It’s everywhere you look now: teenagers glued to their screens in esports tournaments, universities investing millions of dollars into their gaming programs. From popular Twitch channels to mainstream media coverage, the gaming world is the new goldmine. With an estimated global audience of over 400 million viewers and more potential cash pouring in from multi-million dollar sponsorships, it’s no wonder gaming has quickly become its own powerful economy. So what does this mean for the people driving it? Get your mouse ready as we enter the gaming goldmine and uncover the steam of success that is esports.
1. Uncovering Esports: An Evaluation of the Economy
Esports, or electronic sports, is the highly competitive gaming industry that pits the best of the best in global competitions. With millions of dollars at stake, sponsorship deals, and modern-day gladiators, esports has become a massive economic powerhouse, and a worthwhile investment for many sponsors. But how is the esports economy faring? What does it take to be a successful esports sponsor? This article seeks to uncover the esports economy and whether its sponsorship deals are worth investing in.
Esports have become big business – with the global esports economy expected to reach $1.6 billion by 2021, it’s no wonder many sponsors are interested in getting a piece of the pie. At its core, the industry revolves around tournaments, both offline and online, in which professional esports teams compete for large sums of money. But how does an esports sponsorship work, and what kind of rewards come with it? Let’s take a look.
- Money Talks: Cash is the driver that powers the esports market, with sponsors paying for their privilege of having their brand prominently displayed. The investments can vary greatly, with some making six-figure sponsorships, while others make simple five-figure investments.
- Reaching the Masses: Sponsors also gain exposure to millions of esports fans around the world who view the tournaments. By having their brand prominently displayed, sponsors are able to enjoy an international audience and tap into unique marketing opportunities.
- Engaging Viewers: Esports sponsorship deals also allow sponsors to engage directly with viewers and build relationships with customers. Sponsors are able to create unique tournaments, exclusive in-game content, and other interactive experiences that will captivate viewers and keep them coming back.
So for those contemplating an entry into the esports world, it’s important to recognize that there is a lot of money to be made, and many benefits that come with such a sponsorship. However, as with any endeavour, it’s important to do your homework and come prepared. As the industry continues to grow and evolve, sponsors must remain ahead of the curve and take full advantage of all the opportunities that are available.
2. Examining the Benefits of Esports Sponsorship
As esports continue to gain a foothold on the international entertainment market, the gaming industry is being opened up to a range of new incremental revenue streams that would have been unimaginable a decade ago. With big names such as Amazon, Microsoft, and Sony investing billions of dollars into the sector, it is not surprising that sponsorships have become a major component of the esports economy.
Let’s look at how sponsorships are not only helping shape the esports landscape, but providing investors with powerful returns on their investment.
Engaging Audience, Unrivaled Reach
Esports are unique in the entertainment industry, as they draw millions of viewers worldwide and help brands engage with fans of gaming in unprecedented ways. In 2019, the League of Legends World Championship had more than 100 million viewers throughout the tournament. This created an audience that was larger than that of the 2019 NBA Finals, the 2019 FIFA World Cup, or the 2019 Super Bowl.
Having a sponsorship in gaming does not just provide brands with access to viewers, but rather to a vast, varied, and engaged fan base of true gaming enthusiasts — something only esports can offer.
Maximise ROI with Direct Interaction
Sponsoring an esports team or event isn’t a one-way street – brands can directly interact with and create a loyalty base of fans and supporters. Examples include limited edition gaming merchandise to reward loyal fans, social media campaigns with the sponsored teams and players, or special tournaments featuring sponsored teams.
If a brand shows a dedication to the players and teams through sponsorship, the fans will be much more likely to invest back in the brand. Few avenues of experiential marketing offer as much of a direct interaction and feedback loop as esports.
New Opportunities at the Intersection of Sports and Technology
As esports continue to expand, businesses will find opportunities at the intersection of sports and technology — and sponsorship is one of the most lucrative ways to capitalize on the trend. Esports has demonstrated its ability to create entertainment, brand awareness, and investment value. With these metrics in mind, sponsors 343 Industries, Blizzard, and Xbox, for example, invest millions of dollars into esports, and have seen extraordinary returns on their investments.
As such, esports provides untapped potential for investors and sponsors alike. Businesses that have access to technology and traditional sports teams should take advantage of this fresh opportunity, and explore the world of esports sponsorship.
3. Identifying Challenges to the Growth of Esports
The rise of esports has been an undeniable success, yet becoming fully established in the gaming industry has been a challenge. With corporations and investors investing millions into the gaming sector, the business potential is clear. However, turning profits and making esports a sustainable venture is the biggest challenge currently facing the scene. Here we’ll take a look at the potential obstacles to further growth.
