Edited excerpts from the conversation
What’s the potential of the esports Industry?
For quite some time now, the esports industry has been growing and establishing itself as a force to be reckoned with, and businesses with advertising budgets running into the millions are getting involved. They need the viability and broad scope of their sponsorship operations. To tap into new marketing platforms, global brands from different industries are joining the esports scene. This shows esports' immersive nature as one of the ways to associate brands with new audience segments.
Has the Industry been able to attract sponsorship?
Fact of today’s digital environment is that Millennials don’t watch TV, nor do they read newspapers; they are difficult to find and reach out. More so their retention time frame is very less. You have to look at from their perspective – so much is happening around them and very fast. That’s were esports plays a major role in reaching out to them.
However, there’s a note of caution here — esports is not an Activation tool. You are launching a product and you would be tempted to do an esports event, don’t do that as it will be a disaster.
You have to see how your product fits into esports rather than vice versa and that’s where most of the Marketing Officers make a mistake. You have to see how can your brand supports the cause of the esports and its esports athletes, these marketing strategies are long term ones, not based on quarter on quarter ROIs; ROIs will come later, first help the sports grow.
How many brands have become part of Esport scene globally?
Over the years, clubs, leagues and competitions have forged automobile, beverage and food, personal care and finance alliances with brands. For example, by being the global sponsor for the League of Legends, Mastercard, which is no stranger to sports sponsorships, officially joined the Esports scene.
Although endemic brands are more embedded in the gaming experience (those that are part of the Esports ecosystem), 42 percent of sponsorships in 2017 came from non-endemic brands. The rise of these brands in the sponsorship landscape of Esports indicates the allure that Esports brings to the market, depicting youth success, female inclusivity and enthusiasm.
Mr. Lokesh Suji, Director of Esports Federation of India |
As per Newzoo:
Global esports revenues will grow to $1.1 billion in 2020, a year-on-year growth of +15.7%, up from $950.6 million in 2019.
In 2020, $822.4 million in revenues—or three-quarters of the total market—will come from media rights and sponsorship.
Globally, the total esports audience will grow to 495.0 million people in 2020, a year-on-year growth of +11.7%.
Newzoo
Esports Revenue Streams | Global 2020
Of the $1.1 billion esports revenues that will be generated this year, an impressive 57.9% ($636.9 million) will come from sponsorships. Despite holding such a high share of all esports revenues, sponsorship will grow +17.2% year on year and is on track for even further growth toward 2023.
The second-largest revenue stream in 2020 will be media rights, making up 16.9% of the global market ($185.4 million) and representing a year-on-year growth of +17.3%. While media rights revenues will grow slightly faster than sponsorship revenues this year, sponsorship’s future growth prospects are somewhat better.
Merchandise and tickets will be the third-biggest stream, taking 11.1% of the esports market ($121.7 million)—an increase of +15.2% year on year. Remaining relatively static over last year, publisher fees will generate 10.6% of revenues this year. The two new revenue streams for this data, digital and streaming, will be the smallest but fastest-growing revenue streams, respectively growing +60.9% and +33.0% year on year.
One big Example - MASTERCARD IS THE GLOBAL SPONSOR OF LEAGUE OF LEGENDS (LOL)
In the premier circle of sports sponsorships, Mastercard's presence is still felt. The brand signed a multi-year sponsorship agreement with Riot Games in 2019, making the brand the first to become the worldwide sponsor of LoL. The passion and energy of the fans that can compete with those at any major sporting event was what intrigued Mastercard to be part of the Esports scene.
Cristiano Ronaldo | AFP Photo
Cristiano Ronaldo becoming the global brand ambassador for Free Fire Game, where gamers can play as his character similarly, they had done a partnership with DJ Alok in India.
Today the music concerts are happening within these games, Marshmello concert was organized line within Fortnite Game and it had more than 10 million people who watched this virtual performance; Fortnite has done similar partnership with Indian Indian rapper and music composer, Raftaar for ‘Bhangra Boogie Cup’ – an in-game esports competition.
Now since esports has been included in Asian Games 2022 as a medal sport, it’s a great time to get involved; As a brand you can always sponsor esports athletes, create your own esports IP, or partner up with existing esports events in India; work with the Esports Federation of India to build long term strategies for your brands.
With the number of esports attracting fans, we expect that in the coming years, with multi-million dollar sponsorship contracts and media rights deals already taking place, it will develop into a multi-billion-dollar industry. Brands who want to raise visibility and loyalty to the young audiences that are difficult to penetrate are seeking esports sponsorship deals that yield great ROI. We have a massive esports community of around 200 Mn; Esports is the Future and future is now!
