TM206 eSports Industry Sector Study

eSports
Industry
Sector
Study
TM 206 Marketing
Dinno Sandoval
Meirin Negapatan
Nikka Lao
Daine Cabrera
Neil Andrew Mendoza

TM206 - eSports Industry Sector Study 1 of 47
Table of Contents
Executive Summary ................................................................................................................. 3
1.0 Industrial Structure........................................................................................................ 7
1.1 Industry Background...................................................................................................... 7
1.2. The Degree of Concentration within the Industry..................................................... 9
1.3 Content Distribution ..................................................................................................... 11
1.4 Sponsorships and Partnerships................................................................................. 12
2.0 Macro Environmental Trends......................................................................................... 13
2.1 Social, Cultural, Demographic and Environmental Trends.................................... 13
2.2 Political Trends............................................................................................................. 14
2.3 Technology Trends ...................................................................................................... 15
2.4 Economic Trends ......................................................................................................... 17
3.0 Industry Value Chain ....................................................................................................... 18
3.1 Primary Activities.......................................................................................................... 18
3.2 Support Activities.......................................................................................................... 20
4.0 Porter’s Five Forces......................................................................................................... 24
4.1 Threat of New Entrants ............................................................................................... 25
4.2 Bargaining Powers of Customer................................................................................ 25
4.3 Threat from substitutes................................................................................................ 25
4.4 Bargaining Power of Suppliers................................................................................... 25
4.5 Industry Competition.................................................................................................... 25
5.0 Market Segment............................................................................................................... 26
5.1 Geographical Segmentation....................................................................................... 26
5.2 Demographical Segmentation.................................................................................... 28
5.3 Psychographic Segmentation .................................................................................... 30
5.4 Behavioral Segmentation............................................................................................ 31
6.0 Emerging Technology and Products............................................................................. 34
6.1 Existing and Emerging Technology........................................................................... 34
6.2 Products......................................................................................................................... 35
7.0 Opportunities and Threats .............................................................................................. 35
7.1 Opportunities................................................................................................................. 35
7.2 Threats........................................................................................................................... 37

8.0 Recommendations........................................................................................................... 39
8.1 Push for the Passage of Government Policies Related to eSports...................... 39
8.2 More Collaboration with the Government................................................................. 40
8.3 Changing Negative Perceptions towards eSports .................................................. 40
8.4 Partnership with Major Media Platforms to Reach Mass Market.......................... 41
8.5 Positioning as an Official Sport.................................................................................. 41
8.6 Continue to work together to promote the industry................................................. 43
9.0 References........................................................................................................................ 44

Executive Summary
The main purpose of this report is to examine the state of eSports broadcasting
in the Philippines and to determine its huge potential as a booming industry.
A brief history of competitive gaming is presented to understand how eSports
captured the global market. The team found out that games that have intense
gameplay like First Person Shooters (FPS), Real Time Strategy, and Multiplayer
Online Battle Arena (MOBA) are more likely to be played and watched by the
viewers.
In this analysis, the team have gathered data and included a detailed look on the
major players in the competitive gaming industry in the Philippines -- Mineski,
TheNet.Com, Rappler, Inquirer, and TV5.
The industry is heavily concentrated, Mineski being considered as the dominant
force and thought-leader. The firm is taking advantage of being the first mover in
this new category, the company invested on crew, equipment and talents to
provide quality coverage for their audience. TheNet.Com is a very distant second
in terms of followers and viewers while Rappler, Inquirer, and TV5 act as media
partners. eSports’ emerging nature gives these first movers the chance to be
trendsetters in the market. There is no real competition thus far, as these
organizations focus more on the promotion and acceptance of eSports in the
mainstream market because their performance and acceptance rate is still
relatively low as compared with the global leaders.
Contents are distributed mainly on two major channels, YouTube and Twitch.
The latter quickly gained popularity after it was bought by Amazon and became
the leading platform for eSports streaming while YouTube launched “YouTube
Gaming” to cater this emerging niche. Content-makers like Mineski and TNC
produces videos with the use of basic production equipment like camera,
microphones, and switchers combined with more modern tools like technology-
advanced capture cards and Wirecast.
Recently, major brands like Smart, Globe, World Balance, Viewsonic, and Asus
are recognizing the potential of the eSportscasting Industry. These brands are
partnering with eSports event organizers to sponsor and co-brand.
Aside from the support from the major brands that the industry leaders are
getting, the macro environmental, technological, and political developments that
materialize are also encouraging for the first movers in this new industry.
The Macro environmental trends of the country also looks to be favoring the
growth of the eSports industry. The population of the Philippines being the
youngest directly impacts the high number of consumers for the industry. The
young population being very technologically connected is the primary driver for
the industry.

The technological trends happening in the country is also favoring the eSports
industry. Smart phones are now being used as the primary access points of
Filipinos to gain access to social media. In recent studies mobile phone data
usage will eventually overtake the data usage of fixed lines.
Mobile phone prices are also getting lower and lower. Since the introduction of
smartphones by big named companies, small local companies have been
manufacturing phones sourced from Taiwan or China. The trend is giving rise to
cheaper phones entering the market providing Filipinos access to social media
and online content
For political trends, there are many different initiatives that may change the
landscape of the eSports industry. One of which is the clamor of politicians to
drive changes in the IT infrastructure of the country. A good internet
infrastructure is one of the requirements in order for the companies that
livestream content. Senator Recto and the other lawmakers are pushing for
minimum internet speed across the country and public wifi.
The public wifi may be seen as a good attempt to provide internet access to
Filipinos. It provides them access to social media and to eSports content. Having
wifi in public areas will be a huge boost for the eSports casting viewership. The
minimum internet speed is another bill that will give huge benefits to this industry
as sportscasting as it is right now is heavily dependent on internet speed.
Overall, these trends happening in the country looks favoring the emerging
eSports industry. eSports is steadily picking up steam from customers and
Filipinos being heavily engaged in social media is fueling up this new industry.
The global eSports audience is 134 million strong and growing (Superdata,
2015). Investment in innovative business models, platforms and derivative
businesses further spurs growth in competitive gaming. In addition to traditional
marketing efforts, organizing events and streaming content improve awareness
and retention. Having said that, establishing such business in the Philippines
and positioning itself in the market provided with targeted customers will be a
good step to institutionalize eSports industry in the country.
In this study, the team determines the set of activities that an eSports
organization carries out to create value for its customers sets the value chain.
The value chain activities performed determines costs and effects on profits. The
tool can help us understand the sources of value of the organization. Linkages in
the activities coincides in the margin that implies the organization realized
profit which depends on the ability to manage the linkages between all
activities in the value chain.

For this study, we include primary activities that can be classified into product
or service related and market related activities. Product/Service related
activities include content creation, content packaging and content
distribution. In this activity, all production and development are incorporated
as well as process and other activities that contribute to the transformation
of the service.
Whereas, market related activities include marketing and sales, advertising,
channel selection, product and brand promotions, merchandise selling and
product pricing. The activities are performed to make sure that the products are
transferred to the targeted customer groups and making sure that the service is
efficiently delivered.
Also, support activities linkage to primary activities perform to assist the latter to
gain the competitive advantage. These include system infrastructure, human
resource management, technology development and procurement. Michael
Porter's Five Forces of Competitive Position model is also considered in this
study to provide a simple perspective of assessing and analyzing the competitive
strength and position of the business organization.
Part of this sector study are the suggested points under industry competitors,
threat of new market entrants, bargaining power of buyers, power of suppliers
and threat of substitute products, by which you can develop a broad and
sophisticated analysis of competitive position, as might be used when creating
strategy, plans, or decisions in the business. Strategies require another input for
it to be effective. Market segment inputs are normally incorporated in strategies
to broaden the view.
The sector study discussed ways on which the market maybe segmented. In the
eSports industry, the market may be segmented based on geographical
segmentation, demographic segmentation, psychographic segmentation and
finally behavioral segmentation. This paper highlighted behavioral segmentation,
where the target market is divided based on how they consume the product. In
delivering content to the market, eSports companies often rely on existing and
emerging technologies.
eSports broadcasting companies make use of tools that are already in the
industry. To deliver content, some companies use a combination of Twitch,
Youtube, Xsplit and other software for delivery. Content being delivered by these
eSports companies often are eSports competitions or guides which serves as
their main product. In any industry, there will always be threats and opportunities.
For the eSports industry, this paper will touch on the several opportunities that
companies under this industry may choose to exploit. Some of the opportunities
discussed by this paper is the creation of Philippine eSports Association
(PeSPA), a governing body for the entire industry, the potential of eSports as a

marketing vehicle, the opportunity of eSports to venture into broadcast TV, the
rise of mobility and the young population of the country.
The eSports industry however also faces several threats, on the political level,
the industry lacks government policies to support it, Local LGUs also enacts
regulations against some of its components but the biggest threat is the
perception of customers against eSports as a whole. To exploit and mitigate the
opportunities and threats, this paper recommends several steps for the industry.
This study recommends that the industry make full use of PeSPA in collaborating
with the government to push for government policies in support of eSports, the
industry is also expected to work on changing the perception of the masses
against eSports and attempt to push for the recognition of eSports as an official
sport activity.
All in all, it will take huge amount of effort and cooperation from the eSports firms,
media partners, sponsors, and the government to push the industry into the
mainstream market which can contribute to the our country’s economic growth
and global status in eSports in general.

