EPISODE 4
TRANSCRIPT

Episode Four

eSports in Indonesia:
A Conversation with Ivan Yeo and
Hartman Harris of EVOS eSports

IndoTekno Podcast, 16 June 2020

(past transcripts)

 

ALAN  0:10  
Welcome back everyone to our fourth instalment of Indo Tekno. Indo Tekno is a weekly podcast in which we invite on guests to discuss all matters Indonesia and technology-related. The podcast will be hosted in English with a subsequent transcript made available in Bahasa Indonesia. Kami akan memberikan transkrip podcast Bahasa Indonesia di situs web kami. My name is Alan Hellawell. I'm the host of Indo Tekno. I'm also the founder of Gizmo Advisors and serve as venture partner at Alpha JWC Ventures. Having last week discussed weighty issues such as the state of Indonesia's educational sector, and the promise of technology in advancing the country's prospects with Najelaa Shihab of SekolahMu, this week it's literally all fun and games. Today we'd like to explore Indonesia's eSports industry...and who would be better positioned to address this opportunity than one of the first and most diversified eSports platforms, EVOS eSports. I'm pleased to have on Ivan Yeo and Hartman Harris, cofounders of EVOS eSports. First gentlemen, congratulations on having secured the largest number of eSports championships in the Southeast Asian region last year. It clearly involved a lot of blood, sweat, tears and arthritic thumbs I suppose. So, gents, let's take it from the top. Kindly share with us your respective backgrounds, maybe starting with you, Ivan. 

IVAN, EVOS  1:32  
Before starting though with eSports, I was in the investments industry and right out of college I was working for ABN and Barclays, and I guess after a while, went to work for a family office where I spearheaded projects in Japan and Cambodia. While doing those, the opportunity came up with my high school friends. Since youth we always had this interest for eSports, so we came together and started EVOS as a side hobby, or side hustle. And I guess it took us to where we are today. One year in I saw an attraction and decided to work on it full time, and I have never looked back.

ALAN  2:15  
Fantastic. Hartman, what about yourself?

HARTMAN, EVOS  2:18  
During my era, a lot of my peers were actually going to school in Singapore. So I grew up in Singapore, all throughout until the age of 16. And then I went to college and spent some time there after college, working in the finance industry as well. And then afterwards, coming back, I was working in the family business, mainly in manufacturing. And then moving on, like Ivan said, one day, I got a call from one of our other co founders, Mike. He suggested let's start a startup together. At the time. I think the whole notion of startups, and investing, was very foreign to me, because I wasn't really aware or in tune with the VC space. And then from there, we grew. I think a lot of where the DNA of the company stems from how we are not very "startup-y". 

ALAN  3:13  
Can you guys profile your major business lines for us?

HARTMAN, EVOS  3:16  
We started off with EVOS as the main eSports arm, the organisation, the team, the professional eSports side. And then we also have Whim, which deals mainly in talent management. We do a lot of content formats as well. So where we're headed essentially is eSports, plus a more holistic approach to the whole eSports entertainment business, instead of just focusing on the teams.

ALAN  3:43  
Gotcha. So, from what you're describing, eSports, if successfully implemented, is more of an amalgam of activities; whether it's an agency business or cultivating teams. I assume you also have a merchandise business. There's quite a bit of horizontality to it. Is that correct?

HARTMAN, EVOS  3:59  
Yes. The big part of us is not thinking of the industry as, which sorts of business lines that we want to enter. I think mainly, it's more of what sorts of different touch points we can engage with our fan base. So as you mentioned, we have merchandise. And with merchandising, we thought of it as more of a line of clothing that people wear on a day-to-day basis, instead of something that you would only wear on game days. So it was more built as the street wear sort of fashion, "hypebeast" type of feel. And again, with all our content, we will try to take eSports and gaming, and all of its goodness, to the next level, which is the eSports plus the content side; what people want to watch.

ALAN  4:45  
Ivan, anything you want to add to that?

IVAN, EVOS  4:47  
Essentially we are an eSports entertainment company. We're not just in eSports, but leveraging off eSports' large audience base, and exploring other forms of content in our region as well.

ALAN  5:00  
Tell us about your gaming houses. What locations do you have? And, in particular, what's happened to them in the COVID-19 era?

IVAN, EVOS  5:09  
Most of our players still stay in the gaming house. So not too much impact with regards to existing team., Only small issues here and there with players flying in from their hometowns. So unfortunately, during the Ramadan period, most of them weren't able to go back home for the safety of their families and for themselves. But I mean, gaming is still a digital activity. So it doesn't really impact training and everything. Instead, with Discord, the games are all online, so it's still fine.

