Why Luxury Brands Are ‘Putting on a Game Face’ – WWD

Earlier this month, LoL Esports released the viewership data from its annual League of Legends World Championship Final, a live event held in October at Shanghai’s SAIC Motor Pudong Arena. LoL Esports said the final rounds were broadcast in 16 languages and across 21 platforms. The spectacle opened with a presentation by Mastercard that showcased an augmented reality concert by international pop girl group K/DA as well as Louis Vuitton’s LED-enhanced custom trophy case. Inside the case was the Summoner’s Cup. And the trophy ceremony was presented — for the first time — by Mercedes-Benz.

The final matches were between the Suning team from China’s LPL and Damwon Gaming team from Korea’s LCK league. Damwon won three matches to one.

By the numbers, the finals match had an average minute audience, or AMA, of 23.04 million and peak concurrent viewers, or PCU, of 45.95 million. “There were one-plus billion hours of competition watched [live] over the course of the tournament,” noted LoL Esports. “This viewership sets a new record for [for the event] and is an indicator of esports’ increasing appeal.”

And while esports have been around for decades, the event spotlighted professional gaming’s growth in the West — thanks to companies such as Riot Games. Eduard Montserrat, chief executive officer of Stream Hatchet, said that with the record-breaking “Finals AMA of 23.04 million, Riot’s leadership within the Western esports market this year continues to boost the growth of esports’ footprint. This year, for example, esports watch time on Western streaming platforms increased by 10 percent, with leagues and tournaments organized by the Riot Esports team accounting for one-third of the watch time.”

This growth in viewership and participation in gaming and esports events is the key driver behind why luxury brands such as Louis Vuitton teaming up with gaming publishers such as Riot Games. Two weeks ago, WWD held a webinar, titled, “Luxury Brands are Putting on a Game Face,” to explore the implications of this trend and what it means for fashion apparel, retail and luxury. The session featured Naz Aletaha, head of global esports partnerships at Riot Games, and Obi Anyanwu, men’s wear reporter at WWD, and was moderated by Alexandra Pastore, business reporter at WWD.

Alexandra Pastore: Esports sponsorships are predicted at $584 million for 2020, accounting for 61 percent of the total global gaming revenue. The global gaming industry was valued at $150 billion in 2019 with the expectation of rating $180 billion in 2021. Additionally, Goldman Sacks is estimating that by 2022, the global audience for esports will reach 276 million.

Naz Aletaha: Just to set the stage, Riot Games is the developer and publisher of video games, most notably League of Legends, which we launched back in 2009. That game has, over the last 11 years, grown consistently and become the most played PC game in the world.

Since then, League of Legends has been incorporated into comic books, fashion, music, other games, and into animatics and different types of content. So it’s an incredibly exciting time for the company.

A.P.: It’s so engaging. So, who really are the consumers that are getting involved? You spoke briefly about the fashion aspect. Can you kind of tell us more about that overlap into the luxury consumer as we’re seeing it?

N.A.: What you’re seeing is brands recognizing the importance of gaming; and the fact that gaming has started to seep into the mainstream, for lack of a better word, from a cultural standpoint. I think you’ve seen brands, whether they’re luxury brands or otherwise, be involved as an example in entertainment and in sports and in music for decades.

And the reason is that music and sports and entertainment are an important part of the culture and they want to be there with it. I think what you’ve seen with gaming over the last decade-plus is that, with technological advancements, games are now this incredible spectator sport. Gaming is now a part of the culture.

You see people devoting the same amount, if not more hours, to game experiences than they do to movies or television or music. So it completely makes a lot of sense that you see these incredible brands, these iconic brands starting to get involved in the gaming space.

A.P.: It’s growing, too, at an incredible rate, but it’s not really just a “boys club” anymore, right?

N.A.: It’s not. It’s not. The analogy I always use is everyone’s a gamer. If you aren’t already, you will become one. Being a gamer does not necessarily mean that you have to devote hours to gaming every single day and that you’re playing really core games competitively. My mother is a gamer. She plays mobile games on her phone sometimes.

