Brands Investment in Esports Is In All Time High and Growing

By Team MyNation  |  First Published Jul 9, 2021, 12:41 PM IST

The esports industry has captured the attention of celebrity athletes and superstars, many of whom can attract hundreds of thousands of people to a single broadcast.

Esports, an acronym for electronic sports, is a term that refers to spectator-watched competitive video gaming. The tournaments are conducted in big venues often reserved for professional sports events, such as the Staples Center in Los Angeles and the Barclays Center in Brooklyn. Furthermore, similar to conventional sports, esports include a diverse range of genres, ranging from first-person shooter games like "Counter-Strike" to multiplayer online battle arena (MOBA) games like "League of Legends."

Twitch and other massively successful broadcasting services have successfully brought gaming and esports into the spotlight. The esports industry has captured the attention of celebrity athletes and superstars, many of whom can attract hundreds of thousands of people to a single broadcast.  pThe esports industry will keep expanding, and this development will occur when conventional television's reach is in a diminishing phase. The magnitude of the esports audience — which is projected to reach 600 million worldwide consumers by 2023 — should motivate marketers to take notice. What keeps this market so appealing is its unmatched ability to reach youth, ad-blocking consumers who are difficult to attract via conventional media. Esports represents a sizable and significant potential for companies with the foresight to seize it.

While brand advertising and sponsorship provide a large share of revenue to the esports industry's growth, broadcast rights, ticket sales, and game publisher fees all factor significantly, global esports income is expected to reach $2.1 billion in 2023, increasing 131% from $906 million in 2018. To put this in perspective, the NFL, MLB, and NBA earned more than $10 billion in 2017. Still, these conventional sports organizations have benefited from decades of development in esports, explaining the difference.

Advertisers' methods for reaching esports audiences

There are many ways for businesses to connect with esports enthusiasts. A brand’s ultimate objective largely determines the choice in reaching esports viewers — a brand seeking to generate interest for an upcoming product release may opt for esports TV advertisements or sponsored shout-outs. In contrast, another company seeking general brand awareness among millennials may become a league's primary sponsor. Of course, corporations may combine sponsorship and marketing and explore which strategy produces the most significant business results. 

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Brand Sponsorship in eSports

Brands may support esports teams, leagues, and events to get exposure to professional gaming enthusiasts. Sponsorship income is expected to contribute 40% of esports income, exceeding any other revenue stream, demonstrating how often companies collaborate with esports stakeholders such as squads, gaming companies, and tournaments to reach esports consumers.   To focus their sponsorship inquiries, companies should turn to the most professional esports games. Esports games accessible on Computers may be ideal for companies to begin their outreach to esports enthusiasts since PCs are the most popular gaming platform in the United States. About 55% of US esports enthusiasts play games on PCs, compared to 35% for Xbox One and 35% for PlayStation 4. Brands may use the success of specific esports games to engage their followings via in-game activation — the NBA 2K League's clubs, for example, have offered in-game virtual jersey sponsorships — or by the support of prominent esports events and teams.

Famous esports tournaments are usually organized by the publisher of the game or by a third-party event organizer. Riot Games is an illustrative example since it arranges "LoL" tournaments like the League of Legends Championship Series. The ESL is one third-party organization that conducts such tournaments, such as the Intel Extreme Masters for games such as "CS: GO" and "StarCraft II." As of May 2016, Riot Games was the market leader of event organizations and the percentage of esports watching hours on Twitch. From August 2015 to May 2016, the creator of League of Legends accounted for 28% of all esports content viewed on Twitch, followed by ESL (23% ) and Dreamhack (11% ).

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