1.0 Industrial Structure
1.1 Industry Background
Competitive gaming has existed almost as long as video games themselves. The
arcade games of the 80s encourage competition in the form of posting high
scores, inventing the ‘versus’ option, or by simply outlasting a co-player. In the
90s, the rise of PC games that require quick reflexes, twitch skills, coordination,
and organized strategizing like Quake, Diablo, and Starcraft gave way to the birth
of eSports. Games may be categorized into genres such as first person shooter
(FPS), Real-time Strategy (RTS), Fighting, and Role-playing Games (RPG).
These games laid the foundation of what competitive gaming is like today -- fun
to play and enjoyable to watch.
eSports flourished after the turn of the millennium because of the popularity of
major tournaments like World Cyber Games, Electronic Sports World Cup, and
Major League Gaming (MLG) that offer huge lump sums for the winners. In 2006,
USA Network covered MLG’s “Halo 2” tournament making it the first tournament
to be televised in North America. MLG’s Spring Championship was huge a
success when brought more than 4 Million viewers, out-doing established
sporting events like the NBA All-star game in 2012. (Edwards, 2013)
As eSports became more popular worldwide, other major tournaments in
different parts of the globe were established. The most notable tournament is the
Korean league called Global Starcraft II League (GSL). It is considered as the
most prestigious Starcraft 2 competition and it has doubled its viewership every
year since its launch in 2010. In 2014, they reached a massive 100 million figure
taking them arguably at the pinnacle of the gaming world. (Edwards, 2013)
Video games are now more popular than ever because of the intense gameplay
and spectator-friendly nature of the Multiplayer Online Battle Arena (MOBA)
genre. This genre includes games like Defense of the Ancient (DOTA) and
League of Legends (LoL) that dominate the gaming world. As games like LOL
and DOTA become more popular, so do too the potential of eSports.
The eSports industry is now a multi-million industry in other countries such as
South Korea, China, United States, and in some parts of North America and
Europe. Viewership has been growing exponentially and is now beginning to
change views -- it is now being compared to the mainstream sports like football
and basketball.
In the Philippines, the gaming population is growing with over 25 Million engaged
Filipinos in different games like DOTA, League of Legends, CS:GO, Warcraft,
Dragon Nest, Heartstone, and Starcraft. Events and tournaments are also a now
constant thing in major gaming hubs in the metro, contributing to the popularity of
Esports all over the archipelago. As the pace and volume of activity increases, a
small number of innovative firms are now gearing up in a more mature and far-

sighted manner which give rise to a whole new subcategory, eSports
Broadcasting or eSportscasting.
eSports broadcasting industry is still at its infancy and the major players are
complementing rather than competing with each other to support the promotion
of eSportscasting industry. Mineski Corporation, TheNet.Com (TNC), TV5
Network, Rappler, and The Inquirer are the early movers of this new market.
Mineski Corporation, a company that manages a network of cyber cafe that
caters to the gaming community, is the primary mover and promoter of Esports in
the Philippines. They organize their own tournaments and manage the largest
Esports portal in the country (Mineski.net). More importantly, the company is the
pioneer in the new subcategory by creating a content-creation arm, MineskiTV.
The company now covers events, produce videos, and stream tournaments for
the eSports fanatics. It has its own group of professional e-Sportscasters to make
the content more entertaining. Having e-Sportscasters helped Mineski gain
competitive advantage and became the thought-leader in the industry. The
casters coin terms and relate these terms to the Filipino pop culture to make the
content more relatable to the target audience. The owner and founder of Mineski,
Mr. Ronald Robbins, is considered by many as the “Father of Philippine eSports”.
(www.mineski.com)
TheNet.Com (TNC), one of the biggest Internet Cafe Company in the Philippines,
founded an organization called TNC Gaming to promote the eSports in the
country. Its purpose is to give every aspiring gamer the chance to partake in
high-level tournaments in different fields. The organization has a vision of
unifying and improving Philippine Electronic Sports by providing up to date news
and happenings in the competitive eSports scene. To help solidify this vision, the
firm went beyond their boundaries and started to stream both local and
international games to their followers who are eager to learn new techniques,
follow their favorite teams, or simply want to be entertained.
(www.TNCgaming.com)
Rappler and Inquirer, two of the Philippines’ leading media outlet and social
media news distributor, recognize the potential and the importance of eSports in
today’s culture. Both firms cover the happenings in the eSports industry and
feature replays of fights and highlight reels from recent tournaments.
In 2014, through the partnership between Philippines eSports Organization
(PeSO) and Inquirer.net, they launched eSports by Inquirer.net. Their main
objective is to bring eSports news and stories not only to the fans and to the
people who enjoy them but to the mainstream as well, bringing insightful and in-
depth feature stories about eSports and gaming culture both in the Philippines
and beyond.

Rappler on the other hand focuses in organizing tournaments and in creating
their own content. The recently concluded Rappler Gaming League (RGL) Dota 2
tournament was a resounding success wherein 8 teams from Southeast Asia
joined the tournament. Rappler streamed all the fights live on their website from
May to July 2015. They followed it up with RGL: League of Legends
intercollegiate tournament, all fights can be accessed from their website and
livestream channels as well.
The Cojuangco - owned television network, TV5 is also positioning itself to be the
first mover in eSportscasting among the major television networks. At a press
conference, TV5 Sports Division Executive Chot Reyes announced their newly-
formed alliance with Mineski. He claims that this is the start of their long-term
investment in the eSports industry and that they will eventually provide coverage
of the Mineski Pro-Gaming League. The network will also provide select airing
slots for GG Network, a program that aims to showcase the best eSports talents
that the local scene has to offer.
All of these channels support each other in one way or another to promote the
eSports industry here in the country and to put gaming in a positive perspective
in the mainstream market. The support and dedication of the Filipino gaming
community is going to be the biggest factor to push eSports in the Philippines
forward.
1.2. The Degree of Concentration within the Industry
eSports can be a huge industry, not only in terms of prize money but also in
terms of the number of viewers. With the huge bulk of the market considered to
be heavy computer users, it is only practical that content makers use the internet
as its main channel for content distribution. Content makers use video sharing
and streaming websites like YouTube and Twitch to reach a wider audience.
Twitch Interactive (www.twitch.tv) was launched last June 6, 2011 as a streaming
platform for playthroughs of video games and broadcasts of eSports. It was a
spin-off of the then popular general-interest streaming website, JustinTV
(www.Justin.tv). It was basically a non-entity in both the streaming and gaming
platform until Amazon saw its potential and bought it for a reported $1.1 billion in
2014. According to a 2015 study, Twitch is now the leading video platform and
community for gamers with over 100 million Unique Viewers per month, 1.5
Unique Broadcasters per month, 16 billion minutes watched per month, and is
considered as the fourth largest source of internet traffic peak in the US. (Siglin,
2015)
MineskiTV and TheNet.Com both have active Twitch accounts wherein they
stream their live contents. MineskiTV shows its dominance in the market by
registering 18,143,172 views and 22,319 followers while TNC have 217,659
views and 362 followers.

