Don’t have the skills or patience to become a great esports professional player, but still want to make a living from it? One solution might be to create your own company with its own players, coaches, etc. If you want it to succeed, you must get funding, which will almost exclusively come from sponsorship and advertising. We offer you the keys to achieve the desired income; we indicate the most common errors and point out future trends.
Sponsorships and Advertising in the Esports
The world of esports already moves much money all over the world. According to the specialized consulting firm Newzoo, $696 million dollars have been moved in 2017, which represents an increase of 41.3% over the previous year. And in 2020 they predict that this figure will grow to $1,220 million dollars! (That’s $1.2 billion if you’re wondering).
These figures correspond to audiovisual rights, fees charged by video game publishers, tickets and last but not least, advertising and sponsorships. This last concept represents the bulk of profits, precisely 60%, and shows growth of 57.7%, well above the average.
If the global data is precise, so are the experts we have consulted. Sergi Mesonero Burgos, Director of Strategy at Professional Video Game League, couldn’t be more explicit and recommends teams focus on “…advertising and sponsorships.” The rest of the income is “totally symbolic” in our country.
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Esports Funding Mistakes
Getting sponsorships and advertising is not an easy task to get or maintain. It is not easy for consolidated companies and even less so for esports, an emerging sector that is gradually beginning to count on professionals of this type in clubs. One thing is clear, in this sense, and all the experts consulted agree again. There must be in each team one or more people in charge of management, advertising, and sponsorship so that players have to focus on what they do best: winning tournaments. Every player loves winning right?
Not having such professionals is a mistake, but perhaps not the biggest. Sergi Mesonero points out in this sense that the most severe failure is to attend meetings with notable brands interested in the target esports going unprepared and without offering or clarifying a return on investment.
Importance of Communication
A private message on Twitter doesn’t seem like the best way to get sponsorship, but it’s a widespread practice. Perhaps a well-written email followed by a friendly phone call is a much better way to contact, not forgetting an excellent presentation that generates confidence in the advertiser.
It is always necessary to take into account the target and address companies interested in reaching with their messages a mostly male audience, absolutely digital and with an approximate age of 25-30 years. The good news is that “there are many types of companies entering” to advertise in the sector, according to Mesonero, who believes that there are hardly any types of companies that have not already bet on the sector: “Banks have entered, automotive…”
Managing Expenses
As in any company, if income is essential, so are expenses. In this sense, we wanted to know what expenses an esports team can have. Although the figure varies significantly depending mainly on the number of video games covered by the club, the truth is that salaries are usually the main reason for the expense. In this sense, Sergi Mesonero estimates that although “it can vary a lot,” it is challenging to create a leading team with “less than 250,000 euros per year”.
Financing Esports for the Future
Several are the specialists we have consulted to know where the trends in terms of funding. Unanimous opinions about the future are irremediably dependent on television rights and image rights.
As esports grow in popularity, they should aim to have fixed spaces on generalist TVs, which will bring them new benefits and help significantly to improve further in popularity. And, on the other hand, clubs must bet on their brand and the brand of their players, which must become stars. In this sense, Sergio Yáñez Carvajal, co-founder of the professional Mad Lions team, assures that “winning is a channel for acquiring fans” and that “players must be aspirational and generate fans” as the great soccer stars do. To do this, the content team has to play a fundamental role in positioning the brand and the players as attractive influencers for advertisers.
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Player Academies
You may not know, but as the sector has become more professional, players have gone from training at home and presenting themselves at events, to joining clubs and player academies. As in other disciplines, training several hours a day and having effective coaching makes the difference between two players with the same talent. An exciting opportunity is to set up an academy in a comfortable place where players can live and train. They are employees of the team, and the academy takes the prizes and sponsorships. Come on, like a football club!
Headhunters
Playing video games for hours each day exhausts physically and psychologically. That’s why players don’t usually have very long careers. They end up losing reflexes and motivation, fatigue. It is necessary to look for new talent frequently, and there are headhunters (or agents) who look for talent in order to present new opportunities for organizations and teams. Popular games are also changing, which forces them to go looking for other players likely to become pro. Following these trends is key to the success of a headhunting business. I’m thinking that there will be some sort of draft system for new players in the future just like how the NBA is set up for rookies.
Building a Stadium
It may be the craziest idea I come up with, but when you think about it, it’s not that crazy. Nowadays, the audience for football matches is mostly television. However, most loyal fans come to watch the game live because it’s cooler. Can you imagine an esports stadium? With its giant screens to better watch the game and the players, and the possibility to cheer up the teams. It could look perfect. At first, it may be a relatively small installation, but with the growth of the market, who knows? For example, Comcast is building a $50 million esports arena that is sought out to be the premier esports arena on the East coast of the United States.
Specific Bets
You could imagine a betting portal based strictly on esports. You have to take into account that it is a market with many different video games so that you could be betting on thousands of games. With time, the big players of the sector may add this activity as one more to what they propose. However, nowadays, I believe that the spectator of esports is not the same as the one who watches football, and it could be used to make a specialized betting platform. One of the advantages is that you can have hundreds of statistics in real-time, included in the games themselves. Sports betting with esports has changed internet betting overall, there’s more money at play and there’s more excitement. These players and regular audiences of esports titles are committed to their games and they feel great connections with professionals in the sport. Esports fans are another type of audience far more consumed into their idols than traditional sports fans would be.
Develop IT Solutions
Video games evolve, and so does technology. You only have to look at the thrust of virtual reality. Now imagine a game that uses VR. How do you allow the audience to see what is happening? It’s just one of the many challenges and innovations that a company specializing in sports software solutions could face.
Esports Media and Streaming Platforms
Web pages from which tournaments are broadcast in real-time (streaming) or through video on demand to see them when you want; social networks through which the community of players consumes news instantly; media that are responsible for summaries in their newspapers, magazines, news, or even television channels entirely dedicated to esports. Media coverage about these esport tournaments and gatherings are just as important for the industry as the professional gamers and the audience itself. It brings fuel to the fire in order to keep it growing!
Ultimately esports organizations are just as robust of a business as traditional sports are. If anything there’s more involved than traditional sports in esports, technology being one of the biggest differences. There’s tons of opportunity if you’re looking into building or joining esports organizations as the industry continues to grow.
