The world of eSports has taken the world by storm, with millions of fans tuning in to watch their favorite games and players compete for glory. But how much do these professional gamers make from sponsorships? In this article, we will delve into the economics of eSports sponsorships and explore how much sponsors are willing to pay for a piece of the action. From big-name brands to smaller startups, we will examine the various factors that influence the amount of money that is exchanged in the world of professional gaming. So, get ready to discover the ins and outs of eSports sponsorships and how they are changing the game for athletes and brands alike.
Understanding eSports Sponsorships
What are eSports sponsorships?
eSports sponsorships refer to financial agreements between brands and professional gaming teams or players. These agreements involve the exchange of money or other resources in return for advertising, promotional, or marketing opportunities.
Different types of eSports sponsorships exist, such as:
- Team sponsorships: In this type of sponsorship, brands partner with entire teams to promote their products or services. This can include jersey branding, in-game advertising, and social media promotions.
- Player sponsorships: Individual players can also secure sponsorships from brands, which often involve endorsements, social media promotions, and other marketing activities.
- Event sponsorships: Companies can sponsor specific eSports events, such as tournaments or championships, to increase their visibility and reach within the gaming community.
The importance of eSports sponsorships for teams and players cannot be overstated. These partnerships provide much-needed financial support for teams and players, allowing them to focus on their craft and invest in their gaming careers. Additionally, sponsorships can help teams and players gain exposure, credibility, and recognition within the industry, leading to further opportunities for growth and success.
How do eSports sponsorships work?
- Process of securing a sponsorship deal
- Identifying potential sponsors
- Creating a sponsorship proposal
- Negotiating terms and contract
- Role of agents and intermediaries
- Representing players or teams
- Facilitating negotiations
- Providing support and advice
- Different types of sponsorship deals
- Product sponsorship
- Equipment sponsorship
- Tournament sponsorship
- Team sponsorship
- Player sponsorship
The process of securing an eSports sponsorship deal involves identifying potential sponsors, creating a sponsorship proposal, and negotiating terms and contracts. Agents and intermediaries can also play a role in representing players or teams, facilitating negotiations, and providing support and advice. There are different types of sponsorship deals, including product sponsorship, equipment sponsorship, tournament sponsorship, team sponsorship, and player sponsorship.
eSports sponsorship trends
Global eSports sponsorship market size
The global eSports sponsorship market has seen a significant increase in size over the past few years. In 2019, the market was valued at approximately $1.08 billion, and it is projected to reach $1.64 billion by 2027, growing at a CAGR of around 7.1% during the forecast period. This growth can be attributed to the increasing popularity of eSports and the rising number of sponsorship deals.
Growth trends in eSports sponsorships
The growth trends in eSports sponsorships have been fueled by the increasing popularity of eSports, as well as the recognition of eSports as a legitimate sport by various governing bodies. This has led to a rise in the number of sponsorship deals, as well as an increase in the amount of money being spent on eSports sponsorships. In addition, the rise of live streaming platforms such as Twitch and YouTube Gaming has also contributed to the growth of eSports sponsorships, as it has made it easier for sponsors to reach a wider audience.
Key players in the eSports sponsorship market
The key players in the eSports sponsorship market include sports organizations, gaming companies, and technology companies. These organizations are increasingly investing in eSports sponsorships, as they see the potential for growth and the opportunity to reach a younger demographic. For example, in 2020, the NBA and NHL both signed deals with gaming companies to create eSports tournaments, while companies such as Coca-Cola and Pepsi have also entered the eSports sponsorship market.
In addition, individual eSports teams and players are also able to secure sponsorship deals, with some of the top players earning millions of dollars in endorsement deals. This has led to a rise in the number of eSports agents, who help players and teams negotiate sponsorship deals and manage their careers.
eSports sponsorship revenue streams
When it comes to eSports sponsorships, there are several different revenue streams that teams and players can tap into. These include:
- In-game advertising: This is perhaps the most well-known form of eSports sponsorship. In-game advertising involves placing ads within a game itself, often in high-traffic areas like the main menu or in-game store. This can be a lucrative revenue stream for teams and players, as it allows them to generate income even when they’re not actively competing.
