Motorsports’ quick decision to embrace simulated racing has produced excitement around the sport and a connection with potential new fans.
On Friday of the fateful week that sports shut down, Steve Myers received an unexpected text message from Eric Shanks, CEO and executive producer at FOX Sports.
Myers, the executive vice president of iRacing, usually doesn’t get random notes from sports power brokers, but the coronavirus pandemic that was touching off was anything but usual.
Shanks was about to catch a flight, but he heard about a plan that was hatching to use iRacing — a subscription-based racing online simulation — as substitute entertainment during the shutdown for real-life NASCAR racing, a sport for which Fox pays hundreds of millions of dollars annually to broadcast. With real racing suddenly impossible, Shanks wanted to talk to the man with the keys to the virtual kingdom.
The two caught up after Shanks landed, and less than two months later, the makeshift product has unexpectedly vaulted into a notable success story amid the shutdown.
The American stock car series is joined by IndyCar, Formula One, Formula E, MotoGP, and Australian Supercars as entities across global motorsports that have dabbled in esports during the shutdown. As a result, simulator racing has caught on like never before.
“We don’t even have a contract — that’s been the beautiful thing,” said iRacing’s Myers, who also serves as executive producer. “Nobody has their hand out, nobody is asking for a payment or money. … We’re not writing checks to anyone and we haven’t asked for money from anyone. We viewed this as an opportunity to do something for the industry and try to help our partners in a time when no one can do anything.”
The Pro Invitational Series uses NASCAR’s real-life drivers as participants and has had everything from virtual flyovers from military members using simulator equipment of their own, to chaplains and singers sending in videos of a socially distanced pre-race prayer or national anthem rendition.
The series is averaging 1.1M viewers per race, according to Nielsen, shattering the record for esports viewership on U.S. linear TV, beating a “Mortal Kombat” event on The CW in 2016 that collected 770K viewers.
iRacing is the dominant simulator racing software in the U.S., having been founded in 2004 with Boston Red Sox owner John Henry serving as principal owner. The company had around 120K subscribers when the Pro Invitational Series started in mid-March, and it has since grown by 35% to 162K as of mid-April, a significant boost to iRacing’s business.
Subscribers, who include professional drivers and amateur enthusiasts, pay either a monthly or annual fee and work their way up to different skill-based divisions. The regular price for a one-year subscription is $110 USD, while the per-month price is $13. It’s routine for famous drivers to race alongside everyday enthusiasts in iRacing, an enticing quirk that can’t really be replicated the same way in other sports.
By Myers’ account, the idea for the Pro Invitational Series started on March 12, the day after the NBA suspended its season. Myers called Tim Clark, NASCAR’s senior vice president and chief digital officer, who confided to Myers that there may not be a race that weekend at Atlanta Motor Speedway.
Myers spoke later that night to Dale Earnhardt Jr., a longtime iRacing subscriber and evangelist of the product, who said that he was talking to Fox broadcaster and former NASCAR driver Jeff Gordon about the possibility of putting something with simulated racing together that weekend should NASCAR postpone, which it did later that week.
The first Pro Invitational Series race took place on March 22.
The success of the venture has caught even Henry by surprise, with Myers saying that the principal owner was “quite thrilled” during a recent board meeting for iRacing, and that it has validated Henry’s long-held faith in the company.
COMPETITION IN THE SPACE
However, while iRacing is a leader in simulator racing software in the U.S., it’s got some competition globally, and others also have enjoyed success during the shutdown. F1’s esports events, which are on the Codemasters platform, also have been aired by ESPN in the U.S. NBC Sports has aired simulator racing coverage during this period, mainly around IndyCar, which is also on iRacing, as well as some special one-off exhibitions with NASCAR drivers.
Another player during the period has been Torque Esports, a burgeoning esports racing company that seized upon the shutdown to put together high-profile virtual races that drew real-life drivers from IndyCar and F1. Torque got ESPN to air the events in the U.S., in addition to several companies such as Rokit phones and Jones Soda to sign up as sponsors. Torque uses the rFactor 2 simulator platform.
Torque owns new racing digital media outlet The Race, which was the public face and name for the events, called “The Race All-Star Series — Fully Charged by ROKiT Phones.” Torque President and CEO Darren Cox said the shutdown of sports has resulted in his company reaching revenue levels that it didn’t expect to hit for another 18 months.
The Race’s first event, held the weekend that sports shut down in mid-March, earned around 60K concurrent viewers digitally, and Torque said the series has reached more than 600K homes globally.
“To turn that around with that professionalism in 72 hours was 15 years in the making,” said Cox, who has an extensive background in simulated racing. “We find it quite amusing to see these guys rushing into this space that we’ve been in for a long time, but it’s great to see, and the numbers have been taking people by surprise.”
The shutdown has led to a unique opportunity for esports overall, including the classic core shooter games, given how so many competitive gaming properties have been able to pivot to online-only matches. However, Cox opined that simulated racing “has been the biggest success out of all the esports, because it’s the closest to the real thing.”
