Esports: a decade ago, that term evoked images of nerds playing HALO on their Xbox in Mom’s basement. Not anymore. Today it’s a billion dollar industry that continues to grow at immeasurable speeds. It is expected to reach $1.5b by 2020. According to marketingweek.com, last year alone, 588 notable eSports tournaments took place across the world, disbursing $112m in prize money. Together, they generated at least $59m in ticket sales alone. That’ an 85% increase on the previous year’s number. Eager sponsors are standing at the gates, cash in hand. They are expected to pour some $360m in sponsorship deals this year alone. (The image evoked by the term “watersports” has not changed, however. Google it)
Esports has progressively grown out of the relative obscurity it enjoyed by the mainstream sports market to challenge the physical professional sports industry directly. We’ve already covered how real-world sports leagues are now partnering with their digital doppelgangers. The same phenomenon can be observed with sponsorships.
While it used to be that more established esports tournaments like Starcraft or CS: GO attracted industry-specific sponsors (usually tech or gaming companies, etc), there is a noticeable trend of globally recognised firms pouring money into tournaments, players and advertising.
The global logistics firm DHL, for instance, is just the latest in a line of other companies including Mercedes-Benz and Vodafone to officially partner with ESL, the World’s largest Esports network. Across the pond, State Farm, the US-based insurance giant announced a partnership with the NBA’s digital counterpart, NBA2K while its competitor, GEICO partnered with TSM.
Adding to the aesthetic veneer of real-world athletic comparisons, ADIDAS, the sportswear designer famous for dressing the likes of soccer legends Lionel Messi and Julian Draxler will now be fitting out the players of NORTH, the Danish CS:GO, team. In case you’re wondering why computer-game players need athletic wear, it actually makes sense. While soccer players love to fake leg injuries, carpal tunnel syndrome is real.
So why are international brands suddenly pouring so much money into esports? after all, it’s not a real sport like football or Estonian wife-tossing. Let's be honest, professional sports have always been about money. Higher and more consistent sponsorship revenue helped the National Hockey League (NHL) beat out the World Hockey Association (WHA) to become the sole major hockey league. These same reasons prevented the Donald Trump-backed United States Football League from seriously challenging the NFL’s dominance over major league football. The ability to attract the right sponsorship deals can go as far as to make or break the viability of even an entire sport at the professional level. There is a reason why Hockey, and not Chess-Boxing (yes, that exist, and it’s exactly what you think it is), gets so much more airtime on Canadian television networks.
Esports has proven to be the new Eldorado for sponsors where brands can expect huge returns for exposure. Esports advertising is expected to generate $173.8m, while broadcast rights deals will bring in a further $160m.
The digital platforms on which these esports leagues are built can also be a source of interest for sponsors. Twitch, for example, has pioneered innovative methods of creating multiple revenue streams for sponsors by tweaking its own platform.
The space for innovation isn’t only limited to the tech, however. The entire genre is ripe with opportunities to create unique and immersive viewing experiences for tech-savvy millennial esports audiences. Brands are definitely noticing.
There you have it, next time mom tells you to get a life and play some real sports outside, you would be totally justified in responding: “but maaammm, ‘ Hello Kitty Island Adventure’ IS a real sport!”