Esports, or competitive video gaming, has become a global phenomenon that attracts millions of players and viewers. The esports industry is expected to grow from USD 1.76 billion in 2023 to USD 4.39 billion by 2028.
These three aspects are crucial for the growth and development of the esports industry, as they provide the revenue, exposure, and capital needed to support and expand the esports ecosystem, such as teams, players, events, platforms, and infrastructure.
Sponsorship: From Niche to Mainstream
Traditionally, sponsorship in esports has been dominated by endemic brands—those inherently tied to gaming, such as hardware manufacturers. However, the landscape is shifting. Organizations are now steering away from relying solely on venture capital and jersey sponsorships, moving towards strategic growth.
With a revenue prediction of over $1.2 billion from sponsorships and media rights by 2023, esports presents a lucrative channel for endemic and nonendemic brands.
Interestingly, nonendemic brand recall in esports surpasses that of endemic brands, signifying a changing tide in sponsor engagement. This indicates a broader acceptance of esports among diverse brand categories, with luxury brands, audio appliance manufacturers, card providers, and automotive companies carving out innovative campaigns that fuse the virtual and physical realms.
Advertising in esports is witnessing a steady climb, with an expected growth of 10% to $264.3 million in ad revenues in 2023. Yet, apprehension remains among advertisers due to the perception of esports as a niche market. Despite this, the esports audience—largely young, tech-savvy, and highly educated—presents a golden opportunity for brands to not only showcase products but also bolster their employer branding.
Brands are encouraged to delve deep into understanding the diverse segments within the esports audience, as their interests vary significantly across game categories, from e-commerce and fast cars to personal health and smart devices.
The advertising strategy within esports is nuanced and requires a clear understanding of esports viewership, which differs from traditional sports. The concept of a second screen is native to esports audiences, offering a unique engagement point for advertisers.
Moreover, betting firms are seizing the opportunity to engage with the esports audience through targeted promotions. By offering incentives such as promo codes like ESPN Bet promo code, these firms leverage tailored advertising strategies to captivate users. Such promo codes serve dual purposes: they are an entry point for new customers into the betting world and enhance the overall esports viewing and participation experience.
Investment: From Risky to Rewarding
Investment is another crucial factor that contributes to the growth and development of the esports industry, as it provides the capital and resources needed to support and expand the esports ecosystem, such as teams, players, events, platforms, and infrastructure.
Investment growth is driven by the increasing recognition and appreciation of the potential and value of esports, as well as the diversification and maturation of the esports investment landscape.
Investment in esports is becoming more rewarding and sustainable as investors see the positive returns and impacts of their investments, as well as the opportunities and challenges that lie ahead.
The integration of live esports betting is one of the notable trends in 2023, capitalizing on the dynamic and fast-paced nature of esports titles that lend themselves to in-play wagering. Rocket League is anticipated to become a strong title for betting, attracting non-endemic esports viewers with its accessible and fast gameplay.
The inclusivity of esports is also changing, with women’s leagues no longer being seen as adjuncts. The participation of women is now considered a growth driver for the industry, promoting diversity and inclusivity.
Global Expansion and Localization Strategies
As esports continues to capture the attention of a global audience, companies within the industry are implementing localization strategies to tailor content and marketing efforts to diverse regions. This approach resonates with local cultures and preferences, facilitating deeper connections with regional audiences.
Game publishers offer region-specific content, while streaming platforms provide localized commentary and analysis. Such strategic localization not only enhances viewer engagement but also opens up new markets for esports entities, from players to sponsors, leading to an inclusive and expansive growth trajectory for the industry.
Augmented Reality (AR) and Virtual Reality (VR) technologies are at the forefront, promising to transform the audience’s engagement with esports.
Although the high costs and bulky designs of VR headsets have slowed mainstream adoption, their potential to revolutionize the esports viewing experience is undeniable. VR, in particular, could provide viewers with an immersive experience that places them at the heart of the action, offering a novel way to experience live esports events.
As these technologies continue to advance and become more accessible, they are expected to play a pivotal role in the expansion and enrichment of the esports ecosystem.
Esports is a dynamic and exciting industry that is constantly evolving and growing, thanks to the passion and dedication of the esports community, as well as the support and involvement of the esports stakeholders. In 2023, we have witnessed some of the key trends and developments that have shaped the esports business, such as sponsorship, advertising, and investment.
Sponsorship has become more mainstream and diverse as brands seek to create authentic and innovative connections with the esports audience. Advertising has become more interactive and immersive as brands leverage technology and data to create personalized and relevant ads that enhance the user experience.
Investment has become more rewarding and sustainable as investors see the positive returns and impacts of their investments, as well as the opportunities and challenges that lie ahead.
Esports is not only a form of entertainment but also a source of inspiration, innovation, and impact. Esports has the potential to transform the world of sports, media, and culture, as well as to create social and economic value for society. Esports is a phenomenon that is here to stay, and we can look forward to more exciting and groundbreaking developments.
Tech expert fresh from the Australian Coast. Been in the tech industry more than 9 years, as part of a Business Growth Group. His out of office days are 100% for freestyle surfing and waves chasing.