- Lack of Clear Governance – Currently, esports is not monetarily regulated, making it difficult for organizations to invest. Without oversight and guidance, sponsors are hesitant to invest due to fear of backlash. A standardized set of governance would make it easier for corporations to invest safely.
- Reducing Costs – Esports events and tournaments have huge costs – especially when team salaries and other expenses are taken into account. Finding a balance of cost reduction and reward is a tedious process, but a necessary one for sustained growth. From cutting expenses on food and travel to finding sponsors willing to invest in order to cover these costs, finding a balance is essential.
- Establishing Promotion – Despite the tremendous popularity of esports, it is still a relatively niche market. Finding ways to tap into the mainstream market and developing sponsorships with large companies is a challenge that needs to be faced by organizations. Developing new and innovative ways to promote the esports scene will be necessary for long-term growth.
- Developing ‘Star Players’ – A major factor for the success of other sports, the need for esports organizations to acquire top-tier players cannot be overstated. With more recognizable names, more viewers and more fans, the scene would grow and multiple organizations could survive. Unfortunately, this is a plague many esports teams face, with too much competition for few stars.
- Alleviating Skill Gaps – Esports today is not as organized as traditional sports, with skill level discrepancies and an obstacle to change. Creating better skill certification programs and standardized tournaments to minimize these gaps is necessary for the esports industry. By doing so, more players will be able to play and receive recognition for their performances.
The esports industry is facing huge obstacles to its growth, from promoting the scene to developing its star players. With proper guidance, cost reduction and strategic sponsorship, the esports industry can prove to be the gaming goldmine its potential promises.
4. Exploring Strategies for Maximizing Esports Sponsorships
- Securing winnings with valuable prizes: Any player competing in esports competitions is looking for winnings. It’s important to make sure the prize pool is worth competing for. Offer expansive rewards such as cash prizes, event tickets, gaming toolkits, subscriptions and merchandise. All of these can be provided in appealing quotas across all tiers of players which will not only keep players more engaged but can also attract potential sponsors.
- Finding the right partners to invest in your team: Partnering with the right sponsors is a challenging task, but not an impossible one. Do your research on who’s looking to invest in the esports sector, and become a trustworthy partner for their cause. This means creating value for them with shared goals while learning their story, vision, and understanding their target audience.
- Developing a Robust Media Strategy: Building up an organic presence on the media of your choice ratings and videos, broadcasting through streaming websites and creating live events can be very effective. Growing a channel over the airwaves is also a great way to get the word out about your tournament. This can include delivering content through newsletters, podcasts, events, websites, and social media.
- Using Streaming Sites to Reach Out to the Masses: Streaming sitessuch as Twitch, Youtube, and Mixer are great platforms for reaching out to the esports audience. This can increase the exposure of your tournament and help build relationships with potential sponsors. It can also help create brand recognition and presence.
- Creating Your Own Events: Set up your own tournaments or events and give prospective sponsors a unique way to connect and engage with your fans. Using a comprehensive platform such as Eventbrite, sponsors can ensure that their mark is made at larger gaming events and tournaments.
These strategies are essential to maximize esports sponsorships and elevate the reach of esports. With the right mix of staff, target audience, online presence, and media strategy, you will be well on your way to attracting the right sponsors for your team or organization.
5. Examining the Impact of Esports on the Overall Gaming Industry
It’s no secret that esports are big business. With big-name sponsors, prize pools of millions, and non-stop streams of action, gaming is being taken to the next level – and it’s unstoppable.
LED Stadiums and the New Spectator Sports
Esports regularly takes over some of the most acoustically impressive stadiums. Dazzling light shows adorn the stage as competitors above the crowd battle it out for glory. This has never been seen before, and live competition of this magnitude has never been experienced by so many.
- Over 15,000 fans regularly attend events; and
- Although varying in size, the average event carries an economic impact of over $3.4 million.
Esports and the Traditional Sports Giants, Unite
The lines between esports and other sports are thinning as their popularity blends; evident in traditional sports teams joining in on the craze. Major teams, such as the NBA, are investing in their own leagues; and big sponsors, such as Nike, are pairing up with esports teams. Even Disney is streaming +50 specialized esport events.
- Esports partnerships with traditional sports teams alone are reported to surpass $1 billion; and
- Forbes argues that the total annual prize pool of $37 billion is more than conventional sports leagues.