In YouTube, MineskiTV is still the dominant player by means of their 10,036,542
views and 22,319 niche-identified followers, followed by TheNet.Com with their
1,135,698 views and 2,914 followers. Understandably, both of the media outlets
are in the bottom with Rappler recording 3,624 views while eSports by Inquirer
only have 1,485. Rappler may have 86,999 subscribers but this is due to its news
casting nature and social media standing.
TV5 concentrates more on the promotion of the eSports as an industry by
reviewing the fights, discussing on the updates, and broadcasting the highlights
to the mainstream market.
TWITCH
Company Views Followers
MineskiTV 18,143,172 22,319
TNC 217,659 362
YOUTUBE
Company Views Followers
MineskiTV 10,036,542 35,957
TNC 1,135,698 2,914
Rappler 3,624 86, 999
eSports by Inquirer 1,485 3
These numbers are very low if compared to the international scene. The
Riotgames channel dominates the international scene with a whopping 1,983,408
followers (2nd) and 777,799,939 channel views (1st). Starladder1 is a very
distant second in terms of channel views with 207,608,960 with only 293,464
followers. The Syndicate channel is the leader in terms of followers with
2,271,004 and 37,789, 539 channel views. According to
www.superdataresearch.com survey in 2013, US viewers watch eSports 19
times per month and it lasts for 2.2 hours on the average. These numbers show
that there is a huge market in eSportscasting. The more people play games, the
more potential fans of eSports there are. And as game developers innovate
resulting in more advanced outputs, games become more exciting for spectators.

Top 10 Twitch Streamers - Filtered by Most Followed
Source: www.socialblade.com
Top 10 Twitch Streamers - Filtered by Most Viewed
Source: www.socialblade.com
1.3 Content Distribution
Contents are distributed in these channels with the use of traditional and modern
media technology. Cameras, lights, and microphones are a must in covering the

casters and the players. A reliable PC set-up with a capture card is needed to
capture in-game feeds. All video and audio feeds are connected to a switcher
wherein the technical director and the producers will control which video/audio
will be aired. The switcher is connected to a Wirecast that will encode the final
output for internet streaming via Twitch or Youtube.
1.4 Sponsorships and Partnerships
On the global stage, companies are already taking notice that people are actually
watching these video games. This is the reason why big brands like Coke, Intel,
Nissan, American Express, Red Bull, and of course, computer-related brands are
already gravitating towards eSports. The industry can give them access to a hard
to reach a large participant base that does not usually watch television.
On the local scene, brands are also becoming more aware of eSports. Smart and
Globe are already diving into the scene by sponsoring eSports events. World
Balance, Viewsonic and Asus are all pushing for co-branding with the Mineski
team to be visible to the niche as well.
Overall, the future looks bright for the eSports industry as all signs point towards
the positive side. The first movers will keep on complimenting each other, hoping
to cross the mainstream market and to get the attention of major brands.

2.0 Macro Environmental Trends
2.1 Social, Cultural, Demographic and Environmental Trends
High number of Millennials
The Philippines is one of many countries that have high number of population
that is young. The average age of the country based on a recent study of the
government is around 22 to 23 years old. Overall the country has 9.7 million at
ages 15 to 19, 9.5 million at ages 20-24 and 8.8 million at ages 25-29. (NCSB,
2015)
In a recent study, millennials are said to be the generation that is shaped by
technology. Millennials at young age were more exposed than the other
generations to technology. it is said the Filipino millennials are hyper engaged
and tend to stay connected to social media longer.
Hyper Engaged Filipinos
Internet accessibility is a major trend in Filipino households and has been picking
up since the late 2000s. In a recent study it is said that Filipinos spend an
average of 4 hours per day accessing social media. A good percentage of the
population is considered as “hyper-engaged” or “hyper-connected”. In the
Philippines alone, there are 42 Million active social media accounts and around
36 Million are connected via their mobile phones. (GSMAIntelligence, 2015)
Hyper connected Filipinos spend much time accessing social media websites
and follow multiple interests. Interests that Filipinos follow could a local artist, a
cooking show or anything else that is worthy to follow. Filipinos in the internet
actively comment, review and engage in online activities with these interests.
eSports as an official sport
eSports is a rising trend in the Philippines. In recent years the Philippines were
able to produce teams that competed in other countries as eSports athletes. The
athletes who went to compete brought home with them fame and cash rewards.
News about the athletes spread quickly within the country and fostered the desire
for others to compete internationally.
Filipinos have been hooked to eSports since the introduction of games where
multiple players can compete with each other. Small competitions have been
organized by local computer shops which eventually turned over the years into
more formal competitions. Currently, some of the well-known competitions are
National Cyber Collegiate League (NCCL), eSports and Gaming summit (ESGS)
and eSports league summit (ESL). Competitions often have big named partners
that sponsor the event and provide prize money for the competitors

In 2013, the Philippines had a delegation in the TankAsia Masters Season 2
league where the game is about controlling historical tanks in teams and
combating with other teams in either a death match or by capturing objectives.
The delegation that competed won first place and brought home with them
$60,000.00. Over the years, there have been several Filipinos who claim to be
professional eSports players and have been focusing in improving their
gameplay. There are also those who are selected by teams that get paid by
playing for the team. Several organizations are pushing for the recognition of
eSports as an actual sport.
Rise of eSports in the Philippines
In recent years the Philippines encountered a steady increase of local companies
hosting huge eSports events. In 2015, there were several big name competitions
that opened to cater to Filipino eSports players. Smart telecom opened its
Philippine Clash 2015 with prizes of around Php 2 Million and the grand prize of
Php 500,000. Another competition in the Philippines is the National Cyber
Collegiate League where teams from different universities are matched with one
another until a champion is determined.
The competitions in the Philippines didn’t start out as organized as it is right now.
Several started from creating small competitions that are organized by local
computer shops to small group of friends. Eventually the rise of the eSports in
the Philippines gave birth to more formal and organized competitions that cuts
across the archipelago.
2.2 Political Trends
Philippine eSports Association
The Philippine eSports community recently gained public recognition from the
government in the establishment of Philippine eSports Association (PeSpa).
PeSPA is an organization that aims to promote eSports awareness in the country
and to educate the general public. It hopes to remove the negative perception by
society on competitive gaming.
Another mandate of PeSPA is to consolidate all of the competition dates in order
to prevent overlapping competitions. At the same time it's establishing a quasi-
court where it will help resolve conflicts within the eSports community. It also will
help prevent the exploitation of players and solve any complications.
Bilis Konek Act of 2014
Bilis Konek Act of 2014 by Ralph Recto if passed will require all ISP companies
in the Philippines to have a minimum of 10 mbps for wireless connections and 20
mbps for fixed line connections. The senate act filed by Senator Recto will have a
big impact in the internet infrastructure of the country. The bill if passed will more

than triple the country’s current average speed. The bill is also hinged on a study
by Ericsson that doubling the internet speed increases the national GDP.(Recto,
2014)
Free Public Wifi Act of 2015
Another bill filed by the senate is the Free Public Wifi Act of 2015 by Senators
Recto, Villar and Escudero. The bill was originally filed by Senator Recto to
provide free wifi access in public establishments. Senator Recto likens the
internet to roads, bridges and other infrastructure explaining that these are all
relevant to stimulate the economy.
The Free public wifi act and Bilis Konek act if both passed will be a huge boost in
the way Filipinos access the internet. Both will eventually give passage to more
content being distributed in the country and more access points for Filipinos.
(Recto, 2015)
2.3 Technology Trends
Smartphones as primary access device to content
The Philippines currently has a trend where smartphones are becoming cheaper
and cheaper. The trend is being led by local companies especially myphone and
cherry mobile that sells smartphones at the cost of feature phones. With the
amount of smartphones being purchased by Filipinos, smartphone numbers are
expected to overtake the number of feature phones in the market. The price of
smartphones is also decreasing drastically as more and more players are
entering the market. (Cisco, 2015)
Smartphones is a new channel for content distributors as it allows images, ads
and videos to be delivered to customers. Smartphone features since 2010 have
also been on a steady increase as more and more developers have shifted to
developing new applications for this media.

