{"id":13031,"date":"2020-05-01T10:44:42","date_gmt":"2020-05-01T14:44:42","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/formula-1-speeding-towards-e-sports-success\/"},"modified":"2020-05-01T10:44:42","modified_gmt":"2020-05-01T14:44:42","slug":"formula-1-speeding-towards-esports-success","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/formula-1-speeding-towards-esports-success\/","title":{"rendered":"Formula 1: Speeding towards esports success?"},"content":{"rendered":"<p><strong>Background<\/strong><\/p>\n<p>Formula 1 (\u201cF1\u201d) can trace its roots back to European motor racing in the 1920s\/30s. Millions of fans now watch the 22 annual Grand Prix races, where cars reach average speeds of c.185 mph. The sport is managed by the \u2018Formula 1 Group\u2019 (also referred to as \u201cF1\u201d in this post). Even before coronavirus, F1 has been facing a crisis: since 2008, viewership has declined significantly \u2013 despite a recent uptick (see Figure #1). Younger generations view F1 as boring and predictable \u2013 and those &lt;25 years old represent only 14% of viewers[1].<\/p>\n<p><em>\u00a0<\/em><\/p>\n<p><u>Figure #1\u2013Unique F1 TV Viewership[2][3]<\/u><\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/05\/Chart-1.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-13029\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/05\/Chart-1.png\" alt=\"\" width=\"808\" height=\"438\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/05\/Chart-1.png 808w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/05\/Chart-1-300x163.png 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/05\/Chart-1-768x416.png 768w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/05\/Chart-1-600x325.png 600w\" sizes=\"auto, (max-width: 808px) 100vw, 808px\" \/><\/a><\/p>\n<p><strong>Enter Coronavirus<\/strong><\/p>\n<p>Coronavirus has further compounded the issues facing F1. They have yet to hold a Grand Prix in 2020 and have cancelled (e.g., Monaco Grand Prix) or postponed (e.g., Chinese Grand Prix) the first 10 races of the season[4]. F1 announced they hope to hold c.15 races later in 2020 (vs. a total scheduled of 22) \u2013 but this could be reduced if the situation persists. This is worrisome for F1, given the majority of their revenue comes from track, broadcast and advertising fees. As a result, F1 have furloughed &gt;50% of staff[5].<\/p>\n<p>&nbsp;<\/p>\n<p><strong>A Silver Lining?<\/strong><\/p>\n<p>Since mid-March, F1 has attempted to fill its content void by hosting \u2018Virtual Grand Prix\u2019 in lieu of those postponed\/cancelled (see Figure #2 for Chinese Grand Prix highlights). The first, the \u2018Virtual Bahrain Grand Prix\u2019, was pulled together in five days and held on March 22<sup>nd<\/sup>. It attracted 3.2M online viewers across platforms. It was also aired by traditional TV broadcasters, including the UK\u2019s Sky Sports \u2013 attracting c.2M TV viewers[6]. The rights were given for free to appease current broadcast partners. Current F1 drivers such as Charles LeClerc took part, alongside several celebrities.<\/p>\n<p>&nbsp;<\/p>\n<p><u>Figure #2\u2013Chinese Grand Prix Highlights[7]<\/u><\/p>\n<p style=\"text-align: center\"><iframe loading=\"lazy\" title=\"Chinese Virtual Grand Prix Highlights with Thibaut Courtois and Alex Albon\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/29XP4Q_jUwM?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p>&nbsp;<\/p>\n<p>The Bahrain race experienced some technical issues \u2013 with several drivers having a delayed start due to connection latency. Fans also criticized the applied assisted settings (e.g., traction control), which sought to level the playing-field between experienced gamers and professional drivers not used to a virtual setting[8]. Since this race, F1 has largely ironed out these issues. Throughout April they have kept up a rhythm: replacing Grand Prix races with a virtual Grand Prix \u2013 and for weekends without a race, hosting virtual exhibition races for fans to race against F1 drivers[9].<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Leveraging Existing Capabilities<\/strong><\/p>\n<p><em>Esports Expertise<\/em><\/p>\n<p>F1 actually launched its esports program in late 2017, which coincided with the appointment of current CEO Chase Carey in early 2017. To execute, F1 has partnered with Gfinity \u2013 who manages tournament operations and production[10]. Alongside this, F1 built out a new internal esports team to manage commercial development.