Inaugural Esports Debates
Esports are increasingly being contested in high-stakes tournaments; giving rise to many laws, regulations, and ethics. For instance, South Korea is said to be in the process of passing a law to regulate the industry to prevent “unfair behavior”.
- The increasing prize money being offered by tournaments is bringing notability to leagues, tournaments, and players; and
- The age of esports players is also drawing attention; leagues and tournaments are developing regulations targeting the ethical rights of the players.
It’s become clear that esports have become a core part of the gaming industry, and the potential for revenue is nowhere close to being tapped out. As the industry continues to boom, more and more sponsors, athletes, and leagues are joining in, fueling an exciting, ever-changing market. With so much to gain, the gaming goldmine is only getting started.
6. Unveiling Opportunities for Businesses in the Esports Field
Esports have come on leaps and bounds in the last decade, becoming a prominent and well-established form of entertainment with multi-million-dollar organizations, like the Esports Business Summit, focused on solidifying the field. The industry is prevalent and growing, with no signs of stopping soon. It’s unsurprising, then, that businesses are looking to get a slice of the pie in the form of sponsorships.
For many sponsors, esports represents a chance to extend brand awareness to younger, tech-savvy audiences. According to Esports Charts’ Global Esports Audience Survey, almost a third of esports viewers are 18–25 year-olds, a valuable demographic for any sponsor. Sponsors need to strategically curate a relationship between their name and a chosen organization or team; such partnerships should be tailored to a specific event, tourney, or team, producing long-term goodwill and providing mutual benefit for both parties.
Sponsors are able to tap into the esports industry by offering support for game development, lucrative contracts, collaboration with tournament settings, and marketing events. These promotional aspects provide sponsors with a range of financial opportunities, such as prize money, gain from revenue share, and team-focused marketing deals.
When looking to collaborate, sponsors should consider various teams in different disciplines and regions to niche down their interest in the field. This approach will provide multiple chances for businesses to establish their names via various tiers throughout the esports market.
Organizations popularly partner with gaming teams through:
- Event-Based Collaborations: Events can be used to create one-off campaigns, or sponsors can collaborate through long-term sponsorships.
- Co-Branding Strategies: Co-branded merchandise is a great way to develop brand identity with gaming teams.
- Match Viewership and Player Engagement: Providing opportunities to engage with esports viewers through content campaigns and careful integration of the sponsor’s logo across all platforms including social media.
- Team Management: Negotiations of regulations, supply of necessary hardware, and technical assistance.
Esports sponsorships aren’t just a smart business decision. As the industry grows, these collaborations are necessary for the field’s sustainability. With global viewership and engagement on the rise, inventing and meticulously designing relationships with esports teams provide sponsors with ample opportunity to establish income streams, loyal fans, and an authentic connection to the world of gaming.
7. Presenting Recommendations for Unlocking the Potential of Esports
7. The prospect of thriving off global gaming tournaments, otherwise known as esports, is now a reality as more and more brands are recognising the potential of the gaming goldmine. In order for a business to maximize revenue and take full advantage of the industry, it’s essential to understand the fundamentals of the esports economy and explore the sponsorship opportunities.
Esports Economy: It’s no secret that esports has become an economically viable venture. With billions of dollars being generated from competitive tournaments which can attract tens of millions of viewers, the potential of this market is enormous. To unlock said potential, it’s essential to understand the following components:
- Esports competitions capabilities
- Esports framework conditions
- Esports ecosystem
- Esports audience
- Esports monetization strategies
These components allow businesses to assess the best times to invest and devise the most effective strategies for getting the most out of the esports industry.
Sponsorships: One of the most vital components of any esports endeavor are the sponsorships available, as these are the lifeblood of the economy. Essentially, the more events and sponsors a company offers or pays for, the more successful the venture can be. There are several ways to secure sponsorships, including direct sales and marketing, strategic partnerships, custom events, and media/channel sponsorships.
In addition, there are a wide range of incentives that companies should explore. These include free airtime or ad space, VIP tickets to major events, exclusive merchandise, merchandise discounts, among many others. Doing so can help make the most out of the sponsorship opportunities available to esports companies.
By understanding the esports economy, identifying the most suitable sponsorship opportunities, and leveraging the offered incentives in the right way, companies can unlock the potential of the gaming goldmine that awaits. Esports is no longer a mere hobby; it is quickly blossoming into a multi-billion dollar industry held together by talent, sponsorships, and fans. This golden age of gaming has certainly ushered in new opportunities— and the players of esports are the ones reaping the rewards. With the excitement of competition and the promise of success, this corner of the gaming world will likely remain a lucrative option for years to come.