Internet Households
The Philippines currently has a population of 104 million. In a recent study by
International Telecommunications Union(ITU) and United Nations Population
Division around 39 million Filipinos has access to the internet in their homes.
Although short from the international standards of internet penetration versus
other countries, the Philippines may boast of high growths in terms of households
acquiring access to the internet. In 2011, around 4.2 million Filipinos gained
access to the internet through their homes and in 2012 the Philippines gained 7.4
million more. (internetlivestats.com, 2015)
Mobile Internet as access to content
3G mobile-broadband coverage based on a study of ITU will cover 29% of the
world’s rural area and 89% of urban areas by the end of 2015. Since 2007,
mobile data penetration has increased 12 times and is now covering 69% of the
world’s population.[2] In a study of Cisco Networks, Mobile internet traffic in the
Asia Pacific region will grow 10 fold until 2019. At the same time, mobile internet
connections will outgrow fixed data connections by three times during this period.
(Cisco, 2015)
In the Philippines, 3G internet has an average speed of 1.5mbps and 4G internet
has an average speed of 4.5mbps. (opensignal, 2015) Throughout the years,
telecommunications companies have lowered the cost for Filipinos to avail of
mobile internet service and increased internet covered areas. It is expected that
local telecommunications company are continuously striving to have 4g coverage
all throughout their areas.

2.4 Economic Trends
Rising Economy
In the past 5 years, the Philippines experienced a steady GDP growth averaging
around 6%. A good GDP growth is often associated to a healthy economy. The
healthier the economy is, the more jobs there are for the people.
For 2015, the inflation rate of the country also dropped from 2.4% in January to
just 0.4% in October. Lower inflation rate means that the value of money of the
population is higher which have a higher purchasing power. A high inflation rate
affects the population greatly as basic goods and services increase in prices.
(NEDA, 2015)

3.0 Industry Value Chain
This section will give us an understanding on how the eSports industry creates its
value in the market through series of activities. In this marketing principle
introduced by Michael Porter, it suggests that the more value an organization
creates, the more profitable it is likely to be. And when you provide more value to
your customers, you build competitive advantage. Determining the set of
activities that an organization carries out to create value for its customers sets
the value chain. Porter proposed a general-purpose value chain that companies
can use to examine all of their activities, and see how they're connected. The
way in which value chain activities are performed determines costs and affects
profits, so this tool can help us understand the sources of value for our
organization.
3.1 Primary Activities
Content Creation
One of the most fascinating aspects of the digital revolution is how it has enabled
new content forms and consumption models to develop and thrive. For decades,
video content came in standard packages – a 30 minute episode, a 90 minute
film and so on – and from traditional providers, be it your local broadcast affiliate,
movie theater or corner store. Today, however, video entertainment defies
standardization. And it has captured Electronic Sports that is rapidly developing
as a content and has defined its position in the market.
One of the big differences between traditional sports leagues and eSports is the
popularity of user-generated content. In a nutshell, creating content in eSports
industry is to create interesting, engaging and relevant content and provide it to
the customers. This is worked by game publishers and developers that produce
games used to create content. Examples of these are League of Legends by Riot
Games, World of Tanks by Wargaming, SMITE by Hi-Rez Studios, Call of Duty
by Activision Blizzard and DotA 2 by Valve. The game publisher and developers
are responsible for licensing the rights and the concept on which the game is to
be based as well as for the product development and creation of new content.
These gaming contents serve as the core of the eSports industry.
Content Packaging
In eSports industry, the leagues and game tournaments serve as the content
packaging. Organizers host a variety of competitive gaming events both on and
offline and broadcasting tournament wherein several professional online gamers
will compete for different online games produced with players which are essential
resource for tournament organizers. For instance, Electronic Sports League
(ESL) is an eSports league, which is operated by Turtle Entertainment in
Cologne, Germany. Today it has more than 5,000,000 registered members and
consists of over 1,000,000 teams, which have played over 22.5 million games in

addition to leagues and tournaments. The ESL supports over 50 games in
different genres through various national and international leagues. Other
leagues are The Summit (International League) and Mineski Pro-Gaming League
or MPGL (Local League). They all promote and organize eSports events in return
for a share in advertising spent by brand holders and advertisers. In addition,
league organizations also generate revenue via merchandise and ticket sales for
live events.
Content Distribution
This is how the content package distributed through different platforms: Content
distribution facilitates the live broadcast of competitions and professional player
videos. In the eSports industry, Digital technology has made it easier for
developers to distribute their games via the Internet, and thereby lower the
barriers for entry into this link of the value chain. One of the world’s largest live-
streaming site for game content is Twitch.tv of Amazon. Twitch is designed to be
a platform for video game-related content, including e-sports tournaments,
personal streams of individual players, and gaming-related talk shows (Miller,
2011). There are other live-streaming sites for game content like Azubu,
YouTube, MobCrush and Hitbox.
Using live streaming and eSports as a central component of a game’s marketing
strategy changes the design requirements. Broadcasting digital video content live
over the Internet, called live streaming, has become so huge to competitive
gaming which generates millions of online viewers during most recent
championship. The job of the distributor involves handling packaging and
broadcasting and in some cases providing user support. In such cases, the
distributor owns no rights to the product, but helps in making it available on the
market.
Marketing and Sales
Brand holders and advertisers that pay broadcast channels in exchange for
displaying their logos, products, or naming a competition is part of the eSports
Casting revenue. Brand owners and advertisers are adapting to emergent forms
of entertainment, which will grow sponsorship deals across the segment.
The total figure includes sponsorship deals, advertising on digital channels like
Twitch and YouTube, publisher-incurred marketing expenses and other forms of
eSports advertising. Advertisers from different segments like consumer packaged
goods, automotive and technology brands are now participating in eSports event
as part of brand promotion. Examples are Coca-Cola, BENQ, NVIDIA, SK
Telecom, American Express, Nissan and HTC to name a few.

Service
The eSports casting serves as the service. It has servicing eSports viewers over
hundreds of millions around the world through different broadcast channels.
Viewers also spend for their monthly gaming budget on additional content and
peripheral devices like headphones and controllers. eSports videos have rapidly
transformed from a niche activity into a widely-watched, global, cross-platform
entertainment category. The end – users patronizing the service are called the
Audience. In the Philippines, eSports have been growing exponentially.
Currently, the uniqueness of online gaming has attracted younger viewers,
including teenagers that are more immersed in online video content. However, as
generations grow up with video games, eSports appeal as well in the older
demographics (Superdata, 2015).
3.2 Support Activities
Human Resources
a. Management Team
This may consist of the Owner/Manager, Marketing Director and Content
and Social Media Manager. They handle most of the operations and
managerial tasks, marketing, product development and process
improvement.
b. Public Relations
This is the eSports’ casting presence on social media, people’s impression
of your organization, and any possible news that goes public (wanted or
unwanted). This can be handled by the PR Managers and PR Officers. As
part of the Public Relations, they should foster relationships with editorial
publications, bloggers, and other media outlet and identify and report on
digital/social media trends, tactics, and technologies while developing
strategic recommendations that inform PR programs in the eSports
industry.
With this, they can develop relationships with both traditional and digital
media outlets, enthusiast and mainstream, and create and execute
successful PR strategies that will help bring eSports to more players
across the local and international market and create connections to the
publishers, developers, online players and stakeholders.
Fan engagement is key to the success of the organization, as you
might not have realized, but tournaments are not the only source of
funding for you. Your company might choose to sell merchandise such as
clothing and small accessories.
There are 3 big sites for social media in eSports: Facebook, Twitter,
and Reddit. aily, PR Officers must monitor and note all news that comes

out about the company along with what the company posts online
(Peaches, 2015).
i. Facebook
 Great for lengthy posts which highlights new additions and events
 Has a lower following base
 Several guides on how to market yourself
 Uses the analytics to see when your consumers are online
 Create posts that encourage engagement
ii. Twitter
 Short and quick to the point
 Great quick conversations
 High Engagement Rate
iii. Reddit
 Recognized posts get high traffic which means more engagement
 Free advertising (Be careful of this as it could warrant unwanted
news)
c. eSports Casters and the Casting Process
Basically, an eSports caster role is to give commentary, suggestions,
gaming analysis and describe live actions in an online gaming live stream.
Just like a sports commentator, an eSports caster should be
knowledgeable enough about the online gaming for better appreciation of
the information being delivered. Often the casters have professional
players as their co-caster who has even more in - depth knowledge of the
game.
As an eSports caster, you should know which kind of commentary best
suits your personality. There are two types casting that you can work on
(Lee, 2014):
Play by Play Casting, involves giving a running commentary of the action
as it happens in real-time. The nature of great play-by-play casting
requires a quick mind, articulate speech, and strong knowledge of what’s
going on.
Color Casting, also known as analytical casting, fills the gaps when there
isn’t much play-by-play action. Many color commentators are experts who
can provide in-depth analysis of strategies while other forms of color
commentary exist in the form of statistics, background information, and
humor.
In real life scenarios, most casters tend to pair a play-by-play with a color
caster.

