While still a sleeping giant in the UK compared to North America and Asia, competitive video gaming, more commonly known as esports, is set for yet another record-breaking year in 2019. Having amassed a staggering global economy of $905.6 million in 2018, with 77% of this being generated directly (sponsorships and advertising) and indirectly (media rights and content licenses) what was once a niche hobby is now primed to compete with traditional sports’ most revered tournaments. Coupled with a 38% year-on-year growth from 2017, it is therefore apparent that esports can no longer be ignored by large sponsorship brands looking to stay competitive amongst the younger generations. It would be wise to jump on the train before it has left the station entirely.
With New Balance as title sponsors and DHL and Fanatecs as additional partners, the Formula 1 Esports Series is leading the way amongst traditional sports adopting a competitive gaming model. With over 100 million social media impressions, 20 million online video views and the 2018 Series watched by 4.4 million people, their early success is telling. Frank Arthofer, director of digital and new business as Formula 1, partly accredited this to the series’ “growing interest and engagement with a new audience. The younger generation has truly embraced the F1 Esports Series.” Comparatively just 14% of Formula 1’s regular viewers are under the age of 25, the most poorly represented age group across all viewers.
Further indication of Esports’ enormous growth was Porsche’s announcement last month that they’d expanded their partnership with iRacing to include title sponsorship of the new World Championship Series. The 10-week competition will feature 40 drivers and a $100k prize pool. Similar deals took place throughout 2018 as the automotive industry, including the likes of Mercedes and McLaren, looks to integrate itself with esports.
A break from tradition
With the esports economy predicted to reach $1.65 billion by 2021 there is a stark contrast in their rates of growth compared to more traditional forms of sport. Europe’s flagship rugby tournament, the 6 Nations, embodies this, having suffered a significant financial setback after agreeing a cut-price deal with Guinness for their title sponsorship. Though not to the same extent financially, mainstream sports such as football, the NFL and Formula One have all suffered their own setbacks as, amongst other factors, growing rates of piracy have contributed to a decline in viewing figures.
Long-term Champions League sponsor Mastercard are meanwhile looking to embrace the growing esports juggernaut, announcing towards the end of 2018 a three-year deal sponsorship deal of League of Legends. This move accompanies other renowned global brands involved in the sport such as Gillette, Adidas and L’Oréal. Despite a reported $10 million required to buy a team franchise in the League of Legends Championship Series would at first appear a hard sell for sponsors, it allowed the 2018 League of Legends Championships to offer a total prize pool of $6.45 million, close to double that of the 2018 Tour de France ($2.7 million).
Mastercard’s chief marketing and communications officer Raja Rajamannar highlighted the sentiment numerous sponsors are looking to adopt: “Esports is a phenomenon that continues to grow in popularity, with fans that can rival those at any major sporting event in their enthusiasm and energy.”
- Esports is still evolving in terms of its infrastructure, monetisation and professionalism. It is therefore paramount to gain a more in depth understanding of the sport before diving straight in.
- People are still working out how best to extract return on investment from the viewer and while this will not be solved in the very immediate future, gaining an early foothold will provide a significant advantage.
- The move to 5G and OTT platforms is only going to accentuate the opportunity for brands to engage with esports.
- Due to the variety of sectors available, ranging from the electronic version of traditional sports to high-intensity alien combat, diligence from brands around what or who to partner with is key.
While previously neglected by traditional sponsors, esports has been around for a long time: it has evolved and emerged as a valuable sports marketing vehicle. Sports marketing expertise is needed to bring professionalism and further commercialisation to what is currently a generally unstructured part of the industry, and brands must adopt and expect the unexpected from a hard-to-reach audience.
With Premier League Clubs searching far and wide for the next esports star to compete in the ePremier League and the UK government committing £4 million through a broadcast focused grant, esports is set to break further ground within the traditional UK sporting landscape in 2019. Not only does it represent a unique platform for brands to tell their story, it allows for a whole new type of engagement. Whether it is playing with your favourite footballer, driving a Formula 1 car or battling on an alien planet, as highlighted by Gfinity’s Gary Cook:
“The consumer has decided. 2.2 billion people. This is a cultural revolution. We haven’t even started with augmented reality. This world is about to explode.”
To learn more about the opportunities with esports, please get in touch with Mallory Group Director James Toller.
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