Everybody can kind of participate in different aspects between all the different genres of game and the different entry points and the different experiences I think around gaming. There’s something there for everybody, so I think you are starting to see this stereotype, I’ll call it, that all gamers are teenage men or teenage boys start to be broken.

A.P.: We’ve seen that grow even just during this year and these last six- to eight- months when everyone’s been at home. I know some of our colleagues have gotten into it more too. I keep getting messages of different games people are playing, so it’s great to see.

Can you tell us more about your role in the business development of these sports?

N.A.: From a partnership standpoint, I think if you look at any sports, partnerships, sponsorships are such a big part of what the business behind the sport is. That’s been my role; to really figure out what the most effective way to bring partners into our ecosystem will be — on the business side of it in terms of what the arrangement of the partnership looks like. But on the other side too in how that partnership manifests itself to this audience.

That’s so critical because we want our partners to succeed. We look at ourselves as truly that, as partners. So my team works hand-in-hand with each of our partners to really serve almost as a consultant, as a guide, as a partner to help them land their message in the most effective way possible, to garner the most goodwill and to help them achieve their goals. Every brand has different goals, but that’s what we’re here to help them do.

Obi Anyanwu: Can we talk about the start of esports. I just want to hear more about the history of esports and the history of League of Legends as well.

N.A.: I think the misconception is that esports has only been around for the last few years. That’s actually not true. Esports, competitive video gaming, has been around for decades. I think what you have seen in the last 10 years is the increase in professionalism, I’d say, and the focus and the resource investment, and the attention that different publishers, including ourselves, and not just publishers, but different players within the gaming ecosystem have put into the notion of esports to really make it viable.

For us, servicing our fans and delighting our fans is really our reason for being as a company. It’s our mission statement. It’s what we aim to do. So seeing the interest there really spurred I think what you’ve seen us do in the last 10 years. Going into 2012 we essentially said, “OK, we’re going to bring everything in-house.”

We decided that it is no longer going to be fully operated by third parties. We’re going to bring the full vertical of the sport in-house so that we can actually go and lay the infrastructure and build a sports league, and create a global sport where pro players can compete as their profession, where they’ll be salaried, where fans will know when and where and how they can tune in to watch their favorite pros.

Today, we operate 11 regional leagues all around the world. There are over 115 professional teams that compete in League of Legends esports, and that equates to about 1,000 professional players who are playing League of Legends as their profession.

So all of these leagues feed into these major competitions, the biggest of which is our world championship.

O.A.: Can you share more about that collaboration [with Louis Vuitton] and the other corporate sponsors. Who were some of the first corporate sponsors that started to turn to esports, especially the League of Legends?

N.A.: We saw Mastercard and State Farm come on, in terms of brands that are not traditionally endemic to the gaming space. Those are really the first two that came in, in a really big way. Mastercard being our first global partner that we ever brought on. That happened in 2018, and Mastercard recognized that esports is a phenomenon. It was the same with State Farm.

Since then, you’ve seen more and more brands come in. Mercedes-Benz, Spotify, Cisco and Bose are partners that we announced in 2020, and we’re very happy to have them on board.

More than looking at it in terms of how many brands and of which type, we really look to find brands or brand partners, I should say, that share our philosophies and want to do right by our audience. Those are two of the biggest or most important boxes we look to check, which is asking if you aligned with being fan first? Do you recognize the importance of that? So many brands, all of our brand partners, absolutely do.

We also look at if they believe in our vision and are going to be along for the ride, because we really want to partner closely and over multiple years so we can give ourselves and one another the runway to do really interesting and unprecedented things together.

Louis Vuitton is such a good example of that. From our standpoint, we want to do more than just insert a logo here and just run a video ad there. I think that’s all very nice, as long as it’s reinforcing a broader campaign. I always call it advertising by adding value. I think that’s what really goes to win the hearts and minds of this audience. No one likes to be advertised at.

I think our audience when they see that a brand is making their sport, making their ecosystem better today than it was yesterday, that’s a huge win for everybody and that’s where you see the awareness, and the affinity.

For us, the partnership has to be a win, win, win. It has to be a win for the partner for us, but most importantly for our respective audiences because, again, that’s the only point of doing it. With Louis Vuitton, what started as a conversion centered around them becoming our official trophy case partner, really grew and evolved to become this very multifaceted partnership that spanned our sport, our game itself, our music, and what Louis Vuitton does best — which is an apparel line, a capsule collection that you saw launched in their stores.