Systems Infrastructure
In eSports casting business, you have to consider the right casting medium to be
used. Choosing the right software for live streaming and recording gameplay
videos should be considered. Example of software is Open Broadcaster Software
for live streaming and recording gameplay videos. Live streaming video requires
quite a bit of CPU and GPU strength, especially if you want good quality (at least
720p). For Open Broadcaster Software, you can use their settings estimator to
see how well you can stream. You’ll also need a fast Internet connection that’s at
least 1.5 Mbps upload. Lastly, you will need a microphone or headset with good
audio quality. At the very least, captured audio should be crisp and clear without
any static, buzzing, or other artifacts that are harsh on the ears (Lee, 2014).
For other tools, livestreaming can use TriCaster, a product that merges live video
switching, broadcast graphics, virtual sets, special effects, audio mixing,
recording, social media publishing and web streaming into an integrated, portable
and compact appliance. TriCaster has changed the way producers cover and
distribute live events. It set a new business standard as an innovative, easy-to-
use appliance for portable live production and streaming. It has become the
option for video producers worldwide. Production crews from one person to small
teams can set up rapidly and create from confined spaces where production
trucks can't go. The tools you anticipate to find in a live Television truck are
included in TriCaster, from multi-camera switching and audio mixing to titles, clip
playback, live streaming and even network-style virtual sets on most models
(Cherry, 2011).
Technology Development
To maximize the eSports live streaming business, producing new videos and
streaming content that are relatable to eSports will be desirable to give your
audience more options to watch that are live, social and interactive.
Another part of the development is the mobility of the business to be accessed.
The accessibility of the content streaming aside from desktops or laptops can
also be viewed via over-the-top (OTT) and set-top boxes (STB) available for
audiences. Over-The-Top (OTT) means the delivery of video content via the
Internet, without requiring users to subscribe to a traditional cable or satellite pay-
TV service. Whereas, Set-top boxes (STB) is an information appliance device
that generally contains a TV-tuner input and displays output to a television set
and an external source of signal, turning the source signal into content in a form
that can then be displayed on the television screen or other display device. It’s a
set-top box that streams broadcast TV to mobile devices.
Realizing the massive eSports broadcasting market was totally energized by this
capability and that providing these technically savvy and hugely popular
audience and gamers, these tools could democratize broadcasting over the web.

Procurement
Every eSports platform or distribution channel acquires a game agency as an
external source for them to be able to deliver additional reliable and fascinating
content to eSports fanatic. In this sector study, we will treat the game agency as
the one producing teams, represented players, managed tournaments, created
content, and brought numerous advertisers into the gaming space. And this
game agency serves as the procurement as we are acquiring their services in
order to create value. This also supports our mentioned primary activities.
One example is when Twitch acquired GoodGame, an eSports agency that
specializes in sponsorship sales. GoodGame has also grown into one of the
gaming industry’s most progressive talent and content companies. They are all-
in-one talent and content company focused on gaming and eSports. The
acquisition will allow Twitch to harness GoodGame’s unique service package, as
well as its staff’s industry expertise and community leadership, in order to offer
an even broader array of support and monetization opportunities to the greater
Twitch community (Twitch Official Blog, 2014).
The figure below shows the summary of value chain model for eSports Casting
based on analysis patterned to Porter’s Value Chain Model.
Porter’s Value Chain Analysis for eSports Casting
The linkages between the activities in the value chain are very essential. It is
crucial for the success of the business. The linkages are flows of information,

goods and services, as well as systems and processes for adjusting activities.
For instance, only if marketing and sales function delivers what particular brand
should be shown during the livestream delivers sales forecasts for the next
period to all departments in time and reliable accuracy. If procurement will be
able to do the job and forwards the needed service to the content distributor, then
operations will be able to livestream in a timely and effective manner, as
predetermined by marketing. In effect, the linkages are about to execute
seamless cooperation and exchange information between the value chain
activities.
Within the whole value system, there is only a certain value of profit margin
available. This is the difference of the final price the customer pays and the sum
of all costs incurred with the production and delivery of the service. Each member
of the system will use its market position and negotiating power to get a higher
proportion of this margin. Nevertheless, members of a value system can
cooperate to improve their efficiency and to reduce their costs in order to achieve
a higher total margin to the benefit of all of them.
4.0 Porter’s Five Forces
This section of study will give us an understanding of where power lies in the
business situations. It will help us to determine both the strength of the
company’s current competitive position and the strength of a position we are
considering to move into. With a clear understanding of where power lies, you
can take fair advantage of a situation of strength, improve a situation of
weakness, and avoid taking wrong steps.

4.1 Threat of New Entrants
Competitive Rivalry
This is low since the eSports casting industry is new in the Philippine local setting
and this is something that is being capitalized as of the moment.
Economies of Scale
This is low since eSports casting is currently offered online thereby removing
premium on the physical operations or activities.
Product Differentiation
Brand identification and customer loyalties stemming from past advertising,
product positioning, or longevity within the industry is less a factor since
professional eSports are a relatively new phenomenon.
Government Policy
Betting also becomes a form on the outcome of eSporting events is not yet
uniformly legal. No government policy is legislated on this as of the moment.
4.2 Bargaining Powers of Customer
Differential advantage (uniqueness) of industry service
Demand of style is high. Casting involves a great deal of skill in order to make it
known. You must have at least a basic understanding of the game you are
casting, you must be articulate, you must be able to display charm and strike the
ideal level of enthusiasm.
4.3 Threat from Substitutes
Availability of close substitute
They can choose from the existing eSports casting services such as Twitch
(Amazon), Azubu, YouTube, MobCrush, or Hitbox.
4.4 Bargaining Power of Suppliers
Strength of distribution channel
This is set to be high for the international event leagues and tournaments and set
to be low for local leagues and tournaments.
4.5 Industry Competition
Since the eSport industry is very new in the Philippines, it is set to be low.
Mineski and TNC (The Net.Com), eSports companies catering eSports services
are helping each other in promoting the eSports business in the country so it
could increase awareness in the market. Currently, they are expanding their
business by opening several branches and franchise.

5.0 Market Segment
Market segmentation aims to help identify the market that are different from one
another in terms of behavior, age range, occupation, buying power, and
archetype. Segmenting will allow the group to get a firm grasp of each type that
can help satisfy the demands of specific target markets therefore maximizing
customer’s potential. By understanding and meeting the market’s demands, and
anticipating the different needs of different people, the group can adapt certain
strategies and treatment based on the segment.
The group took into account the requirement to identify market segment. First,
they must be identifiable, accessible, substantial, has unique needs, and durable.
By also considering that the segments should have differentiating attributes to be
measurable, and yet at the same time similarities, with age also a factor in which
the needs vary. Accessibility is also looked into as reachable through
communication and distribution of channels. Internally homogenous as gamers
and eSports fans and externally heterogeneous in that age also plays a factor to
their behavior.
Aside from that, the group also took into account whether to look into
geographical, demographical, psychographical, or behavioral characteristics. The
group aims to illustrate how these segmentation can be tackled and how to
choose the most appropriate to use and identify which one can predict the rise of
viewership in eSports.
5.1 Geographical Segmentation
To define geographical, the group looked into the places where the organizations
operate. Since competitors and spectators come from different countries and the
tournaments are hosted online, it breaks the borders. Locally, viewership can be
categorized per city and collecting pubstomp attendees. It can give one a general
idea on how many are concentrated in Manila area versus the provinces.
Researching online, the group found a sample of the eSports fans viewership
numbers since June 2015.

