Pandemic Paved the Method for Sim Racing, however Will It Final?

It takes more than gas to get a racing car running.

It takes money. And money needs sponsors. And sponsors need viewers who they hope will become customers. Which became a problem for motorsport when Covid-19 closed tracks around the world early last year. The financial drought brought teams, tracks and racing series from extinction.

The industry turned to an emerging phenomenon – simulated racing. In these extremely realistic video games, cars obey the laws of physics and run on reproductions of real routes that are accurate down to the last lane.

In an experiment, NBC and Fox replaced the canceled races with sim races. Nobody knew if digital cars would attract viewers and pay off for sponsorships. Traditionally, racing cars served as high-speed billboards with consumers asking for the engine oil that proved the winning car superior. Could a sim car sell engine oil that has no engine or oil?

Ten months into the experiment, sim races seem to be paying off as the television and web audiences helped save the 2020 season. And now Sim Racing is giving the teams a new source of income, giving sponsors a more responsible form of marketing, and engaging a young audience that motorsport has had a hard time conquering. Sim Racing will soon be facing the real test: Can it bind fans and sponsors when real cars are back on real tracks and real spectators are in the stands?

Racing video games are not new. In 1977 Atari you could play Indy 500 and Street Racer. In the 1990s, more demanding Formula 1 games – albeit with blocky graphics – flourished. The graphics were further developed in successive generations of game consoles from Xbox, PlayStation and Nintendo. At a glance, you may not even notice that the races are being simulated.

Desktops also run highly complex networked games such as iRacing, which has been chosen as the platform for a number of racing organizations including NASCAR, IMSA, IndyCar and the W-Series. Formula 1 chose its own commercial game from Codemasters.

Many professional racing drivers used the games privately for training. Due to the fidelity of the tracks, drivers can at least remember the layout. Some teams use special simulator software to optimize the setup of their actual cars before a race.

Sim Racing builds his driving skills to the point that some players, like William Byron, have created real cars. Mr. Byron, a NASCAR Cup series driver, now owns an eNASCAR team that won $ 100,000 in prize money in the 2020 eNASCAR Coca-Cola iRacing series.

For years, professional drivers have sneaked into online competitions unannounced. For fans, it’s like joining a pickup basketball game and finding LeBron James on the court.

Automakers see the branding value of games. Chevrolet announced news when its simulated C8.R mid-engined Corvette was added to iRacing’s IMSA range in September. Like manufacturers as diverse as Mazda and McLaren, Chevy licenses its vehicles for dozens of games, including Forza, Project CARS, and Gran Turismo Sport.

Gamers may not be the primary market for a $ 60,000 Corvette, said Kevin Kelly, a Chevrolet spokesman, “but it’s a chance to stay loyal to the brand.”

Sim racing was an afterthought until technology, social media and real racing grew together about three years ago, said Bryan Cook, who was hired by Joe Gibbs Racing (JGR to fans) to handle social media in 2009. He expanded to iRacing four years ago and started a private league where JGR professional drivers competed against “your average Joes,” he said.

A year before the pandemic, iRacing became an official part of the JGR marketing program, offering sponsors a younger audience and social media data for a fee.

“You get to the point where the drivers have to be paid,” said Mr. Cook. “There are equipment needs. We said we really have to cover our costs here. “

Sims had their big break on March 22nd, when both eNASCAR and virtual Formula 1 races were shown on television instead of canceled races. The eNASCAR race drew 910,000 spectators, less than the three million typical for NASCAR, but more than the 400,000 typical for a virtual race.

“We realized this could be a real replacement for these NASCAR races,” said Brad Zager, Fox Sports’ production and operations manager.

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The first F1 replacement race, the Virtual Bahrain Grand Prix, drew a total of four million viewers on digital and television, less than the 34 million average for an actual race but ahead of the 1.8 million average for pro-digital Run.