<\/p>\n<p>&nbsp;<\/p>\n<p>Since 2017, F1 has run three \u2018Esports Pro Series\u2019 \u2013 with the latest boasting a $500K prize pool. The 2019 series drew an audience of 5.8M, a 76% improvement vs. the previous year. These viewers had a promising age profile, with 79% &lt;34 years old[11]. In that way, esports is serving as a stepping stone to attract younger audiences to F1.<\/p>\n<p>&nbsp;<\/p>\n<p><em>Steaming Infrastructure<\/em><\/p>\n<p>F1 launched an over-the-top (\u2018OTT\u2019) streaming platform in 2018: F1TV. This platform gives subscribers access to live races, alongside race recordings and documentaries. To build F1TV, F1 partnered with Tata Communications, who provided ongoing technical support[12]. Over the past few weeks, F1 streamed the virtual Grand Prix races through F1TV, alongside other platforms like Twitch and YouTube.<\/p>\n<p><em>\u00a0<\/em><\/p>\n<p><em>Game Software<\/em><\/p>\n<p>F1 used the \u2018F1 2019\u2019 video game for its virtual races, which it created in collaboration with developer Codemasters. F1 and Codemasters have produced a F1 game each year since 2009[13]. This annual iteration allowed for incremental improvements in game quality each year \u2013 with the exception of 2014\/2015 (see Figure 3). The \u2018F1 2019\u2019 game has won a series of awards: including TIGA \u2018Best Racing Game\u2019[14]. \u2018F1 2019\u2019 was well positioned to act as the platform for virtual Grand Prix, as it was the highest quality and most realistic version yet.<\/p>\n<p>&nbsp;<\/p>\n<p><u>Figure #3\u2013Game Reviews[15]<\/u><\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/05\/Chart2.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-13028\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/05\/Chart2.png\" alt=\"\" width=\"813\" height=\"533\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/05\/Chart2.png 813w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/05\/Chart2-300x197.png 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/05\/Chart2-768x503.png 768w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/05\/Chart2-600x393.png 600w\" sizes=\"auto, (max-width: 813px) 100vw, 813px\" \/><\/a><\/p>\n<p><em>Game Hardware<\/em><\/p>\n<p>A hardware ecosystem has also been built around the game. Players can purchase third-party steering wheels and driving chairs to emulate a \u2018cockpit\u2019. More formally, F1 partnered with manufacturer Fanatec to supply cockpits for drivers to use at esports events (see Figure #4)[16]. When coronavirus hit, F1 were able to supply cockpits to those racing.<\/p>\n<p>&nbsp;<\/p>\n<p><u>Figure #4\u2013Racing Cockpit[17]<\/u><\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/05\/Picture-1.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-13030\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/05\/Picture-1.jpg\" alt=\"\" width=\"600\" height=\"400\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/05\/Picture-1.jpg 600w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/05\/Picture-1-300x200.jpg 300w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<p><strong>Generalizable Lessons<\/strong><\/p>\n<ol>\n<li><u>Invest for the future<\/u>: In many ways, esports was a perfect hedge against race disruptions. By investing in its esports capabilities\/infrastructure, F1 was well positioned to pivot and deliver content virtually. Organizations should invest early in virtual content delivery, particularly those who are \u2018undiversified\u2019 \u2013 i.e., where disruption to physical operations can have a significant impact on performance<\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<ol start=\"2\">\n<li><u>Iterate quickly<\/u>: F1 used iteration to continuously improve its F1 video game \u2013 releasing a new, improved version to fans annually. It also iterated quickly over the past weeks, especially after technical issues with the Bahrain race. Organizations should use digital channels to launch MVPs quickly, before listening to feedback to improve future iterations<\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<ol start=\"3\">\n<li><u>Partner well<\/u>: F1 has used partnerships to effectively scale esports (e.g., Gfinity for esports production). By outsourcing these capabilities, F1 gained speed, allowing them to launch an esports offering quickly. Organizations should selectively partner to build digital expertise, especially where there is limited risk of vertical integration by partners (as with F1)<\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<p><strong>Conclusion<\/strong><\/p>\n<p>F1 has deliberately innovated its business model to deliver virtual content to fans. The speed of this pivot was impressive \u2013 and was made possible by their existing digital capabilities\/infrastructure.