vitality’s goal is to become more mainstream and at the forefront of the French esports industry. This is not mission impossible. On the field, Team Vitality has won the "CS:GO" Major Championships and the "Rocket League" RLCS World Championship this year. Reflecting on such spectacular achievements, Maurer said, “Our primary goals revolve around establishing dominance in our respective games through high-level performance and unwavering dedication. Additionally, we are deeply committed to investing in the development of our players, enhancing both their skills and character. This commitment, in turn, enables them to set a benchmark of sportsmanship within the industry”.
Outside the field, Team Vitality and its players entered the shortlist of Esports Awards, known as the "Esports Oscars", for nine awards, including Esports Organization of the Year, Esports Team of the Year, etc. Maurer said that this recognition underscored their ongoing commitment to excellence and innovation in esports. Maintaining a calm mind about the industry and insisting on innovation and cooperation have become the keys to Team Vitality's success.
About Team Vitality
Team Vitality is France’s first esports club, out to conquer the world.
Team Vitality was born in 2013 from the passion of friends sharing the wildest dreams. Based in the heart of Paris, the club is currently one of the most influential and successful esports clubs in Europe, with the ambition to expand its impact worldwide.
Team Vitality competes on the biggest esports licenses: Counter-Strike, League of Legends, Rocket League, Valorant, FIFA, and the teams have won over 100 national and international championships. Beyond performance, the club is striving to train future generations and reveal all of their talent.
About Future of Sport
Future of Sport, a Global Sports Week and VivaTechnology collaboration, is the gathering of the sport and tech ecosystem. Leaders in innovation, technology and business come together to meet stakeholders committed to the positive transformation of sport.
About Global Sports Week
Global Sports Week Paris is a platform for global sports organizations, promoting innovative and sustainable sport in response to the expectations of new generations.
Created in 2020 under the high patronage of Mr Emmanuel Macron, President of the French Republic, and under the patronage of UNESCO, Global Sports Week brings together political and societal leaders with change agents from sport, business, culture and media. After 3 first editions, having connected more than 2000 participants from 70 countries and 20 000 online visitors, Global Sports Week returns for its 4th edition Future of Sport, in collaboration with VivaTech from June 14 to 17 2023.
For more information www.gsw.world and @globalsportsweek
VivaTech accelerates innovation by connecting startups, tech leaders, major corporations and investors responding to our world’s biggest challenges. This is where business meets innovation. Vivatech organizes Europe’s biggest technology and startup event each year, over four exciting days in Paris. We unite the most disruptive topics in tech, rule-breaking entrepreneurs, and the world’s largest technology breakthroughs, building an ecosystem where business gets done. VivaTech is a global community including thousands of visionary startups, investors, organizations, corporations, researchers, media, and talent. The seventh edition of VivaTech took place 14-17 June 2023. More information available at https://vivatechnology.com/media and @VivaTech.
About Yutang Sports
As one of the official media partners of Future of Sport, Yutang Sports is a Chinese leading sports marketing and media platform, with an ultimate mission to connect China and world through sports. After years of growing, Yutang Sports, with a comprehensive media and marketing promotion system, is now dedicating to reporting sports business and marketing trends, providing sports business news, analysis, and exclusive data reports in both Chinese and English. Having been cooperated with top-level domestic and international sports summits, Yutang Sports is opening a window for Chinese sports industry to embrace the world.