As viewership for esports grows, so too does the desire for organizations to better tap into the increasing number of fans, as they look to solidify their revenue streams and become sustainable businesses away from venture capital. TSM FTX, a North American organization, are one of few companies at the forefront of the ‘global expansion’ wave the industry is witnessing.
It seems like every week an organization cites their ambitions for a “global expansion” as a means of cementing a partnership, entering an additional game, or making a new hire. Esports is pretty well-suited to being a global sport after all, with remote work not being out of the ordinary, esports leagues and initiatives cropping up in every continent, and tournament viewership being available to spectate on a small selection of well-established streaming platforms.
While some esports companies are looking locally to strengthen their relationship with their fans — just look at the city-based approach of both the Call of Duty League and Overwatch League — there are some orgs that are investing significantly to accommodate prospective fans outside of their home nation, casting a wider net in hopes of a deeper return on investment in the future.
One of those orgs that are providing localized experiences for fans but on an international basis are TSM, now known as TSM FTX through a $210m 10-year naming sponsorship with the crypto exchange, but they’re being sensible in approach. Dexerto spoke with Walter Wang, the org’s vice president of operations, to gain insight on their approach to their global strategy, particularly in Japan.
TSM FTX take on Japan
TSM FTX’s Japanese-speaking Twitter account was launched on August 10, 2021, with the goal of amassing 10,000 followers within a month. It gained 27,000 followers in 12 hours. Less than two months later and it’s close to eclipsing 50,000, executing a strategy led by global head of social and community Duncan Cox.
What’s impressive is that the org hasn’t signed any creators or players within this timeframe. Instead, this following comprises of new and existing Japanese-speaking fans of a team that’s not (yet) competing in any of their leagues or utilizing Japanese players.
“The thesis is that esports is the most global sport in the world,” Wang told Dexerto. “We have TSM fans all over the world and we really want to reach them. We’ve taken initiative to expand globally over the past year, setting up an office in Shanghai and picking up teams in Brazil and India. We want to make sure that we have a strong social presence that can speak the language that is localized to that country. We’ve tried to expand into basically every region — it’s quite an upfront investment cost, I must say, because it’s hard to monetize globally.
“Our expansion into Japan was very interesting because we knew from the data that Apex Legends is really popular there. We have one of the most popular Apex teams in the world and we wanted to be able to reach out to those Japanese fans, even the players wanted to expand their brands there too.”
Why Japan? Why specifically translate and tailor Apex Legends content for a Japanese audience? The Asian country is the second-largest market for EA and Respawn’s battle royale title — boosted by its launch on Nintendo Switch, as well as the popularity of VTubers. Seriously.
Apex Legends’ status in Japan has been this way for quite some time now. It was the most-watched game in Japan back in October 2020 and their viewership is nothing to scoff at. According to Statista, an estimate of 6.9m people made up the Japanese esports audience in 2020, and it’s projected to grow in excess of 14.6 viewers by 2024.
TSM FTX, as well as fellow orgs like Fnatic, are moving into emerging markets like Japan and India now, as opposed to trying to get in when they’re more developed in the years to come, not only to enjoy the relatively cheap operational costs (especially when compared to North America) but to be well-established as major players in the country as more eyeballs and wallets flock to the industry.
Wanted to hit 10k within a month of launching @TSM_JP. Kinda shocked that we hit 30k in less than 20 hours with no team, streamers, or influencer announcement.
It’s a lot of fun creating region specific communities. https://t.co/t1TogyFK47
— DUNC (@followdunc) August 10, 2021
“If you take a look at our demographic data on our native social platforms, you can see the regions,” Wang explained. “We experimented, like seeing if Apex Legends videos with Japanese subtitles would receive more views. It worked, so we allocated the resources to hire somebody dedicated to Japanese socials.”
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It’s not as simple as picking a location on a map and then simply launching social channels. Each region, each country, even each community has its own nuances; there are cultural and societal norms that vary wildly when you look at two different markets and that needs to be considered. Background research and finding the right personnel for the job is imperative but no light tasks.
Sourcing supporting staff is one thing, but finding the right players to combine and generate success is a mysterious, ever-changing formula that orgs need to work towards understanding too. Expanding scope to monitor Japan closely should open TSM FTX up to a whole new pool of players but careful consideration needs to be employed throughout the process.
“You have to be able to localize yourself, so finding the right people has been the most interesting part,” Wang told Dexerto. “There’s a lot of internet lingo and social trends in specific regions so hiring people that understand esports and TSM and can speak both languages is always a challenge. Operating a global company poses its own challenges from HR to timezones, it’s harder logistically.
“We source talent globally but it depends on the game. Mechanical skill trumps teamplay in certain games but in a game like League of Legends, there’s so much communication and teamplay involved that language barriers can be a big thing. Looking into the future, every esports team will be sourcing talent globally and maybe developing a language program to help with communication.”
Local commercialization
“We will have specific teams in different regions — like Free Fire in Brazil — where we will want specific Brazilian partners for that team. CPMs are much lower so the dollar values may not make sense for our League of Legends team but could with our Brazilian team. That’s potentially the biggest challenge: what do we do with these fans? How do we get partners and value from those fans? Doing global sales in certain regions is very difficult.”
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TSM FTX were the most valuable esports organization of 2020, if Forbes are to be believed at least, and a lot of their revenue is sourced from sponsorship — as is the norm in the industry. This has never been more evident when you consider their record-breaking $210m deal with FTX, but these agreements vary to drastic degrees based on the markets they target.
Organically and effectively engaging the Japanese market could work wonders for the organization in regards to accessing even more advertising dollars, as local companies could well view them as a viable means of promoting their product or service. Wang already explained that a lot of investment has gone into TSM FTX’s forays into Brazil, India, and Japan, so offsetting this spend with localized sponsorships (and eventually aiming for profit) seems a sensible goal to work towards.
“There are certain partners are global and some are U.S. only,” he explained. “[The deal with] FTX, for example, is global because they serve the U.S. and the rest of the world. The same with Logitech. Though certain deals like GEICO are North American as that’s where they offer their services.”
Franchising in the future
Considering TSM FTX are casting a wide a net as possible when it comes to fan acquisition and, they hope, customer acquisition, you shouldn’t expect to see them in any geolocated league in the near future. The Los Angeles TSM will not appear in Call of Duty or Overwatch as, Wang believes, it’s not sustainable for the business in the current climate.
“Short-term, I don’t think localization is in the cards for us,” he said. “Traditional sports make a lot of money from localization and that’s the majority of revenue for many major teams out there, but it’s really a real estate business because they’re building stadiums. Imagine if TSM tried to compete in this regard, especially in say Los Angeles. It would cost tens of millions of dollars.
“It makes sense in other regions. Look at LPL teams building stadiums in China. For us, for now, we won’t commit to any localization plays unless it makes complete sense.”
It’s early days when it comes to TSM FTX truly becoming a global phenomenon — where they can cash in on a number of markets through product sales, advertising brand partners, and event-related sales — but they’re clearly putting their money where their mouth is when it comes to esports’ new buzzing phrase: the global expansion.
