eSports can become the second largest sport in India in 3-5 years: Loco's Ashwin Suresh

The founder of the eSports streaming platform discusses experiment with premiumisation as the industry seeks a roadmap for sustained growth.

The year 2023 saw eSports, which many simply know as gaming tournaments, gain significant prominence in India. It might also be inferred that eSports prominence catapulted it to become a household phenomenon during the year as its target audience group, which traditionally is the young demographic, became more aware of it.

This statement can be backed by the findings of a Fortune Business Insights report, titled Global eSports Market Forecast, 2023-2030, which found that the global eSports market, valued at USD 1.45 billion in 2022, is anticipated to witness substantial growth. Projections indicate a CAGR of 21.5%, aiming to reach USD 6.75 billion by 2030. 

Streaming platforms, pivotal stakeholders in the growing industry, are one of the key benefactors of this growth spurt. eSports streaming platform Loco reportedly has 60 million registered users. This audience base consumes 20 million monthly hours of game-streaming content on its platform, averaging an hour of daily live-stream consumption. 

In conversation with afaqs!, Ashwin Suresh, founder, Loco, remarks that while 2023 was a remarkable year for the whole ecosystem, the buzz around eSports will continue to persist and the industry will share this sentiment for the coming eight to ten years, at least. 

He comments that user adoption is expanding rapidly as gaming is no longer a niche; it's a mainstream activity. Whether indulging in simple games like Wordle or Candy Crush, or diving into more hardcore gaming, from PC to mobile gaming, everyone is engaging in some form of gaming activity. "The years ahead look incredibly promising for eSports."

"What cricket is for Indian sports culture, BGMI is for Indian eSports culture"

He, however, observes that the year commenced on a subdued note for the eSports industry, particularly with the suspension of BGMI (Battlegrounds Mobile India) in August of 2022, lasting for several months. Suresh called the BGMI ban a  setback which limited eSports activities significantly. This scenario persisted for the initial four to five months, compounded by the ban of another popular game Free Fire. However, the tide turned in May with BGMI's reinstatement, initially as a 90-day trial and later permanently.

Suresh also states that BGMI can be considered the cricket to Indian sport equivalent to eSports. Tournaments around the game command 80-90% of all eSports consumption in India. Interestingly, Suresh highlights that BGMI eSports, with a concurrent viewership in lakhs, commands the third greatest viewership in sport overall. "I believe, in some years,  eSports could surpass the viewership numbers that Kabaddi as it continues to solidify its status. Thus, eSports can become the second largest sport in India in 3-5 years."

The key to attaining this position lies in continuous investment from the publishers of the games. He believes the publisher's strategic and proactive investment determines the lasting value of an eSports title. However, neglecting this and adopting a passive role risks losing viewership to emerging sports or categories. Thus, the future of eSports hinges on how publishers actively invest and shape the distribution of fandom around their titles, with success contingent on proactive involvement rather than relying on autopilot. 

For Loco, the growth in the user base was fuelled not only by BGMI's return but the development of newer categories as well. "The latter half of the year proved to be exceptional for Loco, especially with the resurgence of eSports following BGMI's reinstatement. In the initial phase, with BGMI less prominent, Loco witnessed the rise of new categories, notably GTA V, fostering a vibrant community and encouraging role-playing formats. This development contributed significantly to the platform's growth, particularly in the southern market. As the year progressed, diverse categories gained prominence, with creators outside the gaming realm exploring various activities on the platform. However, the highlight was the robust comeback of eSports post-June, featuring non-stop thrilling tournaments in collaboration with key stakeholders and organisers."

Is micro monetisation the way forward?

Given the uptick in demand, the company also started exploring other means of revenue generation. In November, they introduced the Loco VIP program, a transaction-based model for premium users offering enhanced engagement, ad-free viewing, access to premium content, interactivity, and exclusive virtual goods. Suresh shares that the VIP program has gained significant traction since its introduction. 