- Team and player sponsorships: Similar to traditional sports, eSports teams and players can also secure sponsorships from companies looking to associate themselves with the industry. These sponsorships can take many forms, from financial support to product placement to exclusive partnerships. In some cases, teams and players may even be paid to wear certain brands or use specific products during their streams or competitions.
- Live events and tournaments: eSports tournaments and live events are a growing industry, and companies are often willing to pay big bucks to sponsor these events. This can include everything from title sponsorships (e.g. “the XYZ eSports Invitational”) to in-person activations (e.g. a branded booth on the show floor). Sponsoring an eSports event can be a great way for companies to reach a younger, tech-savvy audience, and the revenue generated from these sponsorships can be significant.
- Merchandise sales: Another revenue stream for eSports teams and players is merchandise sales. Fans of a particular team or player may be willing to purchase merchandise such as t-shirts, hats, or other apparel bearing the team or player’s logo or likeness. In some cases, teams and players may even have their own branded merchandise lines, which can generate significant revenue.
Factors that influence eSports sponsorship payments
Popularity of the game and the team
- The role of game popularity in securing sponsorships
- The popularity of a game plays a significant role in attracting sponsorships. Sponsors are often drawn to games that have a large player base and a dedicated fan following. Games that are part of a well-established franchise or brand, such as the Call of Duty and FIFA series, are particularly attractive to sponsors as they already have a built-in audience.
- Additionally, games that are in the early stages of their life cycle and have the potential for exponential growth are also appealing to sponsors. These games offer the opportunity for sponsors to get in on the ground floor and establish a strong presence in the industry as it grows.
- Impact of team popularity on sponsorship payments
- The popularity of a team within the game also plays a significant role in determining the amount of sponsorship payments they receive. Teams that have a large following and a history of success are more likely to attract high-paying sponsors. For example, teams that have won multiple championships or have a large social media following will be more attractive to sponsors than less successful teams.
- Furthermore, teams that are part of a well-established organization or franchise, such as professional sports teams, are also more likely to attract high-paying sponsors. These teams already have a strong brand and a loyal fan base, which makes them an attractive option for sponsors looking to reach a wider audience.
- Case studies of popular game/team sponsorships
- One example of a popular game/team sponsorship is the partnership between Coca-Cola and the League of Legends World Championship. Coca-Cola has been a sponsor of the tournament since 2012 and has provided financial support as well as promotional opportunities for the brand. The partnership has been successful for both parties, with Coca-Cola gaining exposure to a large and engaged audience of gamers, while the tournament has benefited from the financial support to continue to grow and expand.
- Another example is the partnership between Red Bull and the Dota 2 game. Red Bull has been a long-time sponsor of the game and has provided financial support as well as promotional opportunities for the brand. The partnership has been successful for both parties, with Red Bull gaining exposure to a large and engaged audience of gamers, while the game has benefited from the financial support to continue to grow and expand.
Viewership and engagement metrics
- The role of viewership and engagement in securing sponsorships
- eSports sponsorships are highly competitive, with teams and players vying for the attention of major brands.
- One of the key factors that sponsors consider is the size and engagement of the audience.
- Teams and players with a large and active fan base are more attractive to sponsors, as they offer a greater potential for exposure and engagement.
- Importance of social media followers and engagement
- Social media platforms like Twitter, Instagram, and Twitch are important channels for eSports teams and players to connect with fans and build their brand.
- Sponsors often look at social media metrics such as follower count, engagement rate, and the number of likes, comments, and shares.
- Teams and players with a strong social media presence and high levels of engagement are more likely to secure sponsorships.
- Key metrics used by sponsors to evaluate eSports teams and players
- Sponsors use a variety of metrics to evaluate the potential value of an eSports team or player.
- These metrics may include viewership numbers, social media engagement, merchandise sales, and the number of streams or broadcasts.
- Teams and players who can demonstrate a track record of success and a large, engaged fan base are more likely to secure sponsorships.
