To say that e-sports is a trending industry is no lie, but perhaps a half-truth. E-sports have been “a thing” for a few years now, back in 2015 the industry was already valued at a staggering 450 million dollars. However, we can’t deny that this type of gaming has continued to grow unstoppably and exponentially. In fact, it generated 1.1 billion dollars in revenue during 2020. Moreover, the COVID-19 pandemic has fostered a super-digitalisation process that, together with seasonal lockdowns, has speeded up the pace of growth even more.
However, are we actually in the clear on what e-sports in fact are? E-sports are video game championships – online and/or in person – in which professional players compete for financial prizes and prestige. This type of game has been around for decades, but, thanks to technology, in recent years it has grown in popularity, attracting massive investment and a large volume of fans worldwide.
As such, although the debate as to whether or not we should consider e-sports as a real sport is still open, some governments, such as the American and German governments, already see professional players as athletes. Moreover, more and more traditional teams, for example Real Madrid or Barcelona C.F., have their own e-sports teams.
In fact, the International Olympic Committee (IOC) is currently considering whether to include this discipline in the Paris 2024 Olympic and Paralympic Games. This is mainly due to two reasons: on the one hand, professional players undergo high-intensity training comparable to that of elite athletes; on the other hand, e-sports are very popular among young audiences. However, only sporting games that comply with Olympic values, such as football, will be allowed into the competition, unlike games promoting violence or fights.
A loyal and committed audience
Before considering any strategy, it is crucial to have a clear understanding of the e-sports audience, which now exceeds 500 million people worldwide. The socio-demographic profile is mostly millennial males (between 25 and 35 years old).
A key characteristic pertaining to the e-sports audience is that they, as a whole, are no stranger to, and avid users of digital tools and social media from an early age. Given the previous, therefore attach great importance to the notion of digital community. This audience is, in fact, very loyal to their online environments, making them a relevant target for brands seeking to increase engagement and loyalty.
The e-sports ecosystem
In order to understand the e-sports ecosystem, one only needs to look at traditional sports (football, basketball, hockey…). At a professional level, each sport has players, teams, tournaments, national and international competitions, sponsors, broadcasters… and in the world of e-sports it is no different. The only difference is the former are played face-to-face, involving the whole body, while the latter are played online and only require the use of hands.
- Publishers and platforms
They are the main players in the sector as they own the intellectual and industrial property of the video games. In fact, the only official championships are those organised by publishers. Players such as Electronic Arts (FIFA), Sony Interactive Entertainment (Gran Turismo), Riot Games (League of Legends) or Activision Blizzard (Call of Duty), among others, belong in this group.
Just like any online broadcasting, e-sports also require a dedicated channel. In the case of e-sports, the main platforms for distributing online content and video game competitions are Twitch – owned by Amazon – and YouTube Gaming (Google).
In Spain, given the growing popularity of e-sports during the last few years, some TV channels have echoed this phenomenon in dedicated shows, such as Gamers (MTV) o the reality show Top Gamers Academy (Atresmedia and Neox).
- Professional teams and players
The teams are generally owned by limited liability companies that hire players in order for them to compete in leagues and tournaments organised by promoters. There are an estimated 250 professional players in Spain, including names such as Goga (Daniel Romero), Thalai (Javier Domínguez) and VorwenN.
The most noteworthy professional teams in Spain are Vodafone Giants, Movistar Riders, Cream Real Betis or S2V e-sports. As one can observe, many of them already have a main sponsor after whom the team itself is named.
The role of promoters is to make competitions happen. In Europe, some of the most remarkable promoters are LVP (League of Legends Superleague or Counter Strike-Global Offensive Unity League), ESL (ESL Masters of Warcraft III) and some publishers who also act as promoters (like FIFA with eLaLiga Santander).
Events are a major asset of the e-sport ecosystem and, even if competitions usually take place online, physical events also play a fundamental role (although their relevance has decreased during the last year due to COVID).
In addition to specific events for video game competitions such as the LoL Championship Series Europe or the Final FIFA eChampions League, there are also video game fairs, festivals and LAN parties.