Last year “F1 Esports offered a new level of awareness for F1 Esports”, said Julian Tan, head of the department for digital business initiatives and esports at Formula 1. “We have digital record numbers of engagement in Austria and even in our esports Content seen Our official virtual championship last winter had record numbers. “

Broadcast TV is validated, but only part of Sim Racing’s reach. Livestreams could reach 400,000 viewers via YouTube, Facebook and Twitch, said Anthony Gardner, president of Motorsport Simulations. The social interactions – tweets, likes, comments – during the races are more valuable.

“The social media contacts are millions of times in a race,” said Gardner. These interactions provide customer data and the ability to speak directly to consumers.

Suddenly the sim racing audience was big enough to deserve attention but too new for marketers to capitalize on. Sponsors took different approaches, but all targeted an elusive new audience. NASCAR’s fan base has declined with age since 2005. Sim Racing attracts a younger and more racially diverse audience – attractive to sponsors and leagues.

“It’s really hard to reach this 18- to 35-year-old,” said Patrick Daugherty, who manages Valvoline sponsorships. “Gaming over-indices with young DIY enthusiasts.”

The company signed with Parker Kligerman, a celebrity racing driver and eNASCAR driver, before Covid-19 hit. “The audience and engagement exceeded our expectations,” said Daugherty. “We were really lucky and will renew ourselves with these guys in 2021.”

Despite being NASCAR’s official grill, Pit Boss Grills couldn’t afford to sponsor a front-line racer that is said to cost up to $ 35 million. That has changed with eNASCAR.

“This gave us the opportunity to become a major sponsor,” said Carlos Padilla, Director of Brand Partnerships. “It made it possible for us to be on a live broadcast about a car, if you want to call it that, at a price that is feasible for a company of our size.”

It cost four numbers per race to be seen by a million TV viewers – a bargain.

Discouraging iRacing seems like a circuit’s best interests, but Richmond Raceway first sponsored a team about three years ago. It built a simulator in a disused racing car for fans to try out. This innovation prompted Daytona International Speedway to borrow the car.

Not only has this raised Richmond’s profile, but sponsors’ money has also turned it into a five-figure profit.

“Marketing was the original goal,” said Brent S. Gambill, a spokesman who previously worked for the route and now for NASCAR’s mid-Atlantic region. “When it started, we spent money to be part of something. In the second year we made money. “

The online audience gives sponsors a chance to measure responses to certain offers, taglines, and prices in ways that television doesn’t.

However, a tsunami of data is not always helpful. “It would be fantastic for us if we could say that a million people watched last week and bought 200,000 cars this week. I don’t know if we’ll ever make it, ”said Paul Doleshal, general manager, Motorsports and Assets for Toyota Motors North America. “We’re drowning in information now.”

That makes it difficult to compare Sim Racing’s sales performance with Real Racing’s. But it can be a contentious question for a couple of reasons.

On the one hand, the two worlds are intertwined – the performance on the virtual track can have real effects.

When Darrell Wallace Jr., known as Bubba, finished a virtual race in frustration in April, sponsor Blue-Emu dropped him and tweeted in part: “Bye bye Bubba. We care about drivers, not slackers. “Kyle Larson, a driver, made a racial mistake during a sim race, lost sponsors, and was banned from NASCAR and iRacing. He will return to NASCAR in October.

The second reason is that while winning helps, it is not the only reason a fan will buy a car product.

“It’s not just about the literal oil,” said Eric Schwartz, a professor of marketing at the University of Michigan’s Ross School of Business. “It’s about being a trustworthy brand that understands this world of racing.”

After all, Sim’s simplest brand attraction is that it delivers viewers. “This is a way to get eyeballs for the brand to keep track of,” Schwartz said. “If Valvoline doesn’t sponsor a team, the competitor will.”

It will take time to know if sim race fans are turning into real racing enthusiasts and vice versa, but Fox has five sim races planned for its FS1 network this year.

“You have so many options with iRacing,” said Fox’s Zager, envisioning a field race one week and Daytona the next. “ESports became a very big buzzword when the pandemic hit,” he added. “But iRacing just went to the front of the field and no one caught up.”

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