Media coverage and exposure
- The role of media coverage in securing sponsorships
Media coverage plays a crucial role in securing sponsorships for eSports teams and organizations. Sponsors are increasingly looking for ways to reach a wider audience and connect with potential customers, and media coverage provides an opportunity to do just that. In particular, live events and tournaments are an important source of media exposure for eSports, as they provide a platform for teams to showcase their skills and generate interest from fans and sponsors alike. - Importance of live events and tournaments for media exposure
Live events and tournaments are critical for generating media coverage and exposure for eSports teams and organizations. These events provide an opportunity for teams to compete against each other in front of a live audience, and for fans to come together and support their favorite teams. In addition, live events and tournaments are often covered by major media outlets, which can help to generate buzz and interest in the sport. - Strategies for maximizing media coverage and exposure
To maximize media coverage and exposure, eSports teams and organizations should focus on creating engaging and compelling content that appeals to a wide audience. This might include creating high-quality live streams of tournaments and events, producing engaging video content, and leveraging social media to connect with fans and build a following. Additionally, teams should consider partnering with influencers and other organizations in the eSports industry to help increase their visibility and reach.
Brand alignment and synergy
- The importance of brand alignment and synergy in securing sponsorships
- Brand alignment refers to the extent to which a team or player’s image and values align with those of a potential sponsor.
- Synergy refers to the mutually beneficial relationship between a team or player and a sponsor, where both parties gain something from the partnership.
- How teams and players can position themselves to attract sponsors
- Develop a strong brand identity that aligns with the values and goals of potential sponsors.
- Demonstrate success and a proven track record in the industry.
- Leverage social media and other digital platforms to reach a large and engaged audience.
- Case studies of successful brand alignments and synergies
- Case study 1: Team A secures a sponsorship deal with a technology company, leveraging their reputation as a top-performing team in the industry and aligning with the technology company’s focus on innovation and cutting-edge technology.
- Case study 2: Player B partners with a gaming accessories company, using their large social media following and influence within the gaming community to promote the company’s products and increase sales.
Factors that influence eSports sponsorship payments (continued)
Long-term potential of the team or player
- The role of long-term potential in securing sponsorships
- Sponsors seek teams and players with the potential to grow and achieve success over time, as this can lead to greater exposure and return on investment.
- Long-term potential is a key factor in securing sponsorships, as it allows sponsors to build a relationship with a team or player that has the potential to grow and achieve success over time.
- Importance of player development and growth for sponsorship payments
- Sponsors are often willing to invest in players who show potential for growth and development, as this can lead to greater exposure and return on investment in the long term.
- Teams and players who prioritize player development and growth are more likely to secure sponsorships, as they demonstrate a commitment to long-term success.
- Case studies of teams and players with long-term potential
- Case studies of teams and players with long-term potential can provide valuable insights into the factors that contribute to success in eSports sponsorships.
- Examples of teams and players with long-term potential include those who have a strong track record of success, demonstrate a commitment to player development and growth, and have a clear vision for the future.
Negotiation skills and leverage
The role of negotiation skills and leverage in securing sponsorships
In the world of eSports sponsorships, negotiation skills and leverage play a crucial role in determining how much a team or player can secure from a sponsor. Teams and players with strong negotiation skills and leverage have a better chance of securing higher payments from sponsors. Negotiation skills refer to the ability to communicate effectively and persuasively, while leverage refers to the ability to use one’s position or resources to influence the outcome of a negotiation.
How to negotiate the best possible deal
To negotiate the best possible deal, teams and players should consider the following strategies:
- Research: Research the market rates for sponsorships in the eSports industry to determine a fair price range.
- Build relationships: Build relationships with potential sponsors and understand their business goals and objectives. This will help in creating a mutually beneficial partnership.
- Highlight value: Highlight the value that the team or player can bring to the sponsor, such as increased brand visibility, access to a dedicated fan base, and social media reach.
- Be flexible: Be flexible and open to different sponsorship options, such as in-kind sponsorships or revenue sharing agreements.
- Negotiate in stages: Negotiate in stages, starting with a lower offer and working up to a higher offer.
Examples of successful negotiation strategies
Some examples of successful negotiation strategies in the eSports industry include:
- Team Liquid’s partnership with Twitch, which included a revenue sharing agreement and a content creation partnership.
- Cloud9’s partnership with Hershey’s, which included a charity stream event and social media promotions.
- T1’s partnership with Kia Motors, which included a branded team bus and in-game advertising.
Overall, negotiation skills and leverage are critical factors in securing eSports sponsorships. Teams and players who can effectively communicate their value and negotiate the best possible deal stand the most to gain in the highly competitive world of professional gaming sponsorships.
