eSports Sponsorship Insight – May 2016

June 7, 2016

Tags: , , , , ,

Categories:outlook, Sponsorship, Sponsorship Report, sports

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 | Comcast Xfinity

Note: This announcement occurred on June 3rd but is included in May’s sponsorship report.

Announcement of Comcast Xfinity’s partnership with eSports organizer, Electronic Sports League (ESL), and gaming club Evil Geniuses, marked the entrance of yet another non-endemic brand into the world of competitive video games. While 2016 has been an eventful year for non-gaming companies getting their feet wet with eSports, there has also been a shift in the traditional classification of sponsors.

Typically, PC and console focused brands such as Logitech, Razer and SteelSeries were considered endemic eSports sponsors; as they represent a core group on which the play of video games depends.  However, the continued emergence of connected, competitive gaming, a.k.a. eSports, is expanding this class to include a new variety of brands.

Conventional wisdom says that Xfinity is a non-endemic brand. Since, by simple definition, it isn’t necessarily core to gaming. Yet, closer examination reveals that the foundation of geographically distributed video game competition is built on high speed internet access; shifting the category closer to an endemic classification. In fact, widespread high speed internet access has long been a key driver in the growth of the eSports phenomenon.

Other categories are also on the verge of becoming core to the competitive play of video games. Brands such as Gamma Labs’ GFuel are leading the emergence of ingestible products targeted at improving gamer performance. Similar to how companies like Gatorade emerged as endemic to traditional sports, these eSports focused brands will continue to do the same.

However, logical shifts in classification are useless without winning consumer acceptance. After all, the main value of endemic classification, especially in eSports, is being considered “native” to the experience. Brands like Xfinity must earn trust to achieve such.  Courting partners, like ESL and Evil Geniuses, will aid considerably, but the ultimate measure of endemic authenticity is consistency over time.

Strategy | Locating eSports Sponsorship Value

Team EnVyUs, one of the top gaming organizations in North America, officially inked a seven figure deal with Charlotte venture capital (VC) firm SierraMaya360. While EnVyUs is not the first organization to settle in a North American city, it is the first to do so as part of a round of VC investment. More so compelling are plans to construct an entertainment facility that will serve as a multi-purpose destination site.

“We want to create a venue where people can enjoy the sport,”

— EnVyUs team owner, Mike Rufail, on making Charlotte an eSports destination

Previously, the fact that eSports organizations weren’t tied to a specific physical region, has counted as strength. However, with the advent of newly minted eSports TV broadcasts, such as Turner Sports’ ELeague, in which EnVyUs competes, team organizations are recognizing the value of expanding their footprint as competitive entertainment properties.

However, translating the increasing popularity/reach of these organizations, specifically among highly desired demographics, into sustainable, profit-generating enterprises requires new avenues for return on investment (ROI). Regional affinity offers tremendous advantage in building the partnerships and revenue generating channels necessary to take team business in eSports to the next level.

local_esports_teams

While electronic sport will continue as a digital native, e.g. all teams won’t be forced to locate to a city. Following the money in eSports reveals that today’s teams don’t receive income from media rights, revenue sharing with leagues, or event proceeds. With merchandise sales not yet a stable outlet, this severely limits overall financial prospects. Plus, relying on performance and sponsorship-based revenues is not a sustainable growth model.

On the other hand, establishing locality opens the door to badly needed monetary returns which would be otherwise inaccessible, see figure above. Additionally, integrating eSports teams into specific physical regions will speed overall cultural acceptance of competitive gaming. In the same way that seeds for today’s traditional sports business were planted locally, eSports will benefit from the presence of ambassadors, like Team EnVyUs, in local communities.

Update | May 2016

The convergence of traditional sports and eSports revealed a new wrinkle with the partnership between HyperX and NBA star, Gordon Hayward, whose stance on eSports has been widely applauded within gaming circles. Hayward isn’t the only professional athlete to identify with competitive video games. Demetrious “Mighty Mouse” Johnson, UFC’s flyweight champion, has expressed desire to build a career livestreaming video games. Ricky Lumpkin, defensive end for the NFL’s Indianapolis Colts, also joined gaming organization, FlipSid3 Tactics. Look for the merger of athletic celebrity and gaming brands to hit an upturn, as more mutually beneficial relationships become commonplace.

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PepsiCo’s AMP Energy drink brand partnered with Twitch, the broadcast community for gamers, for a summer “Level Up” promotional campaign. Twitch, acquired by Amazon for $970 million in 2014, remains the leading home for gaming content online, and one of the most recognizable brands in the world of eSports.

Two new brands entered the world of competitive video games, with Mobil 1 sponsoring the Rocket League Championship Series (RLCS), and Dolby putting forward the $10,000USD prize pool for one of the top new eSport titles, Overwatch.

Top eSports organizations remain in the crosshairs of companies seeking to reach millennial audiences. Team Liquid formalized an official partnership with PokerStars. There has been a long-standing relationship between poker and Team Liquid, whose founder, Victor “Nazgul” Goossens, is a former professional player.

Following victory at the Call of Duty World Championship in Paris, OpTic Gaming’s founder and CEO, Hector Rodriguezwent on record about the partnership with equipment company, Turtle Beach.  OpTic continues to strengthen its brand with an array of recent sponsors and release of a paperback book, The Making of eSports Champions.


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