Interview with Razer’s global e-sports manager: The business behind sponsoring teams

Since 1999, Razer has been a strong supporter of the e-sports industry, investing money into teams, players and events, all the while growing their brand as a gaming-targeted peripheral manufacturer. We spoke with the company’s global e-sports manager Christopher Mitchell about the business behind sponsoring teams, how the growth of League of Legends is impacting the sponsorship environment, protecting the brand’s image when sponsored teams close down or disband, the status of the Academy and much more.

Razer continues to sponsor more and more e-sport teams to the point where it is far and away the leader in that category. From a business perspective, what is the viability of sponsoring so many teams? Is it all about visibility and brand recognition?

Sponsoring teams is more an expression of the DNA of our brand and less about bottom-line. We are gamers, ourselves, and our Company is grounded in principles that guide us unerringly toward the advancement of gaming performance and fun for the exclusive benefit of the gaming community. The branded value of Razer’s sponsorships in e-Sports resides in the hands and on the heads of the world’s best gamers who use our products because we’re servicing their needs successfully. Making great products that work incredibly is our aim. If it makes business sense, awesome; if not, we can still go to sleep knowing that we did the right thing by our brand and for our partners and customers.

At the end of the day, the monies we specifically allocate for e-sports is essentially an investment in the development and support of talent in the ranks and the growth of gaming as a viable pastime and aspiring profession, which ultimately feeds back in a positive way to the industry overall. Aside from the money we’re putting in, we also have a dedicated team of people spending their entire time on e-sports, which helps ensure that the front line of electronic software entertainment—e-Sports—is handled responsively and personally.

“…the monies we specifically allocate for e-sports is essentially an investment in the development and support of talent in the ranks and the growth of gaming as a viable pastime and aspiring profession…”

Nowadays, pro players command six-figure incomes, tournaments are watched by millions via online broadcast, prize purses hit the millions. That makes eSports a competition-based entertainment phenomena like traditional sports. Unique from traditional sports however, e-Sports can be played globally, transcending social and geographical boundaries, and it has a relatively infinite viewership. A kid in Russia can have a game going with someone in USA and get connected to people he would not ordinarily be able to meet without their common pastime. E-Sports is essentially a massive interactive community, which leaves it unique from traditional sports in terms of reach and participation.

While visibility and brand recognition are certainly one part of the equation, as a hardware manufacturer we also benefit uniquely from an opportunity to work with our sponsored players on prototype validation and product development. This actually plays a big part in our sponsoring. Our tournament edition keyboard, for example, has been-  for the most part – a product we developed based on feedback by the TeamLiquid StarCraft 2 team.

The significant investments in e-sports by Razer involves teams and communities with huge followings like the LoL community under Riot Games, and others like Teamliquid.net. Has it generated a positive ROI or break-even towards what has been invested already, such as a larger following towards the brand itself, or even sales figures that have improved for licensed team products (e.g.  CLG mice, Team Liquid mousepad and others)?

“With respect to e-Sports, it’s not our goal to count money going in vs. money going out. It’s a cost of doing business and we characterize it as such.”

ROI from any “marketing” expenditure is difficult to gauge. Again, with respect to e-Sports, it’s not our goal to count money going in vs. money going out. It’s a cost of doing business and we characterize it as such. From a purely product-based perspective, the e-Sports market is heavily contested and is rather small relative to other markets. Our team-branded peripherals are mostly a way to support teams that can sell these items in addition to their existing line of merchandise. We’re not making a lot of money on those, but it gives teams an additional source of income that’s not dependent on sponsorship fees, which in turn gives teams an additional business model that they can leverage to grow their brands and finances independently from sponsor and tournament considerations.

E-sports is still a relatively new industry that has been very reliant on sponsor support and funding. From the perspective of the sponsor, what does Razer feel is needed to bring e-sports forward, so the industry can be more self-sustaining in the future?

There are probably a few things, but if I had to narrow it down to one, it would be successfully bringing in non-endemic sponsors. Right now we have a few of those in the market like Red Bull, but to make e-Sports self-sustaining, non-endemic sponsors have to become the norm and teams and tournament organizers cannot rely on endemic sponsors alone. Companies like Twitch or own3d (RIP) do a lot to make that happen, as they facilitate advertising in a unified way that is closer to traditional advertising that big corporations like Ford, Procter & Gamble or Coke are used to. This allows bringing in “foreign-industry” money into e-sports to help the industry grow. The notion of “self-sustained” however might be slightly misleading, as every sport relies on sponsors and doesn’t sustain itself on ticket and merchandise sales alone.

From a marketing/business point-of-view, what specific things does Razer do to try and stay ahead of competitors like SteelSeries and Tt Esports?

