Esports sponsorship has become a massive business, with the industry generating an expected $1bn in revenue by the end of 2021. Big brands including Coca-Cola, Nissan, and Samsung, as well as gaming-specific companies such as Logitech and Razer, invest in esports sponsorship. In 2019, esports sponsorship investments totalled $453m, a figure that is set to double by 2021. Sponsorship is crucial to the growth of the industry, providing funding for events and supporting players. Additionally, esports sponsorship deals provide companies access to large, digitally-minded audiences, legitimising esports as a sport.
The Evolution of Esports Sponsorships and the Impact on the Industry
Esports, the competitive playing of video games, has experienced an explosion in popularity in recent years. The industry is projected to reach $1 billion in revenue by the end of 2021, and sponsors are taking notice. Esports sponsorships have evolved significantly, and they have a massive impact on the industry. Let’s take a closer look at the evolution of esports sponsorships and their impact on the industry.
The Early Days: Companies Experiment with Sponsorships
Sponsorship in esports dates back to the early days of video gaming. Companies like Red Bull and Intel were early pioneers, experimenting with esports sponsorships to reach a new, younger audience. In 2005, Intel started sponsoring the World Cyber Games, and Red Bull hosted its first esports event in 2002. These early sponsorships were relatively small-scale compared to today’s deals, but they were instrumental in laying the foundation for the sponsorship boom that would come.
The Rise of Sponsorships and Investment
As esports grew in popularity, sponsorship and investment began to pour in. By 2015, major brands like Coca-Cola, Nissan, and Samsung were already sponsoring esports events. The same year, Nielsen launched Esport24, a ratings system that ranked esports events on par with traditional sports. This was a significant milestone because it gave sponsors a reliable way to measure the return on investment (ROI) of their esports sponsorship deals.
Alongside this, investment in esports teams began to surge. Professional gaming organizations like Team Liquid and Fnatic attracted equity investments from venture capitalists like Peter Guber and Mark Cuban. Esports team investments were made not just by venture capitalists, but by professional sports teams, as well. Philadelphia 76ers acquired Team Dignitas in 2016, while the Miami Heat invested in Team Misfits in 2017, demonstrating the growing presence of traditional sports teams in esports.
Esports Sponsorships Today
Fast-forward to today, and esports sponsorships have become a massive business. Companies of all kinds are investing in esports sponsorships, from gaming peripherals companies like Logitech and Razer, to energy drinks like Red Bull and Monster. Just in 2019, reports show that total esports sponsorship investments reached around $453 million, and this number is expected to double by 2021.
Esports sponsorships are crucial for the industry’s growth. They provide much-needed funding for events and support for esports teams. Moreover, sponsorships also help legitimize esports in the eyes of the mainstream public. For many people, seeing big brands like Coca-Cola or Mercedes-Benz sponsoring esports events adds credence to the idea that esports is a legitimate sport.
Impact of Esports Sponsorships on the Industry
Esports sponsorships have had a significant impact on the industry. They provide the funding necessary to run large-scale events, support players, and help propel esports into the mainstream. Sponsorship deals also make it possible for competitive players to earn a living from playing the games they love. Moreover, esports sponsorship deals provide brands unparalleled access to a younger, more digitally-focused audience.
As esports continue to grow, we can expect esports sponsorship deals to become more significant and more lucrative. Just last year, Activision Blizzard signed a $90 million deal with YouTube for streaming rights to the Overwatch League and Call of Duty League. These kinds of deals demonstrate the extent to which esports has emerged as a legitimate industry with a significant impact within the entertainment industry as a whole.
Conclusion
From the early days of experimental sponsorships to today’s massive deals, the evolution of esports sponsorships has been dramatic. As the industry continues to grow, we can expect esports sponsorship deals to become bigger and more significant. Esports will continue to have a significant impact within the entertainment industry as a whole, and sponsorship deals will help drive this growth forward.