Under this program, Loco executed their first transaction-based pay-per-view Esports tournament, SkySports Championship 5.0, in collaboration with the tournament organisers SkySports.

"The response from VIP users has been outstanding, showcasing a promising business model that doesn't solely rely on advertisers but also fosters direct revenue from viewers. These initiatives mark a highlight of the year for Loco, and we remain committed to investing in such impactful ventures in the coming year."

Suresh opines that community-driven events elicit the highest willingness to pay in terms of transactions. Unlike OTT platforms that offer event experiences, not community experiences, community-driven events create a unique bond, thus a higher inclination of viewers to pay for their content. "Whether watching alone or with others, the shared experience enhances the willingness to pay, and eSports, mirroring this behaviour, is gaining traction for the same reasons."

He also firmly believes that microtransactions will thrive in India. On the viability of a monthly subscription for eSports and gaming content, he says that he believes it has potential, but it's not Loco's current focus. We aim to let the ecosystem identify the top IPs, best leagues, and most engaging tournaments. "By allowing people to vote with their money, we can establish a culture where not every tournament is viewed equally, and priorities are determined by their success and audience preferences."

A roadmap to sustained growth

While eSports does have the potential to take on the likes of cricket or kabaddi, these sports command a very loyal audience base, which would tend to tune in to any event involving their favourite players or teams. The same can also be said to be the case for eSports, as eSports athletes also command a significant influence on their audience base with their engagements on social media.

eSports for India, can be termed as a social media platform solely. While social media ensures quick dissemination of content, it also brings forth the challenge of the user base having a rather fleeting memory. The same might not be the case for cricket or kabaddi, where certain courses of events regularly make a lasting impact on the audience. How can this growing industry grapple with this challenge? 

The new media entrepreneur says that the only way is to carefully manage tournament frequency and the creation of scarcity. A well-thought-out roadmap, including models such as leagues or franchises, can definitely help define team access and qualification criteria. Drawing parallels with successful models like the NFL or NBA, where a high volume of games is condensed into specific seasons, Suresh emphasises the importance of structured governance.

"While Krafton has made significant strides, any publisher venturing into eSports, be it for any game, must focus on long-term investments and thoughtful ecosystem development."

Surprisingly, many marketing managers are still unaware of eSports’ reach

The evolving landscape of eSports has seen advertiser interest grow beyond traditional endemic brands. There has been a notable shift with a diverse range of brands actively seeking participation. Initially, endemic brands invested for directly impacting sales and targeting their specific audience.

Over time, the motivation has changed from sales to, now, establishing a presence for many. He remarks that this shift reflects a broader understanding that engaging with platforms that command attention allows brands to effectively drive their messaging and connect with audiences in the eSports realm.

"While spearheading the development of my other digital startup, Pocket Aces, we encountered an important moment when we engaged with brands to make the significance of digital content clear to them. Brands initially perceived digital media merely as a format, overlooking its essence as a distribution medium for video content. The challenge lay in bridging this understanding gap. Similarly, for eSports, the paradigm has shifted as brands, on a larger scale, seek to maximise their presence. Recognising platforms with the ability to capture substantial attention, brands aspire to actively participate in conversations, leveraging these spaces to effectively drive their messaging and engage with audiences."

However, the awareness challenge still persists for ad growth. Suresh says that many marketing managers still may not be aware that BGMI ranks as the third most-watched sport in India, surprisingly. Upon learning this fact, they express a keen interest in understanding how to join the trend.

"Non-endemic brands are gradually entering the scene, and our discussions with them are becoming increasingly intriguing. Initially, there was a lack of understanding, leading some brands to partner with entities that didn't serve them well. As the ecosystem matures, it requires time and pioneering individuals who act as first movers, educating others and establishing a sustainable business model that provides brands with tangible value. Our close collaboration with brands leverages insights from Pocket Aces, contributing to their recognition and fostering trust in the evolving landscape."