<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p>Will the interest in virtual races last after the pandemic ends? I believe it will. Virtual races won\u2019t replace physical, but they can be a complement (e.g., for weekends with no Grand Prix) \u2013 especially as the realism of the software\/hardware improves. Virtual races could become F1\u2019s new growth engine, helping to retain existing viewers and bring in the ever-elusive younger demographic.<\/p>\n<p>&nbsp;<\/p>\n<p>Coronavirus has provided the perfect test platform for racing esports \u2013 and it appears it\u2019s around to stay. For those still intrigued, tune into the Dutch Virtual Grand Prix at 1pm EST on Sunday, May 3<sup>rd<\/sup> (see <a href=\"https:\/\/www.formula1.com\/en\/latest\/article.football-and-cricket-stars-to-join-f1-drivers-for-sundays-virtual-grand-prix.M3W2X3h5MIeLBC8qVrb9D.html\">here<\/a>).<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><em>Word Count: 991<\/em><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><span style=\"text-decoration: underline\">References<\/span><\/p>\n<p>[1] Christian, Sylt. Forbes. Jan 2019. \u201cF1 Reveals That Just 14% Of Its Viewers Are Under 25\u201d. Retrieved from: <a href=\"https:\/\/www.forbes.com\/sites\/csylt\/2019\/01\/13\/f1-reveals-that-just-14-of-its-viewers-are-under-25\/#6ffdf49f6d5c\">https:\/\/www.forbes.com\/sites\/csylt\/2019\/01\/13\/f1-reveals-that-just-14-of-its-viewers-are-under-25\/#6ffdf49f6d5c<\/a><\/p>\n<p>[2] Statista. \u201cNumber of TV viewers of formula One (F1) racing worldwide from 2008 to 2018\u201d. Retrieved from: <a href=\"https:\/\/www.statista.com\/statistics\/480129\/cable-or-broadcast-tv-networks-formula-one-f1-racing-watched-within-the-last-12-months-usa\/\">https:\/\/www.statista.com\/statistics\/480129\/cable-or-broadcast-tv-networks-formula-one-f1-racing-watched-within-the-last-12-months-usa<\/a><\/p>\n<p>[3] Sam Carp. SportsPro. Jan 2020. \u201cF1 global TV audience reaches 1.9bn but unique viewership falls 3.9%\u201d. Retrieved from: <a href=\"https:\/\/www.sportspromedia.com\/news\/f1-tv-ratings-2019-digital-social-media-figures\">https:\/\/www.sportspromedia.com\/news\/f1-tv-ratings-2019-digital-social-media-figures<\/a><\/p>\n<p>[4] Formula1.com. \u201cF1 and coronavirus FAQ: Everything you need to know\u201d. Retrieved from: <a href=\"https:\/\/www.formula1.com\/en\/latest\/article.f1-and-coronavirus-faq-everything-you-need-to-know.6TwjCsP5iARqiIEci9lZFi.html\">https:\/\/www.formula1.com\/en\/latest\/article.f1-and-coronavirus-faq-everything-you-need-to-know.6TwjCsP5iARqiIEci9lZFi.html<\/a><\/p>\n<p>[5] Adam Cooper. Autosport. Apr 2020. \u201cFormula 1 organisation furloughs staff and issues pay cuts\u201d. Retrieved from: <a href=\"https:\/\/www.autosport.com\/f1\/news\/148931\/f1-organisation-furloughs-staff-and-issues-pay-cuts\">https:\/\/www.autosport.com\/f1\/news\/148931\/f1-organisation-furloughs-staff-and-issues-pay-cuts<\/a><\/p>\n<p>[6] Ed Dixon. SportsPro. Mar 2020. \u201cF1\u2019s inaugural virtual Grand Prix draws 3.2m online viewers\u201d. Retrieved from: <a href=\"https:\/\/www.sportspromedia.com\/news\/f1-virtual-bahrain-grand-prix-online-viewers-streaming-esports-julian-tan\">https:\/\/www.sportspromedia.com\/news\/f1-virtual-bahrain-grand-prix-online-viewers-streaming-esports-julian-tan<\/a><\/p>\n<p>[7] YouTube. \u201cChinese Virtual Grand Prix Highlights with Thibaut Courtois and Alex Albon\u201d. Retrieved from: <a href=\"https:\/\/www.youtube.com\/watch?v=29XP4Q_jUwM&amp;t=\">https:\/\/www.youtube.com\/watch?v=29XP4Q_jUwM&amp;t=<\/a><\/p>\n<p>[8] Callum McCarthy. SportBusiness. Apr 2020. \u201cFormula One\u2019s virtual grands prix are a silver lining during dark times\u201d. Retrieved from: <a href=\"https:\/\/www.sportbusiness.com\/2020\/04\/f1s-virtual-grands-prix-are-a-silver-lining-during-dark-times\/\">https:\/\/www.sportbusiness.com\/2020\/04\/f1s-virtual-grands-prix-are-a-silver-lining-during-dark-times\/<\/a><\/p>\n<p>[9] Formula1.com. Mar 