Avalanche Inbound: The shake up of esports

This generational phenomenon has quickly become serious business. There are approximately 191 million esports enthusiasts worldwide and total revenue in 2017 was estimated at £504 million.
Ronan Hegarty

March 8, 2018

From the dawn of civilisation, the human imagination has been captivated by competitions of skill, strength and endurance. From the ancient Roman coliseum to Wembley stadium, people have always flocked to major sporting events.

Esports has emerged out of an increasingly digital culture and is essentially a term used to describe video game tournaments for amateurs and professionals. They are not limited to any console or platform.  The most popular esports that are the driving force of the industry are real time action games such as League of Legends (also known as Mobas), first person shooters (Call Of Duty), football games (FIFA) and general strategy games (StarCraft 2 is considered by many to be the national sport of South Korea!).  Make no mistake, 27 million people watched the League of Legends final online and esports enthusiast’s now attend major events in their thousands across Europe, the Americas and Asia.


Highlights from the week 7 matchup between FlyQuest and Clutch Gaming. An example of a League of Legends match (Youtube / LoL esports)

This generational phenomenon has quickly become serious business. There are approximately 191 million esports enthusiasts worldwide and total revenue in 2017 was estimated at £504 million. When you consider that revenue more than doubled since 2015 and is projected to reach 1.077 billion this truly is a commercial avalanche.  With jaw dropping growth it is of no surprise that current professional esports teams have enjoyed riding the tail of the tiger.  As you can imagine, where there is money to be made there is marketing warfare.

Established sports teams have recognised a new avenue of exposure to the elusive millennial market in arguably the most exciting merchandising opportunity of recent times.  Well known sports brands such as Ajax, Manchester City, West Ham United and Valencia (to name a few) have already entered the fray. Their legitimacy as sporting entities will rub off on esports as a whole and serve to bolster its image as a credible sport. They have a deeper understanding of merchandising compared with traditional esports teams, but they also have lacked a means to truly understand this millennial segment.  They will shake up the market and unless current esports teams can adapt, their slice of the proverbial pie will shrink.

Endemic brands with loose ties to gaming, such as Red Bull, Coke and Lion were some of the first advertisers/sponsors in this market. As esports has grown the net of sponsors and advertisers has grown in turn. Movie studios like Universal, apps and gambling companies are now getting involved. In short, this is a highly desirable market where understanding this core demographic and its intricacies will open up great opportunities for a vast array of brands which are otherwise lacking in the present media landscape.

Meanwhile as the hype rages on we should add the important caveat here that the total revenue garnered from esports could be so much more.  You will read many articles with titles along the lines of ‘esports is bigger than basketball’ based on viewership etc. This is only true of the major events. In terms of a steady base of revenue and merchandised spending, other sports are ahead.  If the average direct spend per fan increased by just 72p the industry would generate over 1 billion. Sponsors, advertisers and teams all need to learn to effectively monetise this market.  Broadcasters and social media outlets will also seek to boost viewership further.

We here at Morar HPI have unparalled access to this market and have an extensive understanding of how to effectively fine tune advertising campaigns or merchandising efforts. Our insight will provide you with actionable outputs and recommendations which will turn you from a player in the market, to a winner.

Check out our website and get in touch with how we can help you.


Image: © LeagueofLegends.com

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