Simulators have been a part of motorsports since around the turn of the millennium, as car manufacturers and teams use high-tech, extravagant rigs at their headquarters to keep the drivers’ muscle memory sharp and to help them learn or remember the twists and turns at racetracks around the world.
The rigs that drivers have at their homes can still run into the tens of thousands of dollars, with Joe Gibbs Racing star driver Denny Hamlin putting his at $40K. The shutdown has clearly turned into a boon for simulator rig manufacturers, as drivers throughout global motorsports have been posting social media pictures and videos of them taking delivery of new rigs in recent months.
However, iRacing doesn’t necessarily favor having more flashy setups. The most consistent driver in the Pro Invitational Series has been Timmy Hill, who runs with lesser-funded teams in real life and yet is winning events in iRacing with a simple steering wheel that’s clamped to his computer desk.
GETTING SPONSORS ATTENTION
At a time when virtually every sport on earth was shut down, the Pro Invitational Series has drawn more mainstream media coverage than NASCAR often enjoys, getting routine coverage on ESPN’s “SportsCenter,” for example.
All that attention has raised the stakes and led to sponsorship becoming an increasing focus. Most teams are giving the virtual paint scheme asset to their current sponsors for free as a goodwill value-add, but they also have been getting unsolicited calls from brands who are not current sponsors.
Many teams are telling such brands that they only want to do deals that involve real-life inventory as well, but some drivers have parlayed the iRacing success into sponsorships, including Hill, who signed a three-race deal with Pit Boss Grills. Roush Fenway Racing also landed an esports-specific sponsor in Air Force Reserve.
Nico Amantia, a senior account executive at Scout Sports & Entertainment who works in esports, says that while he hasn’t yet had any of the brands he works with make a new splash into NASCAR because of iRacing, “everyone is asking questions, everyone is intrigued with it.
“iRacing would be that first linear esports success in my mind,” Amantia said. “Even if brands aren’t saying, ‘I want to get involved in iRacing right now,’ it’s still been extremely important to legitimizing esports to marketers who are really wary against that model.”
It’s not just drivers who have turned to iRacing as a way to give sponsors value during the shutdown. NASCAR has followed its real-life schedule with the Pro Invitational Series, and the real race title sponsors have been given naming rights to the virtual races. To that end, NASCAR and Speedway Motorsports have worked with the software company to insert updated graphics into the game to give sponsors more value.
For example, O’Reilly Auto Parts’ logo was emblazoned into the infield grass at the virtual Texas Motor Speedway race, and iRacing’s Myers told Sports Business Journal that he has even been fielding requests from some of the tracks to change the pace car vehicle to the brand and model of that venue’s real-life official car sponsor.
The quantity and difficulty of those requests is making for many long days and nights for Myers and his Massachusetts-based staff. Every time a change is made to the layout of one of the virtual tracks, iRacing’s staff has to take down the entire service globally.
But producing the broadcast seen on Fox is fairly easy, Myers said. iRacing is producing races the same way it usually does, except now it’s sending that feed to Fox, which simply overlays its broadcasters’ audio and some graphics, and then transmits it to the world. Myers estimated that 90% of what viewers see with the finished product is done by iRacing. Broadcasters and a skeleton crew of staff at Fox’s studio in Charlotte have practiced social distancing to comply with Centers for Disease Control and Prevention guidelines.
RETAINING NEW FANS
With the return of real racing now beckoning, many fans and industry members are starting to turn their attention from the virtual world back to the thought of actual race cars and physical venues. After suspending its season following four events in mid-March, NASCAR is planning to return in mid-May at Darlington Raceway in South Carolina.
However, NASCAR has two existing esports pro leagues that don’t feature the sport’s real-life stars, and the hope is that those can draft off the success of the Pro Invitational Series.
For example, Clark, NASCAR’s chief digital executive, said that one of the pro leagues, the eNASCAR Coca-Cola iRacing Series, has seen fourfold and fivefold viewership increases during the shutdown period, when interest in simulator racing has exploded. Still, that series is working from a tiny base compared with the Pro Invitational Series, with digital concurrent viewers often coming in the four-figure range.
Nielsen said that 1M viewers who did not tune into any of NASCAR’s first four live races this year have tuned into one of the Pro Invitational Series events, and Clark said the hope is to transition some of these new eyeballs on the sport to the real races NASCAR will offer once the season resumes.
The sport also will head out of the shutdown knowing that it has a new lever it can pull during the offseason or even perhaps during rain delays: virtual races with its greatest stars.
“What I keep coming back to in my head is this was put together by a small group of people in a small period of time — there was no expectation on audience, sponsorship or revenue,” Clark said. “It was just, ‘This is the right thing to do right now to provide entertainment and a distraction for our fans.’”
UNWANTED ATTENTION
The outsized attention that simulated racing has enjoyed also led to some negative developments.
Driver Bubba Wallace caught some flak after he quit one of the races following a crash, leading sponsor Blue-Emu, a pain relief brand, to say it would drop him.
Kyle Larson lost sponsors and his job as a driver after he used a racial slur during an April 12 iRacing event that was not part of the official Pro Invitational Series. Larson, who had been one of the most highly touted drivers in the sport, was fired from Chip Ganassi Racing within 48 hours.