2020. \u201cFormula 1 launches Virtual Grand Prix Series to replace postponed races\u201d. Retrieved from: <a href=\"https:\/\/www.formula1.com\/en\/latest\/article.formula-1-launches-virtual-grand-prix-series-to-replace-postponed-races.1znLAbPzBbCQPj1IDMeiOi.html\">https:\/\/www.formula1.com\/en\/latest\/article.formula-1-launches-virtual-grand-prix-series-to-replace-postponed-races.1znLAbPzBbCQPj1IDMeiOi.html<\/a><\/p>\n<p>[10] F1 Esports Series. Apr 2019. \u201cFormula 1 New Balance Esports Series To Kick Off Its Third Season\u201d. Retrieved from: <a href=\"https:\/\/f1esports.com\/news\/formula-1-new-balance-esports-series-to-kick-off-its-third-season\/\">https:\/\/f1esports.com\/news\/formula-1-new-balance-esports-series-to-kick-off-its-third-season\/<\/a><\/p>\n<p>[11] Formula1.com. Dec 2019. \u201c2019 F1 Esports Series records largest-ever audience\u201d. Retrieved from: <a href=\"https:\/\/www.formula1.com\/en\/latest\/article.2019-f1-esports-series-records-largest-ever-audience.4G12AoLCpCBi3B5p8tQ3xQ.html\">https:\/\/www.formula1.com\/en\/latest\/article.2019-f1-esports-series-records-largest-ever-audience.4G12AoLCpCBi3B5p8tQ3xQ.html<\/a><\/p>\n<p>[12] Logan Bradley. SportTechie. Mar 2018. \u201cFormula 1, Tata Communications Launch OTT Platform F1 TV\u201d. Retrieved from: <a href=\"https:\/\/www.sporttechie.com\/formula-1-launches-ott-platform-f1-tv-collaboration-tata-communications\/\">https:\/\/www.sporttechie.com\/formula-1-launches-ott-platform-f1-tv-collaboration-tata-communications\/<\/a><\/p>\n<p>[13] Codemasters. Oct 2019. \u201cCodemasters extends F1 partnership\u201d. Retrieved from: <a href=\"https:\/\/www.codemasters.com\/codemasters-extends-formula-1-partnership\/\">https:\/\/www.codemasters.com\/codemasters-extends-formula-1-partnership\/<\/a><\/p>\n<p>[14] Codemasters. Nov 2019. \u201cF1 2019 wins Best Racing Game at the TIGA Games Industry Awards 2019\u201d. Retrieved from: <a href=\"https:\/\/www.codemasters.com\/f1-2019-wins-best-racing-game-at-the-tiga-games-industry-awards-2019\/\">https:\/\/www.codemasters.com\/f1-2019-wins-best-racing-game-at-the-tiga-games-industry-awards-2019\/<\/a><\/p>\n<p>[15] Metacritic. \u201cVideo Game Reviews\u201d. Retrieved from: <a href=\"https:\/\/www.metacritic.com\/game\">https:\/\/www.metacritic.com\/game<\/a><\/p>\n<p>[16] Andrew Evans. gtplanet. Jul 2018. \u201cFanatec Becomes Official F1 Partner, Equipment Supplier for Fanzone and F1 Esports Series\u201d. Retrieved from: <a href=\"https:\/\/www.gtplanet.net\/fanatec-becomes-official-f1-partner-equipment-supplier-for-fanzone-and-f1-esports-series\/\">https:\/\/www.gtplanet.net\/fanatec-becomes-official-f1-partner-equipment-supplier-for-fanzone-and-f1-esports-series\/<\/a><\/p>\n<p>[17] Kate Walker. New York Times. Nov 2017. \u201cF1 Turns Its Attention to Esports and Its Younger Fans\u201d. Retrieved from: <a href=\"https:\/\/www.nytimes.com\/2017\/11\/24\/sports\/autoracing\/f1-esports-racing.html\">https:\/\/www.nytimes.com\/2017\/11\/24\/sports\/autoracing\/f1-esports-racing.html<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Coronavirus has put a halt to the current Formula 1 season. However, within days of postponing\/cancelling Grand Prix races, Formula 1 innovated to offer &#039;Virtual Grand Prix&#039; races to its fans. How did they achieve this? Will this esports success be long-lasting?  <\/p>\n","protected":false},"author":11315,"featured_media":13032,"comment_status":"open","ping_status":"closed","template":"","categories":[2005,2003,653],"class_list":["post-13031","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-esports","category-racing","category-sports","hck-taxonomy-organization-formula-1","hck-taxonomy-industry-sports","hck-taxonomy-country-united-kingdom"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/digital-innovation-and-transformation-during-the-covid-19-pandemic\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Formula 1: Speeding towards esports success? - Digital Innovation and Transformation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/formula-1-speeding-towards-esports-success\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Formula 1: Speeding towards esports success? - Digital Innovation and Transformation\" \/>\n<meta property=\"og:description\" content=\"Coronavirus has put a halt to the current Formula 1 season. 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