John Higgins: OS Studios, Esports, and Video Gaming

Author(s): Scott Douglas Jacobsen

Publication (Outlet/Website): The Good Men Project

Publication Date (yyyy/mm/dd): 2024/11/30

John Higgins is the CEO of OS Studios, a global creative marketing agency specializing in video gaming and esports. Under his leadership, OS Studios has won numerous awards, including Webby, Clio, and the EventEx Awards. OS Studios earned an Emmy nomination, and John Higgins won the Digiday Leader of the Year Award while producing two of London’s top 10 hottest tickets, according to TimeOut. Featured in Business Insider, Digiday, Ad Age, and The Drum, he’s a sought-after expert in marketing, sports, gaming, and entertainment. Starting in theatre with Mayhem Productions, John transitioned to TV, exploring commercials and global storytelling as gaming surged. His expertise in gaming culture has propelled OS Studios to the forefront, with a focus on inclusivity, mentorship, and sustainable tourism. He has recently been featured in The Los Angeles Tribune, Giant Bomb, and The Chicago Journal.

Higgins discusses the rapid growth of video games and esports, emphasizing the scale of gaming culture, which is expected to reach $260 billion by 2025. He highlights the impact of COVID-19 on their remote-first business model and how it accelerated their growth. Higgins explains the challenges of esports, including the “esports winter” and the shift from traditional sports models. He also shares insights into innovative marketing strategies, such as Heinz and Doritos campaigns, reshaping in-game advertising.

Scott Douglas Jacobsen: Today, we’re here with John Higgins, who works in marketing, advertising, gaming, and esports. He’s the CEO of OS Studios, a global creative marketing agency specializing in video games and esports.

These areas have been rapidly growing in industry and sport—esports, in particular, can be considered a mental sport. Some elements focus more on reaction time, which is cognitive, but in a different way than traditional cognition. A lot is happening in this space.

Video games have surpassed Hollywood in revenue generation, and these platforms are massive for multiple industries. You won the Digiday Leader of the Year award and were recognized for professional excellence. What does the award represent, and what does it mean to you?

John Higgins: To give you an idea of the scale of gaming culture, by 2025, the global gaming industry is expected to be valued at around $260 billion, more than the combined value of the movie, music, and print industries. It’s enormous. It’s helpful to think of gaming culture now as social media 3.0 in many ways.

Regarding the Digiday award, it came as a surprise. I was nominated by my business partner, Ian Pons Jewell, with whom I co-founded O.S. Studios, and it came after the challenges of COVID-19. Strangely, COVID accelerated our growth. When the pandemic hit, and everyone had to stay home, O.S. Studios was already set up as a remote-first company.

Because of esports and gaming, we had already developed remote workflows—not just from a technical perspective but also from a cultural one. We figured out how to create social interactions and build large-scale cultural movements globally using marketing. We were ahead of the curve because if you want to work with gaming creators—whether they are on Twitch, YouTube, or other platforms—many of these creators make thousands to hundreds of thousands per month from their bedrooms. Suppose you ask them to leave their home to visit your studio, like traditional marketing or advertising shoots. In that case, you’d need to compensate them for the income they would lose by not being at home.

That compensation is substantial. So, from 2016 onwards, we developed strategies to create remote advertising ecosystems. When COVID hit, we had to speed up our plans. We went from feeling pretty nervous—wondering if we would have to shut down—to finding ways to make it work. At that time, we also had a venue business in Chinatown, Manhattan, which is doing well. Still, there were uncertainties about it back then.

I returned to my roots in broadcast and theatre, where I used to create shows that consistently sold out. We leaned into the entertainment aspect and adapted it to platforms like Twitch. We learned how to extend the engagement of our live shows through social media, creating challenges and keeping the energy alive.

As we continued producing these shows, brands started to get involved, opening up new revenue streams. In essence, we became early adopters of influencer-driven entertainment. I received the Digiday award for our success in navigating this transformation during a challenging period.

So, we could have done better for gamers. We started having companies reach out. I remember the NFL, the NBA, and all the big sports leagues getting in touch with us, asking, “Hey, can we host the after-party for the NFL Draft?” And it had to be remote, so we had to figure out how to make it entertaining because everyone was stuck at home.

We interestingly capitalized on that, which led to the Digiday Leader of the Year award. We were up against PepsiCo’s executive directors or CMOs—big names in the industry. So, it was a privilege to be recognized as the leader that year, which was great.

Jacobsen: Now that you’re in the U.K., how does the video game market look, given the vast international platforming of video games and their various sports-style formats?

Higgins: Yes, I’m actually in the U.K. right now. This past weekend, we launched an event with our client, Cloud Imperium Games, who are developing Star Citizen. We just hosted their CitizenCon for 4,000 people in Manchester.

It’s funny; people often ask me, “What about the U.K.?” because the North American market dominates sports, gaming, and entertainment. When they ask, I always say that the U.K. is about nine months behind.