ALAN  5:41  
Could one of you profile one of your more prominent team players? Give us more interesting colour on him or her.

IVAN, EVOS  5:48  
One of the fall more prominent ones and saw Dyland PROS. He has right now I think 9 million subscribers, and he's very engaged with the Free Fire community, which I'm sure you are very familiar with. That's one of our most popular players in Indonesia.

ALAN  6:05  
And why do people follow him? Is it because of his record? Is it because of his flair? What do you think drives the fandom around him?

IVAN, EVOS  6:13  
He's one of our largest content creators. He creates content around Free Fire games and other gaming content. People generally watch him for his entertainment factor: comedy, drama, that kind of stuff. We have two different kinds of influencer. One of them is the content creator, like Dyland PROS. He's your classic Youtuber, who creates content, and builds his fan base based on the content he creates. On the other end of the spectrum, we have influencers like Wan. He's a professional eSports player. People watch him because he's very good at the game. On top of that, he's also very entertaining to watch. There are two different kinds of influencer for different kinds of audience base.

ALAN  7:01  
Interesting. So in the eSports era, there's a broadening in the definition of influencer. In traditional sports, in my mind, influencers would be the athletes themselves. But in the online era, it's not just the athletes. It's other personalities that serve to enhance content, as you say, and build community. Is that correct?

IVAN, EVOS  7:22  
Yeah, that's right. I think in sports, it's hard for a professional athlete to transition to a YouTuber. It's far off the spectrum, right? But in eSports, everything is digital. The rise of game streaming and gaming content allows most of the professional players to also be YouTubers, as a profession.

ALAN  7:47  
Makes sense. You mentioned that you work with top developers, such as Tencent, Garena and Moonton. What's the nature of your collaboration?

HARTMAN, EVOS  7:56  
For the most part, because we're in their ecosystem, we compete in their leagues. So there's definitely a lot of back-and-forth, a lot of ideas coming from us, coming from them. We are team owners and they are publishers, developers or league owners. So definitely, from that standpoint, we are also developing their next generation of, I would say, influencers, their "poster boy", for their next game. So I think that is very important, because a lot of the times, for developers or publishers, one of the biggest fears is no one talking about their games. Having a constant flow of content from influencers or from other mainstream stars coming in to play Mobile Legends or Free Fire, is good. Web had Joe Taslim, one of the hottest Indonesian stars, who is also a Hollywood star (he played in a lot of movies as well). So those kinds of interactions are very important for game developers, for their brand, for their league. It ups their brand equity, right. So it It's not seen as a lame game.

ALAN  9:02  
What are the juiciest parts of the sport revenue pie in your mind?

IVAN, EVOS  9:07  
I would think that there is one that is starting to come up, or actually two: one event is media rights sharing, sharing from the sale or exclusive streaming deals, or sales to TV mainstream stations. I think that's a very interesting revenue that's coming up. Especially, right now during the Coronavirus, there is not much sports IP out there, that's actually having its links in operation. So a lot of the terrestrial TV is interested in eSports as a way to fill up the sports slots. The second one is, of course, is in-game items. So, as the industry develops more and more, developers are also opening up their platforms to "Team IP's"  to create and sell items within the game itself. And that's looking like a potentially big opportunity and new revenue stream for teams.

ALAN  10:01  
Now, if I'm not mistaken, EVOS has a large membership base. Are you building a subscription business? And what do you think the opportunity is their longer term?

HARTMAN, EVOS  10:10  
For our EVOS membership, the initial thought or idea was to give access to a lot of fans, because we work with a lot of partners as well. What we're trying to push is to give a more inclusive ecosystem whereby they can always have more value when they buy a certain thing from our partner sponsors or whatever. I think another part is also providing access into our "behind-the-scenes" or "backstage", where a lot of things can't be seen under normal circumstances. Another part is also, how can we create an NBA-like or EPL-like atmosphere when they come to the stadium and watch us play? We want to create that sort of fandom. I think we proved that in the last season, two seasons ago. When we won Indoor Stadium, it was around 10,000 people in the stadium, it was another 10,000 outside watching in the parking lot, and everyone was cheering with the drums and everything. So, we went up to that level, because at the end of the day, that's what we are. We are storytellers, we are people who are trying to tell a story for people who are "Zero-to-Hero."

