The esports scene has never been so big. In 2020, competitions generated more than $1 billion of revenue and attracted more than 500 million viewers. Professional gamers raise the standard of play time and time again, pushing the boundaries of what is possible. As the competition among esports athletes heats up, so does the competition among the brands that are involved in the industry.
Just like with any other cultural phenomenon that becomes popular among large swathes of the population, esports has begun to attract many of the biggest brands who are clamoring to hand over large sums of money to associate themselves with athletes, games and events.
Almost every week, we get new reports of a big brand handing over cash to get involved with an esports competition. In recent months, the yogurt drink brand YOP announced it had penned a deal to become the title sponsor of the Inter-Borough Esports Championships in London. Meanwhile, this January, the leading lollipop brand Chupa Chups announced that it had teamed up with Excel Esports to create unique content and be featured on the player jerseys.
This put them in the same league with other major brands, including Intel, Red Bull, Monster Energy, Marvel Entertainment, IBM, Capcom, Sega, Levi’s, Renault, and OnePlus. Some of these sponsorship deals run into the hundreds of millions of dollars.
Red Bull is the biggest spender in the industry. The company first got into esports way back in 2006 when it signed the Halo player David Walsh. As of 2021, the Austrian company has invested nearly $600 million into esports. This pales in comparison to its investments into other areas. The brand’s lead Formula 1 team’s annual budget is currently over $300 million, but it spends nearly double that because it actually has two. The gap is closing though, and the company’s big pockets are driving up the spending across the entire industry.
The Effect of Sponsorships in Esports
With so much money pouring into esports, the organizers have seen their budgets grow and grow over the last five or so years. This has translated into more professionalism in esports, with teams and athletes now acting very much like they would in any other top-tier sport.
This has meant events have gone from tiny affairs, often held in a small room or hall, attended only by absolute die-hard gamers, to huge extravaganzas held in massive stadiums. Teams and players have to be akin to professional sportspeople. They must be disciplined, act like brand representatives, wear the correct clothes, use the correct equipment, and ensure they behave appropriately in front of the cameras.
And those cameras have changed as a result of the growing interest in esports. Previously, they may have been for small broadcasts to a handful of people on the internet or perhaps the local press. But today, those cameras belong to major TV networks like ESPN and the BBC.
Positive Feedback Loop
Television coverage of esports means more eyeballs trained on events. More eyeballs means more exposure for the brands that sponsor them. More exposure means more brands are interested in getting involved. And more interest means the price of sponsorship goes up.
As has already been touched upon, this increased flow of money means that the spectacle of an esports event gets improved, which in turn increases the number of people that want to watch. Therefore, esports currently finds itself in a positive feedback loop that is driving up the value of sponsorship deals and attracting more spectators.
New Industries
Initially, sponsors were typically tech brands and video game publishers. These were the most logical brands to get involved, as they were promoting products that gamers would be interested in.
Over time, the variety of companies interested in getting involved has grown. Now, lifestyle brands, drinks manufacturers, and even car companies have got in on the act. The same can be seen in traditional sports. Teams in the English Premier League are sponsored by companies from a wide range of sectors including insurance providers, iGaming brands, watch manufacturers, airlines, banks, and sportswear companies.
As esports continue to mature, we’re likely to see the variety of sponsors increase, which will increase competition even further.
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