Another example of looking at it geographically is to look at the owner and player
of a sample game. In this illustration, Dota2 is used as the sample game to look
into how many potential viewers a firm can get per country. With the total number
of 58M owners of the game, averaging 750,000 concurrent users, that is just one
slice of the pie. With League of Legends that have nine times the user base, and
with other eSports game coming online, it’s only a matter of time that this
emergent stage transition to reach the explosive growth stage of the industry.

5.2 Demographical Segmentation
As for the demographical segmentation that is easily discernible that eSports is a
niche, and those who watch it is another niche within a niche. Majority are male
with an overwhelming 90:10 male-to-female ratio in the local market versus the
60:40 in the international scene. Also, if one compare last year’s 70:30 ratio of
viewership based on gender, the study shows that the female enthusiasts are
getting into the scene as well. However, the market can be segmented in
numerous ways if demographic factors such as age, gender, life-cycle,
educational accomplishments, and income level are considered. A study by
Newzoo yielded these results below.

In comparison, the local scene surprisingly yielded a lot of well-educated viewers;
international study shows that there are potential big spenders to be tapped
locally being that majority are working full-time jobs with access to steady
income. Additionally, majority are single and does not have any familial
responsibilities, hence the segment’s spending habits will be for their own
luxuries.

5.3 Psychographic Segmentation
For psychographic segmentation, the team looked into the activities, interests,
opinions, values or attitude of the gamers. For this one, the group can take into
account the reasons as to why gamers participate and watch the tournaments.
Amongst the reason cited, majority would claim that they want to feel and be part
of the gaming community, some would want to watch their favorite teams and
players, connect with friends that they play with by discussing live games, others
would love seeing their “idols” and celebrity players that they look up to. Others
watch pro-players game in order to become a better player by learning their
movement.
Comparing the international eSports questionnaire to the local scene where the
team conducted its own market survey, results indicated that there are
differences in behavior. People locally have a different priority in contrast to the
overall eSports scene. This can be attributed to the values Filipinos have as a
gaming community. Giving more importance to analytical viewership to improve
their game play and less on following their favorite players/teams. A contributor
to the fact is that the country does not have a national representative until
recently. Hence, the lack of a united team banner to support during the
tournaments. The market research’s goal is to know “Why do people watch
eSports?”. See the image below for the local market responses:

5.4 Behavioral Segmentation
In the end, the team decided to go for behavioral segmentation, which is based
on how people react towards the product. The study took into account their
decision making ability, purchasing power, level of enthusiasm towards the
game, their educational attainment, their marital status, their reason why they
watch the games, and how active they are within the eSports community. In this
case, the product is eSports (digital sports). Looking at it cumulatively and on the
global side of things, 54% are from Asia, with occasional viewers as a majority.
For this market segmentation study, the team focused on Massively Online Battle
Arena (MOBA) players in order to quantify the local gaming community.
Comparing Live views to Overall viewership locally, the majority are regular
viewers compared to the global numbers. This is probably due to the fact that
while eSports is not as accessible here versus other countries that have
dedicated TV channels.
Here in the local scene, avid fans consume the content voraciously and
fanatically. In this scene, viewer consumption is synonymous to customers
purchasing as the things they are accessing are content which can be a money-
generating component of the eSports industry.
Surprisingly, women are split evenly across all 4 categories ranging from 20-
30%.

Regular eSports Enthusiasts (Participant/Viewer)
 These are the viewers who watch and buy tournament tickets, follow all
their favorite pro-teams, and join eSports competition. They would stream
games and cast, moonlighting as volunteers in events.

 6% worldwide, 8% locally
 Usually have gaming peripherals, each with over $100 budget, have a full
time job, owns a top of the line technology (mobile, tablets, PCs or
laptops), in the high income bracket.
 Would own a Youtube or Twitch channel and may have some fan
following and watches to learn and improve their play style
 Majority of this group are males whose age range between 18-32 years
old
 20% of the females who watch livestream are in this category
 30% of the professionals locally only earn meager allowances (unless they
make big winnings)
Occasional eSports Enthusiasts (Participant/Viewer)
 These are the viewers who occasionally watch and buy tournament
tickets, follow some pro-teams, and at times, join eSports competition.
Some would do occasional casting for teams they like or games they’d
love.They would sometimes moonlight as volunteers in events.
 ~9% worldwide, 22% locally
 Average income
 Still dominated by the males
 28% of the females who watch livestream are in this category but they’re
in this scene as managers, casters, promoters, or volunteers
Regular eSports Enthusiast (Viewer)
 These are the viewers who regularly watch amateur and pro competitions.
 ~27% worldwide, 40% locally
 Demographic are high school students to young adult professionals
 Frequent computer shop visitors
 Low to average income
 Regular watchers are majority dominated by the males
 Majority would watch from the streams at home and would rarely drop by
live games provided the access is within reasonable reach
 22% of this females who watch livestream are in this category and enjoys
watching matches from the comforts of their home
Occasional eSports Hobbyist (Viewer)
 These are the viewers who occasionally watch amateur and pro
competitions. Sometimes even chancing upon the game by accident.
 57% worldwide, 28% locally
 May not even players of the game itself but watches for fun/entertainment
 Has more male than female but the bulk of female fanbase will be in this
category (58% male, 27% > 35 years old)

 The remaining 30% of the females who watch livestream are here
watching for entertainment
 Only watches the majors and not really keeping up with the schedule
 Usually has friends who are Regular Enthusiasts to keep them updated to
the latest trends and happenings in the eSports scene
6.0 Emerging Technology and Products
6.1 Existing and Emerging Technology
Technology is really fast-paced for eSports. There are a lot of tools and platforms
out there to help make the eSports ecosystem viable and sustainable in the long
run. Organizers make use of better programs to run better tournaments,
broadcasters have come to the point where they can match or even surpass the
quality of the more recognized TV format since technical expertise is valuable
when presenting content, and finally competitive teams always innovate
themselves when it comes to tracking their own statistics to always come out on
top in world championships. This sector study will focus on eSports
Livestreaming content and distribution.
Twitch had long been a platform known for allowing players to livestream their
video gameplay and viewers can watch and chat in real time with each other,
with the option to rebroadcast content.
Due to the influx of eSports enthusiasts and hobbyist, YouTube recently
launched its gaming-specific channel called “YouTube Gaming” this summer of
2015 to strengthen its user base. Along with a strong content stream and deep
pockets available at their disposal, more and more users are migrating to the
better technology and user-friendly service that YouTube Gaming offers
compared to Twitch.
With regards to technology used by local companies to do live streaming using
their own content, they would usually need a switcher. The best switcher to use
is called Tricaster, worth approximately 3 million Philippine Peso (PHP). So far
Mineski’s rival, TNC (TheNet.com) cannot yet afford one. The only one so far to
have this rig is Garena who handles Riot’s League of Legends tournaments.
Similarly to work hand in hand with Twitch, XSplit Broadcaster is a
livestreaming application currently under development. Livestreaming technology
that works well with games is still something that needs to be developed. To
date, XSplit technologies are in version 2, it does not have the sophistication
needed to fully showcase the gameplay content to its potential.
Nevertheless, the more known and established game live streaming content
provider in Twitch are doing their best to hold on to their throne and will not let
YouTube Gaming easily topple them down.

