How Esports Makes Money – Nate Nanzer, Commissioner of Overwatch League

hile at Leader’s week in Stamford Bridge (for more you can read our stories on the talks given by Triple H, and the team behind Venom’s marketing campaign) Vice President and Commissioner of Blizzard’s Overwatch League, Nate Nanzer, gave a talk on how Esports captures that magic triangle of audience, investors, sponsors.

Nanzer was asked about the ways in which Blizzard’s Overwatch League differentiated itself from more established Esports, such as Counter-Strike: Global Offensive or League of Legends, “It’s a franchise system similar to the NFL. We started with 12 franchises in our inaugural season, during January. One of the key differences with the Overwatch League compared to some other Esports leagues is that our teams are city based. We have teams in London, Shanghai, Seoul, Los Angeles, Boston, Philadelphia and New York. When we set out to design the Overwatch League we looked a lot at traditional sports. Overwatch was a unique opportunity in that it was our first unique intellectual property that we had built in over 17 years and we looked to traditional sports to get a lot of inspiration in terms of structures and commercialisation, monetising our matches through media rights, sponsorship, merchandise, tickets, et cetera.

2018-11-02 / Photo: Robert Paul for Blizzard Entertainment

“The vast majority of other franchises, the way they make money, is tied to the fact that they have a venue and they’re selling tickets and VIP boxes and merchandising and concessions. That hasn’t been done in Esports before. Esports has been these clubs fighting over this pool of global sponsorship dollars. But we know there’s the audience that wants to engage with this content live. Our goal with the Overwatch League – the long-term vision – is for millions of fans around the world to have a local team they could go and support.”

The audience is one of the biggest providers of revenue activation in the sports world, but to reach them you need the capital provided by investors. Nate was asked how Overwatch league went about courting them? “We spent 2017 working with law firms to develop the set of documents that we would then go to market with and talk to people like the Kraft Group. The pitch was pretty simple. We have a great game, a 27-year history at Blizzard Entertainment of making gaming franchises that have proven to be perpetual in their appeal. Starcraft, Warcraft, WOW, these games have been played by millions of people for the last 27 years, and we put together a structure that would put a lot of value together for our stakeholders and give Esports’ team owners – for the first time – a permanent right to play in the league.

2018-11-03 / Photo: Robert Paul for Blizzard Entertainment

“The real key difference between traditional sports and Esports is that we own the sport. It’s like if anyone around the world wanted to play football had to ask permission to get on the pitch? Well, we own the servers. You can’t play our sport without us. It was important that we could create that investment vehicle for owners where they could have a guaranteed right to play and then we can create value. We signed a deal with ESPN, so that our grand finals at the Barclays Centre back in New York in July was the first Esports event ever cast in Prime Time on ESPN 1. Something else that’s a part of that deal is we also have content on Disney XD.”

The third big side in the magic triangle of sports commercialisation is sponsors. Blizzard have brought along T-Mobile, HP Omen, Toyota, Intel and Sour Patch Kids for the ride. Nate was asked how Blizzard pitched to those guys? “HP and Intel are as endemic as it comes to the space. But then the others were new. The way we approached all those partnerships we didn’t just slap logos on the broadcast. If you’re a brand and you’re coming into Esports what’s most important is that you add value to the fan’s experience. We sat down with the brands and asked them, ‘What are your objectives?’ Our focus was really on creating branded content. For HP it’s about making Omen the dominant player in high-end gaming PCs, so we created a piece of content that we called ‘Game/Set’ and it’s basically our pro players walking through all of their settings in the game. Core fans love it. It’s adding value to the experience.

2018-11-03 / Photo: Robert Paul for Blizzard Entertainment

For non-endemic brands like Toyota, we came up with this idea for a show called ‘Access Granted, Brought to You by Toyota’, and it was like ‘Comedians in Cars Getting Coffee’. We had one of our casters in a Toyota go and pick up a player and just drive around and have a conversation. It was the type of content that the fans wanted to see. Fans told us, ‘We want to know more about the players. Who are they? What are the things they care about? What do they do when they’re not playing games?’ So, this was an opportunity to create content like that and it worked great for Toyota because they were able to integrate their product in a way that didn’t feel overly ham-handed. That’s our focus for the 2019 season and beyond.”

Overwatch League will return Q1 in 2019.