Economic factors
The role of economic factors in securing sponsorships
Economic factors play a crucial role in determining the amount of money that eSports teams and organizations can secure from sponsors. The economic viability of the eSports industry, the revenue potential of individual teams and players, and the level of competition for sponsorship dollars are all factors that can influence the amount of money that is available for sponsorships.
One key economic factor that can impact the amount of money available for sponsorships is the overall economic health of the region or country in which the team or organization is based. For example, teams based in regions with strong economies and high levels of disposable income may be more attractive to sponsors, as they can tap into a larger pool of potential customers. On the other hand, teams based in regions with weaker economies may face more challenges in securing sponsorships, as there may be fewer companies with the resources to invest in eSports sponsorships.
Impact of regional economic factors on sponsorship payments
Regional economic factors can also impact the amount of money that teams and organizations can secure from sponsors. For example, teams based in regions with a high concentration of technology companies may be more attractive to sponsors in the tech industry, as these companies may be looking to tap into the growing eSports market. Similarly, teams based in regions with a strong tradition of gaming may be more attractive to sponsors in the gaming industry, as these companies may be looking to reach a highly engaged and passionate audience.
Global economic trends and their impact on eSports sponsorships
Global economic trends can also impact the amount of money available for eSports sponsorships. For example, the growth of the global eSports market has led to increased interest from sponsors in a variety of industries. As the market continues to expand, more companies are likely to see the value in investing in eSports sponsorships as a way to reach a young and engaged audience. However, global economic downturns can also have a negative impact on the amount of money available for sponsorships, as companies may be more hesitant to invest in marketing and advertising during times of economic uncertainty.
FAQs
1. How much do eSports sponsors pay?
Answer: The amount that eSports sponsors pay can vary greatly depending on a number of factors, such as the popularity of the game, the level of competition, and the size of the audience. Generally, sponsors pay a fee to have their brand or product associated with an eSports team or tournament. This fee can range from a few thousand dollars to millions of dollars. Additionally, some sponsors may also provide financial support for teams and players through salaries, bonuses, and other forms of compensation.
2. What factors influence the amount that eSports sponsors pay?
Answer: The amount that eSports sponsors pay is influenced by a variety of factors, including the popularity of the game, the level of competition, and the size of the audience. The more popular a game is, the more likely it is that sponsors will be willing to pay a higher fee to associate their brand with it. Similarly, the level of competition can also influence the amount that sponsors are willing to pay, as teams and players who are consistently successful are more attractive to sponsors. Finally, the size of the audience can also play a role, as sponsors are often looking to reach a large and engaged audience with their marketing efforts.
3. How do eSports sponsorships differ from traditional sports sponsorships?
Answer: While there are some similarities between eSports sponsorships and traditional sports sponsorships, there are also some key differences. One of the main differences is the level of engagement that sponsors can have with eSports teams and players. In traditional sports, sponsors often have limited opportunities to interact with teams and players, as they are typically focused on their training and competition. In contrast, eSports teams and players are often more accessible to sponsors, which can provide sponsors with more opportunities to build relationships with them and promote their brand. Additionally, the nature of eSports competitions and the way they are broadcasted also differ from traditional sports.
4. What are the benefits of sponsoring an eSports team or tournament?
Answer: Sponsoring an eSports team or tournament can provide a number of benefits for companies, including increased brand awareness, access to a young and engaged audience, and the ability to build relationships with teams and players. Additionally, sponsoring an eSports team or tournament can also provide an opportunity for companies to showcase their products and services in a unique and engaging way. Furthermore, as eSports is a growing industry, sponsoring an eSports team or tournament can also provide an opportunity for companies to be at the forefront of this growing industry and establish themselves as a leader in the space.
5. How can I get started with sponsoring an eSports team or tournament?
Answer: If you’re interested in sponsoring an eSports team or tournament, the first step is to research the different options available and determine which ones align with your company’s goals and objectives. You can start by reaching out to eSports teams and tournaments organizers to learn more about their sponsorship opportunities and the benefits they offer. Additionally, you can also work with a sports marketing agency that specializes in eSports sponsorships, which can help you navigate the process and find the right opportunity for your company. Once you have identified a team or tournament you are interested in sponsoring, you can begin negotiating the terms of the sponsorship and finalize the deal.