6.2 Products
The main product in this industry is the eSports content it delivers. Event
franchise are now picking up to host gaming tournaments such as ESGS(e-
Sports and Gaming Summit) or partner up with multiple content provider such as
computer shops. These computer game shops such as Mineski and TNC have
their own local eSports team and organize a tournament to get their names out.
In line with that, income generation will come from a more established scene
which can provide merchandise or franchise during the tournaments, box-office
tickets, and pay-per-view.
7.0 Opportunities and Threats
7.1 Opportunities
Creation of a National Governing Body for eSports
The eSports industry in the Philippines has now gained support from the National
Government. This has been proven by the creation of The Philippine eSports
Associaiton (PeSPA) on September 2, 2015. The event was officiated by Senator
Paolo Benigno “Bam” Aquino.
PeSPA will serve as the the official governing body of eSports in the country
much like the Korean eSports Association (KeSPA) in South Korea. KeSPA
along with the Korean government supports the eSports scene in their country,
from amateur leagues to professional tournaments.
Patterned with the structure of KesPA, PeSPA shall coordinate with game
developers and handle the rights of professional players in the country. PeSPA
should also create a unified calendar of events to avoid schedule conflicts in
future eSports events, protect players and manage conflicts by creating a quasi-
E-sports court of law. The E-Sports court of law aims to make eSports in the
Philippines a more established industry. It will likewise help avoid exploitation of
players and solve complications through due process.
Having a National governing body will allow the whole local eSports community
to have more structured initiatives towards the promotion of digital sports to a
larger audience in the country.
eSports as a Key Marketing Vehicle and Revenue Driver
Gaming in the Philippines is promising but has yet to reach the business activity
of countries like South Korea where gaming is treated not just a promotion
platform or revenue stream for brands but a marketing strategy in itself. In North
America, for instance, corporate sponsorships total at $111 million. (Superdata,
2015).

eSports has truly opened more diverse opportunities when it comes to brand
marketing. Products such as Red Bull and Coca-Cola are now hosting their own
white label tournaments and leagues all over the globe. In turn, these companies
are now opening their own Esports Divisions within their offices so they can
understand the industry better.
In the Philippines, more and more brands are also using the popularity of eSports
events to advertise their products. Advertisements are not limited to tech-related
products and companies such as Samsung, MSI and Smart Communications but
also attracted companies in the food industry like Nissin and sports apparel
manufacturer, World Balance.
eSports casting can drive revenue by offering/allowing companies to advertise
their brands during livecasts and by attracting companies to sponsor live events
like the abovementioned brands.
eSports on National TV
TV5 announced in November 9, 2015 the start of their long-term investment into
the Philippine eSports industry by partnering with the most decorated eSports
organization in the country- Mineski-Dota. The Mineski Organization has been a
huge part of Philippine's Dota 2 history. It managed to build its own empire and
have become one of the most recognized team names in South East Asia.
Aside from supporting Mineski-Dota’s tournament campaigns, The network also
expressed its intentions to cover eSports events. As an initial move towards
broadcasting eSports, TV5 provided a televised broadcast of the League of
Legends Season 5 World Finals in October 2015 - the first fully-televised eSports
championship event in the Philippines.
This partnership between Mineski-Dota and TV5 is a good opportunity to reach
more viewers including non-eSports enthusiasts. With TV5 launching their
gaming-focused media platform, Good Game Network, Mineski Pro-Gaming
League (MPGL) may soon reach audiences both online and those sitting in front
of their television sets.
PesPA Chairperson Joebert Yu has also expressed his support on this
partnership. Yu is positive that TV5’s confidence to work with Mineski as well as
the network’s willingness to partner with other eSports organization will bring
more opportunities to those involved in the industry.
News Companies Venturing into eSports Casting
Inquirer- one of the leading news print companies in the Philippines now has a
page dedicated to posting updates on the local esports industry and to streaming
and covering eSports events.
Rappler has also engaged into live streaming of eSports events. The social
news network uses live video streaming app for mobile phones to capture and

share video broadcasts which now includes eSports tournaments. Rappler also
entered into organizing eSports competitions in 2015 . They brought in teams
from South East Asia to compete on the Rappler Gaming League First DoTA 2
tournament.
News companies can help popularize the industry because they have more
followers and have better capacity to fund and organize eSports competitions.
Increased Mobility - More Viewers Online
As seen in the previous chapters, statistics would prove that more and more
people are utilizing the internet to express multiple interests. Growing interests
include watching eSports related contents. Fans access these contents via their
mobile phones and in most case, using mobile apps. In the United States alone,
seven out of ten fans watch eSports on-the-go, preferring YouTube Gaming.
In the Philippines, there is greater potential to increase viewership and the
eSports fan base by attracting the growing number of smartphone users and
mobile data subscribers.
Young and Hyper-engaged Population
Having 28 million Filipino people from ages 15-29 really opens a bigger
opportunity for a new industry such as eSports to grow in the Philippines. These
young people which we refer to as millennials are said to be the generation that
is shaped by technology. They are believed to be more exposed to technology as
compared to other generations.
Filipino millennials are hyper-engaged and tend to stay connected to social
media longer. Young people love to stay connected. Hyper connected Filipinos
spend much time accessing social media websites and follow multiple interests.
You would expect them to actively comment, share and participate on online
trending news and activities.Tapping this market can be the best way for the
eSports sector to grow.
7.2 Threats
Lack of Policies to Support eSports
There are policies in Congress that are essential for the growth of technology
related industries including eSports in the country still pending to be passed and
implemented. Two of which are the Bilis Konek Act of 2014 and the Free Public
Wifi Act of 2015. The Bilis Konek Act will require all Internet Service Providers
(ISPs) in the country to deliver better internet speed. The Free Public Wifi Act on
the other hand aims to provide free wifi access in public areas.

The Philippines, given its current economic state may not be able to provide as
much support to the game industry as shown by experienced economies who
have already institutionalized eSports like Korea, but developing and
implementing regulations to allow tech-related industries to flourish should be
one of the country's top priorities in the next few years.
Enactment of Policies/ Regulations against eSports
Local Regulation Against DOTA- Barangay officers of Salawag, Dasmariñas
City in Cavite approved a resolution restricting all internet cafés from including
DotA, the hugely popular online game in their services.
The passage of this local ordinance would mean that none of the 75 computer
shops in the barangay will offer DotA games to any of their residents and new
customers. The Barangay Chairman believed that the village council had to use
its law-making power to regulate all internet cafés within its jurisdiction and had
to require them to take down the DotA program from their servers.
House Bill 4947, also known as Video Game and Outdoor Media Regulation
Act - A bill that would extend the powers of the Movie and Television Review and
Classification Board (MTRCB) to rate video games in terms of the age of their
audience.
Proposed by Valenzuela congressman Sherwin Gatchalian, House Bill 4947, The
bill would allow the MTRCB to classify video games based on age-
appropriateness. The congressman filed the bill in relation to the banning of DotA
in Barangay Salawag, Dasmariñas, Cavite.
As a member of the house committee on trade industry, Gatchalian said that the
MTRCB is lagging behind other media regulators abroad, who already included
video games in their monitoring list since the late 1990s. The congressman also
claimed that the MTRCB should update and improve its regulations since the
board was established before the advent of video games.
Under HB4749, five video games experts is recommended be added to the
current 30 members of MTRCB to execute the extended functions allowed by the
bill.
The experts would be tasked to classify video games as “Adults only”, “Parental
guidance recommended”, “ Not for public viewing”, and ”For general patronage”
similar to the functions of the other MTRCB experts focused on the movie and
television industry.

Perception Towards eSports
Gaming has always been attached to negative things like addiction, violence and
that it destroys the students’ academic priorities.
The general idea that “Gaming is a bad influence” affected how people in the
Philippines respond to professional gaming. It is also perceived that earning
money out of something that’s bad is something you should not be proud of. The
negative points of views on eSports were not just about the players becoming
violent but also about learning how to trash talk other players and also partaking
in gambling.
In fact, any competitive activity could turn into something violent and bad without
regulation, for example two people punching each other in the street is seen to
be something bad but with proper regulations, a ring, a huge crowd, a pair of
gloves, a referee and an arena is called boxing and is considered a Sport and is
celebrated by millions of people the Philippines.
As seen in televised professional sports competitions, violence could really
happen. It is evident in basketball, soccer or any other sports without proper
guidance. Even if there were set rules known to players, there were still
uncontrollable circumstances that leads to violence.
The negative perceptions towards eSports would continue to be a challenge to
the industry and changing the judgments and beliefs of the general public
towards eSports would be very complicated tasks for those who envision to
further expand eSports viewership.
8.0 Recommendations
8.1 Push for the Passage of Government Policies Related to eSports
The implementation of government policies and laws that were favorable to
eSports like the pending policies such as the Bilis Konek Act of 2014 and the
Free Public Wifi Act of 2015 would significantly help the industry to flourish.
These policies plus a strong push towards having government subsidized new
technologies, especially those involved with the Internet, had become
fundamental basis for the growth of the eSports industry in Korea. The Korean
government had also explicitly endeavored to make Korean technology-driven
businesses the cornerstone of its national market.
An important step in this development was the enactment of the “Long-term
Promotion Plan of the Game Industry” in 2004, with the goal of increasing
Korea’s market size in the sector to $10 billion, and employing 100,000 people.
The Korean government spends over $100 million annually to promote and
develop the gaming industry.

