The last three to five years have witnessed the exponential growth of the esports industry. Just 2 years ago in 2020, global viewership was at 435.7 million and has risen to 532 million this year. It is expected to reach way over 600 million by 2024.
In an annual report published by Newzoo, a global gaming insights and analytics company, it was found that Esports organisations were still heavily reliant on sponsorship as a primary source of revenue and it is expected that by the end of 2022 sponsorship will make up for nearly 60% of revenues coming to $837.3 million.
With the reliance on sponsorships, it was revealed that, in 2021, 63% of esports revenue was from sponsorships. With many tournaments taking place on large platforms such as Twitch and YouTube Gaming, advertisers and sponsors have a perfect opportunity. Each platform is globally popular with millions of people coming to use the platform, even outside of tournaments. Having content available via these platforms has created the space for non-gaming, game-related content. This is known as co-streaming. Co-streaming often features a player playing the game whilst simultaneously providing commentary and entertainment for the viewers. Often the player will interact with the audience via a live stream. This is becoming a part of several brands' identities leading to brands and companies such as the NBA, Netflix and Formula 1 patterning with streamers to reach a wider audience and expand their current channels.
The attempt to diversify a brand can be difficult, however, in the esports industry, many brands and teams are finding a way to attract and create loyal fans. Merchandise has always been a large part of the industry. Fans would often sport team logos along with their favourite games etc. Now, teams are becoming similar to lifestyle brands. Gone are the simple logo t-shirts. Now we see complete tracksuits, sweatshirts, bags and hats. Some teams have even partnered with popular sports/fashion brands such as Puma to create an entire line of branded apparel. Fans can also purchase digital merchandise, badges to display on profiles and more recently NFTs (non-fungible tokens). On top of this, teams/individuals have begun to set up online loyalty programmes. Many online public figures set up these types of VIP pages where fans are given exclusive content for a monthly subscription fee.
To garner a larger following, brands have also taken to creating online educational platforms. Due to many esports fans being avid gamers themselves, they are offered the chance to join and be a part of an online training school. It is predicted that by the end of this year 64 million people will have been a part of an organised gaming competition.
With the rate that esports is growing at, it is just a matter of time before it becomes completely mainstream. With the brands that are partnering and sponsoring tournament events and teams, it is clear that other people are beginning to notice what I did in 2019 – esports is an impactful and obvious investment.
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