eSports Sponsorship Insight – April 2016

May 4, 2016

Tags: , , , , , ,

Categories:Analysis, Industry, Insight, Marketing, Sponsorship, Sponsorship Report

The eSports Sponsorship Insight is a monthly report containing analysis, perspective, and news on the world of eSports sponsorship. The report is published by eSports Group, a leading eSports consulting agency based in Washington, DC. For more info, please visit http://www.entivagroup.net or contact us here.

Profile | ESL Struggles with Hypocrisy

The Electronic Sports League (ESL), a leading competitive video game events company, released a statement to GamesBeat on the ban of Team YP, a Counter Strike Global Offensive (CSGO) sponsored by adult video site, YouPorn. According to VentureBeat, the decision followed multiple offers by Team YP to rebrand. The statement:

“Advertising pornography is not legal in the markets we operate in, and the vast majority of partners we’re working with have strict ‘no drugs, no alcohol, no pornography’ rules that we’ve contractually taken on board. These aren’t new rules but ones that have been in our rulebooks for a long time. We have spoken to Team YP manager earlier this year, and in that conversation we’ve explained the situation and rules in detail and offered to look for potential alternatives in a bigger group. At the same time, we’re consulting with our legal teams about this. We will inform the team and the management as soon as we have any updates.”

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Figure 1 – Courtesy of The Telegraph

While ESL’s decision aligns with a standing policy on adult material, it also directly contrasts an implied stance on illegal gambling. The CSGO community has long benefited from the popularity of betting on professional matches using digital items, called skins, as currency. In turn, online platforms, like CSGO Lounge, which facilitate exchange of skins for real money, are fueling an underground scene rife with unregulated gambling by minors; a commonly accepted fact in the eSports world. So much so that Bloomberg published an expose on the topic. Yet, ESL continues to turn a blind eye to teams sponsored by CSGO Lounge. Mostly since this form of betting generated an estimated $2.2 billion in 2015 in addition to untold levels of viewership and interest in professional matches.

As a privately held business, ESL maintains the right to exclude various parties from participation in its events at its own discretion. And while operation of third party betting sites is outside ESL’s jurisdiction, the form of betting typified by CSGO Lounge is clearly illegal. However, it also creates significant interest in competitive events, creating a clear conflict of interest. ESL is not the first or last enterprise in the domain, to face a similar paradox. Especially as more non-endemic brands associated with age-sensitive products enter the eSports marketplace, see: Update on Bud Light, below.

In the case of Team YP, ESL seems to conveniently overlook direct association with underage gambling, which is also illegal in its markets of operation, in favor of pursuing low hanging fruit. Unfortunately, while complicit support of CSGO Lounge might be profitable over the short term, it’s not sustainable. For instance, debut of Turner’s ELeague could potentially shed more light on the illegal gambling underworld in eSports. This is potentially hazardous as all gambling is widely illegal in the United States, which, should regulators decide to make a point of CSGO, could lead to the tide turning quickly across the world; a prospect which would threaten the commercial interests of ESL far more than an adult company sponsoring a team in pursuit their eSports dreams. Before that occurs, ESL has the opportunity to step forward as an early catalyst for change, as opposed to silent partner.

Strategy | Beverage Brand Battleground

UK-based Team Infused reached a multi-year deal making Rockstar Energy Drink their “Official Drinks Partner.” The agreement marks Rockstar’s latest sponsorship of an eSports team, although it’s not clear what type of exposure and/or product placement it will receive. The sponsorship also highlights the arms race by beverage brands within the competitive video game industry. Rockstar joins mainstays Coca Cola, Monster and Redbull, plus recent newcomers Brisk Mate (PepsiCo) and Hype Energy Drink. Activity which points to eSports becoming a point of strategic interest for beverage brands across the world.

The notion of soft drink beverages, particularly the caffeinated variety, has been linked to video games for years. Mountain Dew was an early partner of Major League Gaming (MLG), dating back to the early 2000’s. However, prior to the emergence of eSports and pioneers like MLG, gaming was amorphous. Popularity of individual game titles was unpredictable, and outside of major publishers there were few partners who could facilitate marketing programs. However, continued growth of competitive gaming organizations, leagues and tournaments, have fashioned a class of potential brand associates. And similarities to traditional sports have accelerated sponsorship activity.

So it’s no surprise to see beverage brands pour into the burgeoning competitive scene at a rapid pace. A 2015 study by Mintel showed energy drink consumption among U.S. millennials increased from 55% to 61% between 2014 and 2015. In parallel, carbonated soft drinks have suffered from a rise in negative perception. These shifts have led to more alternative options such as craft sodas and energy shots. As a result, beverage brands are looking for ways to cut through the noise and capture consumers across an increasingly differentiated marketplace. Electronic sports offer a cost-effective, uncluttered sponsorship platform to accomplish just that.

The challenge will be mapping sponsorships to measurable results. For example, if increased sales are a success metrics then beverage brands that are subject to regional availability, won’t benefit as much from the immediate global reach of eSports. However, given the low barriers to entry and competitive tenor of the beverage market, it wouldn’t be surprising to see the current class of brands maintain or grow their presence in the space, moving forward.

Update | April 2016

The beverage onslaught on eSports continues, this time it’s beer, with Bud Light announcing an All-Star series. The North American brand must navigate 21+ age restrictions for its product among teenage heavy demographics. More importantly, the program will need to resonate with the audiences of drastically different game titles, at once.

Bud_Light_All_Stars_Capture

Figure 2 – Courtesy of Gamespot

Another non-endemic brand finds a home with OpTic, as Turtle Wax partners with the competitive gaming organization. On the heels of its Brisk Mate sponsorship, OpTic continues to show willingness to court corporate partners. It will be interesting to observe how effectively the franchise provides sponsor value over term of the agreements, which were unannounced.

CounterLogic Gaming (CLG) and Astro Gaming are joining forces in a reported product development partnership. With commitment to improving the sport of gaming at the heart of this move, #AstroLogic is positioned to produce game changing accessories.

MadCatz, a leading sponsor in the fighting game scene, is cutting back by dropping two players and title rights for the Capcom Pro Tour event at the Tokyo Game Show. The company has recently experienced a slump in sales, leading to a 37% workforce reduction.

Electronics company LG Australia captured title rights for competitive gaming organization, Dire Wolves. A range of LG monitors will be the focus of giveaways and promotions, the release stated.

Leading eSports franchise, Fnatic, and ophthalmic optics company, Essilor, unveiled an immerse game experience to promote the latter’s Eyezen lenses. Titled, Eyezen Challenge, the campaign is an example of how brands and eSports organizations can collaborate to produce compelling activations for the competitive video game world.

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