Esports are still relatively new when compared to the likes of traditional sports. Despite its infancy, esports has developed parabolically into the multi-billion-dollar industry that it is today. The majority of that is thanks to the recent trend towards social acceptance of a professional career in the esports scene, both as a player and an individual involved behind the game, and the rise of popularity of competitive matches in these coveted games. Whether it’s been around for a while like Starcraft or the original Counter Strike games, or it’s a game that has only come out this year like Pokemon Unite, more and more people are flocking towards streaming platforms to watch professional players and to learn from those that are better than them. As a result, there are multiple ways that esports can provide sponsorship opportunities that are beneficial to the companies providing them. Esports truly is a ‘melting pot’ of different demographics that share one thing in common: a passion for video games.
Now that most people have grown up around video games (to some extent), video games and the cultures surrounding them have become more and more welcomed and even encouraged. In fact, every year there are more college and university campuses that create their very own varsity esports teams to compete in various titles and have even begun awarding scholarships for applicants looking to pursue these professions. It might seem strange that this is what our world is turning into, but it’s not going to stop (or even slow down) anytime soon.
Every year that passes since esports truly grasped mainstream medias’ attention (arguably 2013), youth and young adults have swarmed to these environments in the millions and game developers are taking notice. Since 2013, every year there are more games being released that have opportunities for competitive play with the hopes of an esport being birthed. Games like Rainbow Six Siege, Rocket League, PlayerUnknown’s Battlegrounds, and of course Fortnite, have all become incredibly successful esports despite being ‘un-conventional’ genres to produce a competitive esports scene. Before the rise of these games, the vast majority of professional esports scenes were surrounding games like Counter Strike, Dota, League of Legends, Call of Duty, Quake, and World of Warcraft, which all shared some core mechanic that would breed ‘player-v-player’ competition. It wasn’t until League of Legends reached mainstream media coverage consistently that esports really turned the corner into the spotlight, because unless you were heavily invested in one of these niche games, you’d have no idea these esports scenes existed. Many will point to League of Legends 2013 World Championship as that catalyst for the industry because the final match filled the Staples Center with fans and drew in millions of fans from around the world online. It wasn’t until people realized the sheer presence these games (and specifically their respective esports scenes) had that companies started to see the potential opportunities with sponsorship deals and advertisements. In 2016 analysts predicted that the esports industry would generate over $1 billion in revenue in 2019. Now that 2019 is in the past, we can see the actual growth trajectory of esports as that number was surpassed in 2019. Although the growth is only slightly better than the estimates, the influx of investments upwards of $4.5 billion in 2018 alone suggests this industry will grow even more rapidly than previously thought.
What Makes Esports so Popular?
A big reason for the confusion behind the popularity of esports is that these games transcend most significant demographic barriers that other pieces of content or media simply cannot. Think about it this way, how many people in Asia watch American football? Not a lot, and that’s presumably because American football is not popular in Asian culture. What about hockey? Well, hockey requires ice and a cold climate, therefore since most countries don’t really have cold climates, there isn’t any reason for them to culturally adopt a sport like hockey. In northern Europe, USA, and Canada however, Hockey is very popular for obvious reasons. The difference with esports is that the games popular enough to establish professional esports scenes have global outreach because they are culturally malleable and more accessible than any sport can and will ever be. The problem with traditional sports at the professional level is that they are usually only followed closely by those that followed that same dream of becoming a professional player in their sport. As a result, these traditional sports tend to have class discrepancies in their audiences depending on how accessible the sport truly is across locations and demographics. Again, going back to the example of hockey, while it’s true that hockey only has any cultural significance in a few countries, within those countries, the competitive leagues have even less significance because people can only pursue these passions if they have a significant amount of money to indulge in this hobby.