What I mean is that while games often get released on the same day globally now—unlike in the past—the entertainment consumption around those games, particularly in the U.S., takes time to trend elsewhere. Put aside esports for a moment; what becomes the cultural zeitgeist or trending topic usually starts in America and gets copied in other regions as the creative norm.

For example, when Warzone dropped globally during early COVID-19, it didn’t immediately overtake FIFA as the top game. It took 6 to 9 months to become the dominant title, but once it did, it stayed as the go-to first-person shooter-meets-mass-multiplayer-online game.

I’m sorry, but I’m blanking on the term for it now. What’s it called when the last man standing wins?

Jacobsen: Do you mean battle royale?

Higgins: Yes, exactly! Warzone and Fortnite are all battle royale games. That’s what distinguishes them. The U.K., in terms of gaming trends, is often 6 to 9 months behind. Esports, however, is a different story. I mentioned that $250-$260 billion global valuation earlier, including esports.

Esports right now is valued at about $2 to $4 billion. So, it makes you realize how small esports are in the gaming culture. I don’t know if you’ve heard about the “esports winter,” but it’s well into effect now.

So, there’s this thing called the esports winter—it’s a joke, referencing Game of Thrones, like “Winter is coming.” Over the last year or year and a half, esports has shifted from being this sexy, exciting, futuristic way of sports consumption—everyone thought it would be the ultimate fan acquisition vehicle for rights holders. But over the last few years, the returns haven’t returned.

In the last year, many brands have pulled out of esports. 10% of the revenue that was there a year ago is still around this year. With that, we’ve seen things like the Overwatch League shutting down. Major companies and organizations like that, as well as big names in esports, have closed down. In the U.K., for instance, Guild Esports, which David Beckham was famously associated with (he was paid to be the frontman), was once valued at £20 million but sold for just £100,000 last week with £2 million of debt.

Jacobsen: Wow.

Higgins: Faze Clan also IPO’d, and while they started as an esports organization, they expanded their brand significantly. At one point, their valuation went wild—around $200 million. But recently, they merged with Gamesquare in a deal worth around $7 or $8 million, tens of millions less than their peak valuation. And now, they’re off the Nasdaq; you can’t buy their stock anymore.

This all stems from the esports market. Many brands and investors pulled out because they realized, as I always said from the early days at O.S., that we work in esports. Still, we never believed esports alone was the future. Gaming culture is the future, and esports is just a small part of it. The problem was that many people from traditional sports organizations like the NFL tried to recreate the sports model in esports—tying teams like the New York Subliners or Call of Duty teams to geographical locations.

But esports was built on something other than that. It wasn’t tied to a city or a country but to social movements, and that’s where they fundamentally got it wrong. So, going back to my original point, we’re going through an esports winter, and the U.K. is feeling the impact hard. U.S. esports organizations quickly adapted and diversified to become entertainment entities—they now control intellectual property (I.P.) in many ways. Some of them still compete, but their primary focus is on entertainment.

Jacobsen: In contrast, U.K. organizations stayed purely competitive for too long, so many no longer exist. That’s the key distinction between traditional sports and esports. Classical sports are typically tied to city or state identities—teams like the L.A. Rams are bound to their location. It’s part of the brand identity.

Higgins: Exactly. Unless you’re actively following it, it’s easy to miss how quickly esports has shifted. You’re not the first person today to mention that you didn’t know about this esports winter. But it’s happening. It could also be a market correction, like a bubble. Only a few people got involved with it early on. So, it’s a market correction as much as anything. 

Jacobsen: Did COVID-19 temporarily boost revenue and usage before the decline? Could that be tracked?

Higgins: Yes, a lot of it was people betting big. Especially within esports, 75% of all revenue came from sponsorship. I remember when Twitch paid $1 million for the rights to the NBA 2K League in its first year. Why wouldn’t they?

The NBA was going all-in on gaming. NBA 2K has around 30 million monthly active users. Everyone loves watching YouTube videos, and the NBA would make a live Twitch show every week for items like a pretty safe bet—you could argue there’d be traction and cultural relevance there. So, if you’re Intel, and you’ve already spent a load of money with the NBA, why not throw in an extra $5 million in sponsorship to get involved with the NBA 2K League? Twitch did something similar—they wanted to take the gamble and put in $1 million.

That’s an example of the early days. Everyone agreed, “We won’t measure success in six weeks or even six months. It’s a social movement. We need to see results over a year or two.” A lot of these things happened in 2018 and 2019. That’s when NBA 2K took off, and Overwatch took off around 2018. It takes time.

Then, COVID gave people more time to think, “Do you know what? We think the bet might still be working—let’s go another year.” So, many brands stayed and kept renewing deals, pouring money into teams, leagues, or in-game advertising, before they started realizing, “You know what? The return we’re seeing is so small. We could do better putting our money elsewhere in gaming culture, outside of the competitive esports scene.”