IVAN, EVOS  11:23  
Looking at eSports our thought process is: how can we create a membership programme without having a stadium, but still benefit our stakeholders; being the fans, the brands and of course the players themselves? So I guess there's a lot of room for innovation in the eSports space. No one has really established the right "go-to" model for this industry. And our approach is to test and experiment new ways to enhance the experience of our stakeholders. So the membership initiative, I wouldn't say that right now it can bring in subscription revenue. But it's something that were working towards too. We're exploring different value propositions for our stakeholders, and eventually building a product that hopefully could bring in a subscription revenue in that we so desire.

ALAN  12:19  
Guys, from the outside, it would seem as though eSports has been massively impacted by the pandemic. For instance, nearly all public events have been called off. A) What parts of eSports have indeed been hurt badly, B) Which parts has COVID-19 actually benefited and, C) What new areas have you guys entered or begun to examine as a result of the pandemic.

IVAN, EVOS  12:42  
As with any crisis that has happened in the last decade, everything has its own drawbacks, and has also created its own opportunity. So there's two sides of the coin here. On one side, you're losing out on offline events. Your sponsorship products or advertising products; you're no longer selling an online-to-offline model. It's just online. However, on the plus side, considering that eSports, and games are played digitally, and YouTube and everything is all digital, and pretty much everyone right now is on their phones, getting the entertainment that they want. what we see is viewership, in terms of content and in terms of and streaming, has grown significantly. Obviously, there's pros and cons in the business. The question is, how are you utilising this surge in viewership to open up your monetization model with digital campaigns. So I think for a long time, especially in Southeast Asia, if you look at advertising spend, pretty much 80 percent is still spent on traditional ads, meaning your mainstream TV, your billboards and the likes of those. Some 20% is spent on digital campaigns. So we're using this opportunity to educate and convert that traditional budget into digital. We're doing more  digital content, digital events, community engagement events, to attract the traditional budget to come into the digital side of things. So, we are losing out on some, but be also getting more on the digital side.

HARTMAN, EVOS  14:22  
I think this is a really good time actually for a lot of the brands to engage with the younger audience; millennials, Gen Z's; who are really hyper-engaged. They really want to send out a message that "hey, we're here for you. We are part of your interests and hobby. We support this and we can be part of your lives.

ALAN  14:44  
Niko Partners estimates that 90 to 95% of PC and mobile gamers in Southeast Asia already play eSports A) is this even true? And B) if it is, does it also mean that our best days of growth are behind us? 

IVAN, EVOS  15:00  
Games in general have changed over the last couple of years. Four years ago, a majority of the gamers were male. If we look at our data, it's 90% male, 10% or less female. But what you're seeing right now is the rise of the female gamer, becoming more of a social gaming experience whereby, even when people meet, not in person to have lunch or dinner, before the food comes, they might still play a game of Mobile Legends or Free Fire or PUBG Mobile. So I wouldn't really call it a "gaming industry" right now. But I call it more an entertainment industry, when gaming is a form of entertainment the majority of people are using these days. So I think there's some merit to that. I don't know what the exact number is, but I would say it's close to mainstream right now.

HARTMAN, EVOS  15:50  
I don't think the growth is behind us because a lot of people are still very eager to play and to spend on the platforms.

IVAN, EVOS  15:58  
I think if you look at  the game developers' numbers in the last couple of months, pretty much every single game company has grown tremendously, as everyone is in lockdown and  stuck at home. And the only entertainment they have is either content streaming, content viewership or games. I think that's gonna be our next wave of growth. As all these occasional viewers of eSports delve deeper into the game, they become bigger fans of the game itself.

ALAN  16:28  
Let's focus on Indonesia. How quickly is it growing for EVOS? How does it rank across the markets in which you guys operate?

IVAN, EVOS  16:36  
I would say right now, Indonesia is still our largest market. But I think by the end of this year, you'll see Indonesia and Thailand being on par with each other. In terms of growth, if you look at Mobile Legends professional league, when we started, peak viewership was around 40,000 to 50,000. Last year, it peaked at around 500,000. And just in the last season, three months ago, peak viewership was at 1.2 million, not including traditional TV stations. The growth season-over-season has been tremendous, more than doubling every single season. So I think that the demand and interest for competitive eSports tournaments, it's definitely on the rise.

ALAN  17:20  
On the other side of the coin in terms of risk, just to set the stage, in China over the past 20 years, we've seen a bit of a love-hate relationship emerge between the regulator and the country's gaming platforms. In 2007, for instance, the government forced the games platforms to instal "anti-addiction" software, which limited gameplay each day. In early 2018, it halted new game approvals. My question is, does Indonesia and Southeast Asia more generally face a growing risk that the region's parents who, maybe are distressed at all of the hours their children play games and thus don't focus on homework, that these parents appeal to the government to crack down on on excessive gaming?