As in most industries, advertisers nourish the system through their investments. In the world of e-sports, sponsors can be classified into two categories. On the one hand, there are endemic sponsors, whose product is directly related to the gaming industry, such as computers. They are more easily integrated and accepted by the public and include brands such as Acer, HP and Intel. On the other hands, non-endemic sponsors have products which are not directly linked to the sector. Here we can find brands of all kinds: Domino’s Pizza, Red Bull, El Corte Inglés, L’Oreal…
The arrival of sponsors
Sponsors are, in fact, one of the main drivers of the e-sports ‘boom’. Sponsorship and advertising already account for almost 60% of e-sports revenues, which add up to more than 645 million USD worldwide.
Unlike many other digital environments, e-sports are indeed brand-friendly: users perceive the arrival of new sponsors (and advertising in general) as positive. E-sports fans know that, if brands enter the e-sports ecosystem, the industry’s revenues increase, thus providing more entertainment options for them (teams, tournaments, events, competitions, games, etc.), with the enormous opportunity this represents for advertisers.
The integration of brands in e-sports comes in various forms:
- Team, tournament or event sponsorship. This is a common approach to advertising where advertisers agree with partners for their brand to be shown to users during competitions through naming, merchandising, clothing or other elements. Telecommunications companies sponsoring teams (Vodafone Giants and Movistar Riders) is the most obvious example. On a more specific level, Philips One Blade has also been present in some events through different activations at the Final Iberian Cup or the Gamergy Madrid event.
- Becoming an official ambassador for a professional player. As in regular sports, there are brands that sponsor players by entering into a collaboration agreement. For example, milk brand Puleva sponsors Alejandro Alguacil and his team – Arctic Gaming -, with whom they have developed various activations.
- Branded content. Together with a partner, promoter, player, team or tournament, brands can develop content that is of interest to their target audience. For example, our clients Domino’s Pizza developed a documentary — Domino’s Original — about the life of renowned streamer and e-sports speaker Ibai Llanos.
- Digital advertising in broadcasting platforms. As in any other social channel, Twitch’s and Youtube’s advertising platforms allow for brands’ ads to be shown before, during or after e-sports content.
- Gifted product. This type of integration is limited to endemic brands: it consists of an in-kind collaboration in which a partner gives a brand visibility in exchange for computers or gaming materials. For example, through activations featuring products of their Omen line, HP positioned their products as the most gaming-friendly devices.
- Product placement. Whenever possible, brands can be included in player-generated content through product placement. It also works the other way around: e-sports content can be reflected in the product itself. For example, FontVella launched a line of exclusive water bottles featuring 4 of the top e-sports teams in Spain: MAD Lions E.C., Team Queso, Vodafone Giants and x6tence.
Should my brand invest in e-sports?
Data shows that the e-sports market is growing, but its activity is still niche and not yet massive. Therefore, it is not a decision that should be taken lightly. Moreover, just like with sports sponsorship, these kinds of partnerships usually require a significant financial investment and a large volume of resources.
E-sports strategies must be long-term, so it is pointless to enter the market for just one campaign. Successful brands have worked their way into the ecosystem taking one step at a time and building their own community gradually, just as teams do.
As it is a long-term strategy and there are several agents involved (leagues, championships, teams), investment tends to be high, although it is also scalable over time. These strategies may involve expensive sponsorships, branded content production or even setting up owned channels within the brand’s digital galaxy.
Brands that enter the e-sports market are usually aiming to reach specific goals that are harder to achieve in other digital environments:
- Digital transformation and innovation: Some brands see e-sports as an opportunity to adapt to the habits and behaviours of the young, hyper connected consumer. Brands who invest in e-sports are also seeking to position themselves as innovative and pioneers by entering an unsaturated ecosystem.
- Rejuvenating their audience: Several brands are aiming to gradually reduce the age range of their audience, and view the e-sports fan base as the ideal ecosystem to achieve this goal.
- New communication platforms. Brands are constantly looking for new channels to communicate with potential customers. E-sports has made widespread use of new channels, such as Twitch, which can serve this purpose.
A long-term ROI
As with most sponsorship tactics in other markets, the main KPIs for success tend to be very high up the funnel (branding, awareness, reach, engagement, top of mind) with the exception of some endemic brands that may be able to drive conversion and sales in a more organic way.
If your brand is looking for quantifiable, short-term results, you may be going about it the wrong way by betting on e-sports. If a brand wants to be perceived as an ally by e-sports fans, it should make sure the audience understands what its purpose within the gaming ecosystem is. E-sports mean community, and, as in any community, creating trust and engagement takes time. The good news is we have plenty of time: e-sports are here to stay.