I respect what both these companies do and it is my sincere hope that they’ll stay around and continue investing in e-sports. In fact, we’re more concerned that there are not enough companies that participate in the sponsorship of e-sports. As mentioned before we have a team dedicated to e-sports on our global team, supported by a regional e-sports managers in every one of our regions (Americas, Europe, China, Korea, Asia-Pacific). I believe with that we have the largest e-sports team of any sponsor in the world and it allows us to take good care of our teams and ensure that we have very good knowledge of the scene. And this deep knowledge and understanding allows us to stay close to the community, show that we’re serious about e-sports and also scout and secure talent early on.

How small of a niche is the market that companies like Razer are targeting compared to more general peripheral companies like Logitech, and how does that affect how you market and promote your products?

We have a much more focused approach than them. We’re looking at gaming and gaming only. No office use, no living room media center. It’s all about gaming. While that narrows down our target group immensely it also allows both our product development and marketing to be able more effective and efficient.

Logitech has recently announced their withdrawal of their development and marketing dollars from developing any more console peripherals and accessories. How does this affect Razer moving forward? Has developing products targeted towards console have a positive return, since the console e-sports community is actually quite big, especially in the United States?

We rarely look at other companies and their strategies – our focus is always to enhance the game experience for all gamers, regardless of console or PC, so it’s something that we’re sticking to and will continue to do as long as there is a desire for professional gaming gear for consoles.

Why has Razer decided to put more money into teams and players as opposed to e-sports events and tournaments in the past year?

We’ve partnered multiple years with the WorldCyberGames or the Intel Extreme Masters and partnered with IPL before, as well. It’s only in the last 12 months that we focused our attention more on teams, while still supporting smaller tournaments like the SoloMid Invitational, TSL 4 or the ongoing Team Liquid Legacy StarLeague. We’re always looking to sponsor both tournaments and teams as we believe both of these are integral to the long term viability of e-sports.

Are you satisfied with how the Razer Academy has been going? What kinds of things is Razer planning to do to improve the reach of the Academy brand and how much interest has there been from people that have applied?

Truth be told, no. We started off optimistic, signed a few content contributors and kicked it off. Unfortunately a lot of them didn’t come through on their obligations, which lead to us having a lot less content than we wanted. We’ve learned from it and we’re slowly building it up. We’re working on a revamp of the website itself, bringing more of our professional gamers into the Academy and have a couple of other additions like more interviews and some more live-streamed content throughout 2013. We’ve experimented with lots of things in that regard like having Heart of the Swarm showmatches, LoL ARAM cups and inverted race showmatches in 2012. Outside of the strictly educational content, we’re trying to bring some fun content with high-level teams and hopefully be able to also involve our community more (some features planned for site revamp that will make that possible).

Razer has always invested and sponsored gaming ambassadors that they worked closely with, such as people like Swifty, Athene, Soe and many other personalities. Has it been easier to decide in terms of sponsoring such ambassadors compared to pro gaming teams, since the investment and ambassador’s following are already available, and requires less from Razer to do that actively while investing at the same time?

The decision is different, but not necessarily easier. These types of personalities that are not always known for their gaming skills per se are also more likely to offend / be disliked by some gamers out there. It’s also always been important that these personalities stay true to their roots and stay authentic, so while them having a fanbase makes some things easier, it’s not the whole story.

Razer recently announced the sponsorship of KT Rolster’s League of Legends teams in January. How many resources is Razer putting into LoL teams/players now, as compared to StarCraft 2 and other e-sport titles, seeing as how big League of Legends has become?

LoL is now the strongest title in e-sports when it comes to viewers and following. Without going too much into detail, that is also reflected in our spending; however, it’s not necessarily proportional, as we still make sure to support other games like StarCraft 2, Dota 2 and CS:GO. And of course console titles like Street Fighter or the console Call of Duty. But with TPA, Azubu, KT Rolster, CLG, TSM, MYM, Mouz and our Chinese teams LGD and AG to name just the top level ones, we’re definitely heavily invested in League of Legends.

Roughly two months after announcing a partnership with Eclypsia, the organization disbanded. Other Razer-sponsored teams, like Quantic Gaming, are now defunct (editor’s note: Quantic is back after the It’s Gosu and 4Nothing merger). Things like this seem to happen somewhat often, no matter the team’s sponsors. From the sponsor’s side of things, how do you approach when something like this happens, and how it may affect your image?

These teams are two very different examples. Eclypsia was a highly polarizing team that was off to a rough start due to some mismanagement on their side. They did, however, recover from that and were doing some great things subsequently, so we brought them on for a trial period giving them a chance and some legitimacy. They didn’t make it through that trial period and so things ended early, but it’s a risk you have with every team.

“…[Quantic] had a significant amount of cash being pulled out from them and it got to a point where it wasn’t feasible for us to cover the differences and bail them out.”