HARTMAN, EVOS  18:06  
I think on the government side, there's a lot of support. And that's why you have the first-ever Presidents Cup using eSports. It's been the second time right now, last year. So there's a lot of support, a lot of education has to be done. Because a lot of people look at some eSports athletes and think that they're having it's so easy, because they're just playing games a couple hours a day, and they can make huge amounts of money. It's the same thing throughout all professions: what they don't see is that they spend hours and hours and hours really training, literally training, their skills. So, I think education has to be a huge part.

IVAN, EVOS  18:47  
So I think to add on to that, the public perception of gaming has changed tremendously in the last, I'll say, one year. One year ago, the World Health Organisation published an article talking about how gaming leads to gaming and addiction. However, just fast forward year, two months ago, they published a similar article saying, "We advise people to play games during this lockdown, to prevent feelings of loneliness and to ensure social activity is still present amongst each other." And that shows the change in mentality towards games.

HARTMAN, EVOS  19:24  
Yeah,  counter to what a lot of people think, gamers these days are very, very social. A lot of people meet online and they become really close friends. 

IVAN, EVOS  19:32  
I think motivation is very important, just like any other thing in life.

HARTMAN, EVOS  19:35  
They did studies in Korea about the differences in professional athletes - eSports athletes - versus people who are addicted to games. Professional athletes, when they hook their brains up to a monitor, they can tell that they treated it as a job, nine-to-five, and they were training vigorously. At 5:01, they clock out. They just hang out with friends. The differences with that and people who are addicuted is that they can't clock out. And they're not inherently training to be better, but they're just addicted to the world that has been created around them inside the game. 

Something a lot of our players face is cyberbullying. I think it is a huge thing, especially for a lot of these teens, or younger millennials, Gen Z. They still get cyber bullied, they still get criticised heavily and it's unfair, and that leads them to a huge, huge downward spiral. Just reading the comments, that's very unhealthy. And so that's what we actually help them with as well.

IVAN, EVOS  20:32  
And that's the other side of the spectrum. So I mentioned my "brand love" just now. eSports can help you to create fans' love for yourself. On the other side of it, because it's such an emotional thing watching someone lose, it also creates a lot of hate. When the fans have when fans pour in their heart in supporting you, and you disappoint them, essentially that leads to hate.

HARTMAN, EVOS  20:57  
So a lot of these people actually have followed them a long time, and "grew" with them. So they're like your "boy next door" or "girl next door" type of person that became big. And so you have invested not only your time, but also emotionally in these people. Whereas a David Beckham or a Shaq or a Kobe, you're only engaged with them after they're in the NBA, in the league. And then when they're out, you don't really have any chance of interaction or anything.

ALAN  21:27  
Guys, what excites you most about eSports in Indonesia, as you look into the future?

HARTMAN, EVOS  21:31  
I think right now, even though mobile penetration is really, really high; I would say a lot of people still don't have really good internet. I think that's one of the things that excites me because that's a huge, huge growth potential over there. So with more content, more people playing games, and more people being able to interact with us, that is what excites me the whole Southeast Asia market.

IVAN, EVOS  21:57  
When we started this company, our company vision that we set for ourselves was to "turn dreams into reality", and inspire the next generation. And after five years of talking to players and building players and grooming players, I actually directly see the impact that gaming and eSports have had on our players themselves. A lot of them come from really unfortunate backgrounds, but because they have to be nopee to play a game well, it has completely transformed their lives and turned them into the role models that they are today. So aside from the industry growth, what I'm very excited to see is: how many more people can we impact and how many more dreams coming and built for the future generations, people that dream to pursue careers in the arts and gaming and content creation. I'm very excited to see what we can do for them and pave the way to build their dreams for the future.

ALAN  22:58  
Very mission based statements I really appreciate that. 

Well this concludes our fourth instalment of Indo Tekno. Thanks so much for joining us today, Ivan and Hartman. As always, we welcome any and all other feedback on the show. My email is alan@gizmo-advisors.com. Please do also visit our website at indo-tekno.com, if you'd like to be put on our mailing list for new episodes. The podcast was translated from English Bahasa Indonesia by Alpha JWC Ventures.

Terima kasih untuk mendengarkan. Sampai jumpa lagi!

Transcribed by https://otter.ai
 

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