A.P.: Well, I thought this was so amazing because it was just so well rounded. So you had the trophy case, which they’ve of course done for other traditional sports before. But then you also have their real inclusion, which is ready-to-wear. Then also the actual avatars were wearing Louis Vuitton as well, right?

N.A.: Exactly. What happened here I think was both sides put forth essentially what they do best, and we were able to find these really interesting paths of collaboration that way. We were able to, at least I believe, kind of level-up what we had done in similar partnerships, essentially what we’d all previously done.

Louis Vuitton has such a long history of their trophy cases, how some of the most coveted trophies in sports in all the world, the FIFA World Cup, they now partner with the NBA. So we were really excited to partner with them on this because they were able to bring the craftsmanship and expertise and just how iconic a brand that Louis Vuitton is. They’re very good at I think kind of straddling tradition and innovation. That was something that was really exciting for us.

A.P.: From your perspective, what is the opportunity for other prestige brands to become involved in these sports?

N.A.: I think the opportunities are boundless. I think what you’ve seen is this audience is very excited to see these brands that they know. When done right, I think the audience really embraces seeing these brands.

In terms of timing, it’s never been better because the audience is very open and receptive. Again, I think the devil’s in the details of execution, but that’s where having a solid partner on the other side who understands the audience and can really help brands navigate through these waters to land just the most effective campaign as possible is really key.

A.P.: Where is esports is headed?

N.A.: Esports and gaming are going to continue to become more and more part of the mainstream culture. And brands should know that esports is incredibly global. I think that’s something that’s really exciting. Esports is borderless. It’s a digital sport. We see fandom for teams in China here in North America, and vice versa.

We’re looking to continue to double down on creating these incredibly memorable entertainment moments and events. So when you think about our version of the Super Bowl, which is our World Final or our version of the World Cup, it’s going to come with all the pageantry, the ceremonies, the musical performances, the infusion of our IP, the best of the best play of course, the best of the best partners activating and engaging. It makes it, again, that can’t miss, have-to-participate-in event.

O.A.: As we head to the next generation and the next decade as well, what would that mean for sponsorships for Riot Games and for esports in general?

N.A.: The exciting part about what we see with our demographic is that we’re going to see it grow in both directions [younger and older]. We’ll see the younger audience start to engage more and more as they learn about esports, as they start playing games. We’re going to launch as an example, a mobile game, League of Legends mobile called Wild Rift. Think about when you play that game on your phone and that suddenly becomes so accessible, you now know those rules.

If you know the rules of the game, you want to watch people play that game at the most professional level. Of course, the current audience will age up. So my prediction is that that demographic just continues to grow in both directions. So from a partnership standpoint, I think that leaves so much opportunity. I think there’s an opportunity for brands to engage with a pretty wide demographic that I think is getting harder and harder to reach through more traditional forms of marketing. I think so many brands out there recognize the importance of connecting with audiences through their passion points.

O.A.: How do you see some of those next partnerships? Do you see them more like sponsorships, as in licensing deals, or perhaps like brand partnerships?

N.A.: I think the beauty of where the esports ecosystem is and where it will continue to go is that there’s a number of entry points for brands. Even today, brands can get involved depending on what their goals are and who they’re trying to reach. Brands can get involved at the global level, like what we’d talked about today. You can get involved at the regional level. For example, of 11 regional leagues, there’s a North American league, and there’s a European league. So if a brand is looking to target a specific region, there are ways to do that.

There are also very viable avenues for partnerships, too. Today you see teams with their own team sponsors. As we think of luxury, Gucci has done a partnership as an example with one of the top European teams in our league, Fanatic. They have a really interesting partnership. We’ve seen other apparel brands like Nike, like Puma come in and sponsor at the team level. Nike sponsors at the regional level. They sponsor the entire China league in the League of Legends ecosystem, so it’s a robust landscape.

Again, it depends on what the goals are for all the two various parties at the table, but generally speaking, we’ve seen all of the above and I think we will continue to.