That created the bubble—everyone getting in on the hype too quickly. Look at A.I.—that’s cooled off now. NFTs? Same thing—there was all this hype. People didn’t know exactly what it was, but it was something. All of these trends compounded during that time.

Jacobsen: Do you see the future of marketing, advertising, and outreach for video games, and if this “winter” ends, esports as well, shifting as a consequence?

Higgins: Yes, good question. Where I see gaming going—and it’s sort of there already—is that gaming is becoming social media, just like Facebook was 15 or 20 years ago and YouTube was 10 years ago. Gaming is now the next phase.

I bring this up because we used to ask, “What did we do with social media five or ten years ago? How do we advertise through it?” We figured out how to turn social media from a good product into a more mixed product because of how much advertising is embedded in it. That’s where gaming is heading—for better or worse. It’s becoming a social channel.

Many people, especially 18 to 21-year-olds, are drawn to Fortnite. There’s something called Fortnite and Chill that’s especially popular. You create these maps, go into them with your friends, and strangers can join. You go in there, talk, chill, and explore the map. But good etiquette is that you don’t hurt each other. It’s similar to you and I going into an AOL chat room in the early days.

But now, it’s this giant metaverse where you can explore worlds together. It’s almost like a 3D Nexopia.

Jacobsen: It’s like Nexopia with guns you’re not allowed to use on each other, right?

Higgins: Correct. 

Jacobsen: You go in there, and they’re preregistered—the guns.

Preregistered and background-checked, mental health checks, the whole thing. We’re on the same page there. So, with that context, you start thinking about marketing and advertising. We’ve already learned, especially with this generation of cord-cutters—Gen Z and young millennials—that you must provide a value proposition. It would help if you gave them a reason to care about your message, brand, or whatever you’re trying to convey.

That’s where things are headed. I’ll give you a few examples. I can share good directions for things. For instance, Heinz recently, through Heinz and Toronto-based Ketchum, came up with an incredible idea for Call of Duty Warzone.

Did you see this? Still, they created the Heinz map in Warzone, identifying all the places you can hide and go AFK (away from the keyboard), drop the controller, and eat your chicken nuggets, McDonald’s, whatever. You can dip your fries in Heinz ketchup, take a break, and remain hidden in the game. They discovered random bushes where you couldn’t be seen, even with a sniper scope. These were the “safe places” for you to eat.

This campaign went viral in North America. It was genius; honestly, I wish I’d developed it myself. They didn’t even try to hide that it was advertising—they were transparent. They said, “Look, this is our product, and this is how you can use it to have a better experience while you game.”

Jacobsen: That’s clever.

Higgins: Right? And then there’s Doritos with DoorDash—they created a partnership where you could eat Doritos with one hand and still game with the other. They even suggested which game modes were best for this one-handed gaming experience.

So, you could eat your Doritos. They’re a bit like Cheetos—they get everywhere. And that’s Cheetos’ marketing campaign—”It goes everywhere.” They made it easier for you to eat with your fingers while gaming. I’m not saying that’s everything, but those things will become the norm. Right now, they’re the exception that proves the rule that paid media is still the 800-pound gorilla in the room when it comes to tackling gaming.

That’s going to become irrelevant. If you ask a gamer who’s maybe 25 to 30 years old, “Hey, tell me five brands in Borderlands that you liked on billboards,” they wouldn’t even know what you’re talking about. They’d be like, “What billboards?” There are billboards in there, but they’re fake brands. How will a real-life brand compete if the game itself can’t create a compelling enough lore for the story or campaign?

In-game advertising is going to have to get a lot smarter. To give a shout-out, a friend of mine works at Overwolf. They’re a fantastic organization. They’re one of the bigger digital marketing companies you have yet to hear of, but OS loves working with them. They’ve created various game middleware apps, especially on P.C. These apps track your data, stats, and friends. They create different ways to compare and compete, like daily bounty boards for League of Legends players.

They’ve also integrated ads in a fun way. Pringles recently did a campaign with them, the Pringle Challenge of the Day, where you could win Pringles while competing with your friends. The ads show up during gameplay and add to the experience. Hence, the transaction is obvious and makes things more fun.

That’s where things are headed. You’ll find that what’s happening in gaming is similar to what Netflix and other digital platforms are trying to figure out. They’re all looking for ways to make advertising additive while capturing much marketing revenue.

Jacobsen: Fair enough. Any final thoughts before we part ways, John?

Higgins: No, Scott, thanks for your time. I’m sorry I had to cut this short. I guess the last thing I’ll say is this: when we talk about gaming, or even in the bigger conversation of sports, gaming, and entertainment, I always say what we’re truly doing at O.S.—and why we’re so successful with brands coming to us—is fan acquisition. We’re audience experts, and we’re in the fan acquisition game. Video gaming is a juggernaut within the culture. That’s why we’re here. But in five years, who knows where we’ll be?

Jacobsen: Excellent, John. I appreciate your time. 

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