Korea’s promotion strategy may seem too ambitious for the Philippines but the
abovementioned policies made us realize how much government support is
needed in order for a budding industry to grow.
Not as ambitious, but PeSPA’s initiatives should at least include pushing for the
passage of the abovementioned policies. Implementing both will allow more
content to be distributed in the country and more access points for Filipinos.
8.2 More Collaboration with the Government
PeSPA is expected to collaborate with the national government to further develop
eSports in the country. With this newly-formed alliance, the PeSPA members and
the government are expected to work together to create an enabling environment
for those who are involved in the eSports industry.
Sen. Bam Aquino has been actively supporting and pioneering development
programs not just for MSME’s but also for burgeoning industries like eSports in
the country. Having the senator as a champion in government to push forward
eSports related reforms, policies and initiatives is highly substantial to the growth
of the industry in the Philippines.
PeSPA should also tap other government agencies like the Philippine Sports
Commission (PSC) to be recognized as a formal sport. PSC has set rules for
national players which PeSPA can adopt to develop better training guide for
eSports athletes. The Commission also gives financial support (although very
minimal) to the national players competing here and abroad.
National institutions like PeSPA, PSC, and PeSO must have a unified approach
to promote “fair gaming,” in the same way that had been done for conventional
sports. These institutions should also vouch for the credibility of eSport by
likening it to other established sports, and should argue that eSports could be a
major component of the future of public entertainment to get recognized.
8.3 Changing Negative Perceptions towards eSports
eSports is an inevitable innovation that the older generation may not understand
but the youth will keep on playing it given that we are in the digital era. It is one of
the most innovative and most cost efficient way for a regular kid to enjoy a time
with their friends and also get a chance to make friends.
Sometimes parents think that the kids who are in front of computers are just
playing with computers, but no, they are playing against actual people who are
beside them inside a computer cafe enjoying the camaraderie, laughing, joking
and playing with 9 other players in the game. This is the modern chess of the
new generation, and as adults we have to accept the fact that it is here to stay.

To reduce negative views on eSports, there should be proper guidance,
regulated tournaments and proper activities for players and for the viewers. The
local eSports governing body should also look at creating a code of ethics for
players to follow. The code should not only encourage sportsmanship but also
promote respect among players.
Traditional sports have always been regarded as a tool to avoid worse things like
drugs, crime and such.This is also possible with eSports. PeSPA together with
numerous organizers in the Philippines should host and develop eSports events
that would promote responsible gaming, time management and sportsmanship.
8.4 Partnership with Major Media Platforms to Reach Mass Market
Gaming and eSports have rapidly grown into a multi-million industry. Global e-
sports is now valued at $ 612 million, with an audience of 134 million.
(Superdata, 2015)
TV5 is attempting to seize the opportunity by being a pioneer in offering eSports
content in National TV. There may be limited data in the Philippines, but
Superdata also revealed that in 2015, Asia is the leading the e-sports market with
$374 million, or 61% of the total global share. Moreover, TV5 believes that there
will be an increase both in popularity and business interest in the eSports
industry in the Philippines starting 2016.
GG Network- the name of the segment, which stands for “Good Game” – a polite
remark among gamers for a good fight, has already started scouting content
creators for both video and stories. It envisions to operate more as a platform
that will not own the content but will earn indirectly, giving Filipino creators the
freedom they deserve.
Moreover, TV5’s partnership with Mineski is a great start since the organization
has already gained popularity among Filipino DotA players. The network expects
Mineski’s followers to be the future viewers of their upcoming eSports contents.
8.5 Positioning as an Official Sport
The internet has allowed gamers from all over the globe to compete with each
other. What started out as a one or two player game can now become multi-
player tournaments.
Videogames slowly evolved to include a competitive ingredient. Advancements in
the online infrastructure worldwide has Also allowed players from different parts
of the world to come together and compete.
The abovementioned developments in eSports are some of the reason why
eSports should be among the other sports. Esports tests the player’s’ wits,
teamwork and their indomitable will to victory. It affects not just their mental well-

being but also their physical well-being, for a sound brain can only do so much in
competitive eSports.
There are those that still find it difficult to accept eSport as a concept, let alone
consider it as a sport. But, researchers and gaming enthusiasts are finding a way
to let others see a clearer connection between eSports and traditional sports.
Organizations like Korean eSports Association (KeSPA) was successful in
working with the Korean government in championing eSports as a legitimate
athletic activity. Together, they have provided a set of rules that govern the whole
of eSports in Korea, from the player’s rights and health, to the regulations of
tournaments being held. In line with this, the International eSports Federation
(IeSF) aims to do the same thing worldwide as it espouses the addition of
competitive videogames as Olympic-level events.
If eSports will be considered as a sport, it becomes easier for it to achieve
stability and governmental recognition. This is important as an emerging industry,
there are many issues that arise from the informality of the industry that are
hampering its overall growth.
Since eSports, or any virtual-related subject, is still finding its way into the law
there is no proper jurisprudence that can cover important industry issues.
eSports needs to experience the same legal benefits as sports such as the grant
of an Athlete’s Visa for players competing in the international scene much like the
Olympics or the World Cup.
Visa rejection has been one of the main problems of professional eSports
players. Taking for example, Korean-based team Rave who experienced
difficulties in securing their visas for the Dota MLG Pro League LAN Finals and
was even stopped by the Philippine Bureau of Immigration from leaving the
Philippines while on their way back to Korea for training.
eSports needs a strong foundation that can supervise its changes and
developments. It would be safe to say that it is easier to work on the acceptance
of eSports as a sport rather than to work on the acceptance of eSports as
eSports.
More so, a lot of process also needs to be done to change legislation and it takes
years of discussions and paperwork in order for something to be fully
acknowledged by the Philippine law.
In 2013, The United States announced their acceptance of professional gamers
as athletes. This allowed pro gamers to acquire an Athlete’s Visa. This signified
progress towards getting recognized as a sport. The question now is when
other countries including the Philippines would follow suit.

Countries like Korea and the United States have already shown different
strategies on how the eSports industry can get officially recognized and how
players can be supported. Some maybe too ambitious but there are some
strategies which are replicable. It is now up to the institutions in the Philippines
which ones to adapt and prioritize.
8.6 Continue to work together to promote the industry
Major League Gaming, DreamHack, and the Electronic Sports League have
started collaboration back in 2012 to unify and align DreamHack, ESL and
MLG’s eSports activities on a global basis to further competitive activity, benefit
players and spectators, alleviate the taxing event schedule, eliminate confusion
about global standings and help nurture the development of North American and
European players.
In addition to the creation of a master tournament calendar to eliminate conflicts
(scheduling is a major issue in the eSports world especially for StarCraft
competitions back in 2012), the partnership also lead to the development of
standardized practices across the leagues.
This coopetition or strategic alliance between major eSports leagues paved way
to the establishment of a universal ranking system for seeding and qualification,
and a unified competition structure for the major tournaments they organized.
This also allowed the three leagues to cross-promote and utilize a shared roster
of commentators and broadcast talent.
In 2013, Sendi Mutiara Multimedia (SMM)- the pioneer local PC gaming company
in Malaysia has extended its business operations in the Philippines to further
push the budding eSports community and its stakeholders. SMM Philippines has
two focuses: the internet café owners and the gamers. The primary focus is for
the internet café owners’ benefit and profitability and to unite all internet cafés
nationwide as an organization. For the gamers, SMM will organize tournaments
and events in cooperation with the internet café owners.
The SMM Philippines Cyberslam 2014 which is a two-day non-stop action
gaming event brought together hundreds of players of different genres (namely
WC3 Dota, Dota 2, Hearthstone, Starcraft 2 and Assault Fire) and different
places in one event to compete and share appreciation for e-Sports. The success
of Cyberslam 2014 truly demonstrated how cooperation even in the local
Philippine gaming arena can contribute to the popularization of eSports.
The above successes exemplified by both international and locally organized
competition shows how cooperation between local and global eSports industry
players can be advantageous not just to them but also to the players. More of
these unified approaches and partnerships are needed to further popularize
eSports in the Philippines.

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unify-and-elevate-esports-globally

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