Continuing with the example of hockey in Canada, for a child interested in playing in an organized environment, their parents will on average, cough up anywhere between $2000-$2500 to gather the appropriate equipment and to pay for the ice time for the season. Essentially, the price of entry to this sport is $2000 and there’s the chance that the kid doesn’t even enjoy hockey and the money goes to waste. Furthermore, before participating in a hockey league, parents will likely want their child to learn to skate first, which itself in Canada can cost anywhere between $40-$60 per hour! Obviously the price to even consider this sport is quite steep, and when you get to the point of wanting to pursue this passion, more competitive levels can cost anywhere from $6000-$7000 for the proper equipment and season of ice time and fees associated. When prices to pursue a sport become this significant, it’s no wonder there are so few that get to pursue their dreams as professional players, and even fewer are interested in the results of these professional games. Don’t get it wrong, there’s definitely an audience for these major sports leagues, but when broken down like this, it’s easy to understand how much bigger these audiences can be if these sports were more accommodating. That’s where esports comes in.
If we take the same example of getting a child to play in an organized environment in esports, the prices associated are much lower. While they can certainly summate to high values, the things you are paying for to pursue these hobbies are things you are already likely paying for! Especially with an ongoing global pandemic, internet has practically become an essential service for most of the developed world, and with it, people have decent computers that can run many popular games. Sure, internet speeds and computers can be upgraded at a steep price, but the same argument can be made for traditional sports. Really, the only cost for a child to join a league in esports, is the price of the game (if there even is one!) and the cost of joining the league! For consistency, in Canada there are some organizations that are promoting esports in youth by offering free entry into their leagues. Adults can even participate with friends in online tournaments for as little as $10 per team! What this means is the barrier to entry is much lower in esports and has created an international ecosystem of people that share passions and hobbies together. These people are incredibly passionate about their communities and hobbies and want nothing more than to continue doing what they enjoy doing!
What does this mean for Advertisements and Sponsorships?
Obviously, this diverse population of gamers can be either a blessing to advertising or a curse depending on how you look at it. While the concern that not having a distinct, identifiable target audience may be tricky to advertise to, the industry is incredibly passionate and easily the best way to reach new audiences for a brand. For example, a western brand looking to expand and engage with eastern countries like China, can easily do so through esports advertisements. In 2019, China led all regions in esports revenues, and traditionally, Chinese consumers enjoy quality western brands. Not only does this diverse group have the potential to exponentially grow businesses, but the audience is incredibly passionate towards brand involvement in esports! About 58% of professional gaming fans have a positive attitude towards the brands sponsoring their favorite teams, players, and leagues!
Another tricky spot for advertisers is the millennial group. With millennials making up a large percentage of most brands ideal audiences and having one of the lowest consumption rates of typical media outlets like television, radio, newspapers, etc., brands will be happy to hear that millennials make up almost a quarter of the esports market.
It’s clear that the outreach potential for sponsorships and advertisements in esports is incredible, however it must be emphasized that brands don’t need products intrinsically involved with esports to be successful. While seeing advertisements in esports for telecommunications companies, soft drinks, and snack brands are common, some of the biggest (and perhaps smartest) advertisements are not from those obvious choices. One of the greatest examples is Mastercard. Mastercard is one of the biggest sponsors of the biggest esports event every year, the League of Legends World Championship and even sponsors the opening ceremony before each World Championship final. For perspective, in 2018, this event drew in 205 million unique viewers across platforms and broadcasts. One first glance, Mastercard doesn’t seem like it would want to be involved advertising for a young audience that doesn’t have a lot of money, however, what they are doing instead is establishing their brand to the eyes of these consumers that are around the age of getting their first credit card, or at the age where they may need a new credit card, etc. As previously mentioned, esports consumers have a positive attitude towards the brands sponsoring their hobbies and Mastercard is using that to their advantage perfectly!
Overall, this market is growing rapidly, and sponsoring companies will not only grow their own brand, but also grow the esports market as well. Esports is perhaps going to be the biggest method of advertising in this decade like social media was in the last. The growth of this ecosystem is only just beginning and brands that understand this will be able to use it to their advantage!