Quantic was doing great and I’m still in touch with Mark (Quantic’s CEO) on at least a weekly basis. However, they had a significant amount of cash being pulled out from them and it got to a point where it wasn’t feasible for us to cover the differences and bail them out. It’s sad to see things happen like that, but it probably won’t be the last thing we’ve seen from Mark. From a sponsor side of things we try to make the best of it. We still sponsored Illusion, talked to their CoD-Team (now Complexity) and actually still helped out the LoL-team post Quantic disbanding to see that the involved players and teams wouldn’t have to suffer from that. As to how it affects our image, I can just hope that players see our efforts behind the curtain and understand that a single sponsor is not responsible for the life or death of a team.

SteelSeries recently dropped their sponsorships of big teams like Evil Geniuses and SK Gaming. When it comes time to renew or cancel a sponsorship contract with your teams/players, what analytics do you look at the most to decide to continue the contract, give them more money (which they might be asking for anyway), or drop them altogether?

Every sponsorship review starts from scratch really, although past experience with team management of course plays into how much trust to put into an organization. Outside of that, it’s a mixture of website and social media stats, fanbase engagement, reputation as a team, future plans, content creation capabilities, and of course success in tournaments and leagues. We also want to make sure we’re represented worldwide across games and genres, so there is always an unknown factor to the team that might tip the scale. Seeing sponsorships being dropped is always unfortunate to see, but sometimes budgets get cut.

When new teams approach Razer for sponsorships, especially for the ones that do not have an active management or a professional managing the team, does Razer get involved in assisting the management of a pro gaming team like how Tammy Tang was involved with Team Zenith, or does Razer let the teams handle the sponsorships by themselves (in relation to how teams without managers have approached sponsors for support)?

While Tammy is somewhat of an exceptional case, we do spend a lot of time on coaching upcoming teams and team managers on their responsibilities and the do’s and don’ts. In fact, we have a team manager portal for all teams we sign, where they can find examples of how to provide value for a sponsor that we’ve kicked off a few months ago and are constantly working on. We’ll also be providing good sponsorship application examples there and potentially looking at providing player contract templates that the teams can use. If it’s well received, we might even make this accessible to all teams regardless of whether they are partnered with us or not.

Razer has developed products that are also catered to the console community. Has Razer looked into actively sponsoring teams that are taking part in console leagues and tournaments like MLG?

As a matter of fact, we do. We’ve already started sponsoring some teams like Prophecy in the UK, Fighting Game Players like Latif, Fuudo, Itazan, The Fighters Alliance and Empire Arcadia. We did sponsor the Quantic CoD-Team previously and Frenetic Array down in Australia. We sponsor the Halo and CoD Team of Pulse e-Sports. Just recently we signed United Gaming (former CSC) and were in discussion with two more teams that disbanded during the negotiation phase. We’re still familiarizing ourselves with the scene and we also just hired a new team manager to our global team that will bring along his expertise on the US console scene, so we should see some more stuff happening there soon, too.

The Razer arcade stick is in beta phase. How has testing been going, what kind of feedback has it been getting, and when can we expect it to launch?

Testing went really well. We’ve gotten a lot of feedback and it’s been overwhelmingly good. The public beta also gave us the chance to test the product in tournament play and it’s proven to be worthy. Even some non-sponsored pro players like Poongko started playing with it and are psyched about the stick. Launch date is unfortunately not something I can disclose.

Razer has recently invested into building both casual consumer and competitive consumer technologies like the Razer Comms and the Synapse cloud solution, the software development part of Razer which is very new. Is it part of the plan to integrate this, as how Razer develop not only just hardware, but also software for the gaming communities it works with?

Synapse was essentially upgrading from our previous driver solution and it was a massive project to undertake but aimed to improve the usability and experience of our products further. Comms is a slightly different animal, as it kicked off as a fun-project and we then realized that there are a lot of things that could be improved over standard messenger and VOIP solutions. Razer Comms was born. We’re working on some really awesome features for that, so I’m personally really looking forward to making it available to every gamer out there. As for our future plans, you’ll have to stay tuned.

The new Razer Edge gaming tablet won CNET best in show at CES 2013. When having a presence at a show like CES, where the audience is very tech enthusiast but broad/general, how does Razer go about breaking through the niche it is in to get the word out to more people, and does Razer even make it a point at all to promote e-sports? Or is the goal at a show like that completely different?

That really comes down to which products we launch at CES, which in turn is dependent on our product roadmap. Some of our products are very e-sports driven like the BlackWidow Tournament Edition. Often times we launch e-sports driven products at events like GamesCom or E3 where a lot more consumers are on-site, whereas CES tends to be the more innovative products. Sometimes innovation and e-sports meet, as we’ve seen with the Razer Onza Xbox Controller a couple years ago. For the more e-sports driven products, however, the changes and innovations are often times very subtle as we’re mostly fine-tuning our true and tested products further to the liking of gamers around the world, so other shows are usually more suitable for e-sports driven products.