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The Battle for Esports Dominance is on
- As esports teams battle out in front of millions of fans online, companies are engaging in similar warfare as they look to lock up sponsorship deals with some of the most prized assets in the industry
- This year, esports sponsorship revenue is projected to be the highest revenue stream at US$456.7 million, growing 34.3% from 2018 (NewZoo, 2019)
By: Ben Feferman
The race is on! As esports teams battle out in front of millions of fans online, companies are engaging in similar warfare as they look to lock up sponsorship deals with some of the most prized assets in the industry. This year, esports sponsorship revenue is projected to be the highest revenue stream at US$456.7 million, growing 34.3% from 2018 (NewZoo, 2019). As casual fans continue to tune into extended amounts of esports content daily, businesses are beginning to understand the value proposition that esports presents; an industry that is ubiquitous, interactive and rapidly growing. In turn, sponsors provide vast amounts of financial resources that help transcend the nature of esports events, teams and players, alike.
Top Sponsors in Esports
Intel (NASDAQ: INTC)
From producing CPUs to dabbling in the game, Intel has held the longest sponsorship in esports with the Electronic Sports League (ESL). The two companies announced a partnership in which they will invest US$100 million towards esports initiatives to help the global growth and expansion of esports. Intel also sponsors many large esports events, including Intel Extreme Masters, ESL One, Intel Grand Slam, Counter-Strike: Global Offensive Pro League and the LPL league.
T-Mobile (NASDAQ: TMUS)
T-Mobile is a telecommunications company that started sponsoring some major teams very early. In 2017, T-Mobile was sponsoring both Cloud 9 and TSM, some of the largest esports teams in North America. Although they no longer sponsor those teams, T-Mobile continues to make an impact in the Overwatch League (OWL) by sponsoring the league and two of its teams, the Houston Outlaws and New York Excelsior.
BMW (ETR: BMW)
BMW is switching gears in 2019 as it begins to watch the esports landscape closely. The automotive company not only sponsored its first esports team in 2019 in Cloud 9, but also partnered with Brazil’s paiN Gaming in the same year.
Nike (NYSE: NKE)
It is hard to imagine a competitive environment in this world that does not have Nike’s footprint. Nike treats esports the exact same way. Nike supports esports athletes, such as Jain “Uzi†Zihao (Chinese League of legends Pro), through endorsement deals and sponsors the Chinese League of Legends Pro League, supplying the entire 16 team roster with Nike apparel. Through these synergies, Nike hopes to create sportswear catered to the esports audience and training programs for gamers to improve.
SAP (NYSE: SAP)
In a data-driven age, where analytics are helping countless athletes improve, it is only natural for electronic sports to follow the same path. In 2018, SAP, a business software company, announced a three-year sponsorship with Team Liquid to help improve the team’s performance through innovation in data driven analysis. SAP will use its SAP Huna, a business analytics platform, along with Team Liquid’s DOTA team’s collaboration to help pioneer the first wave of deep game analysis. SAP also sponsors large events, such as ESL and DreamHack, to provides these live events with data analysis using its cloud platform.
As the arms race heats up for dominance in esports sponsorships, the companies with established relationships with top tier teams and leagues will have a strong first to market advantage. However, with the centrality and fragmentation of the industry, there are still many untapped pockets for new entrants.
The vast majority of esports companies, be in teams, franchises or content plays, will be relying on corporate sponsorships to drive revenue and these companies know, sponsorships are what will continue to drive their valuations. This market is going to heat up and get way more interesting.
Other Large Esports Sponsors.
- Honda (TYO: 7267) – Team Liquid
- Monster Beverage Corp (NASDAQ: MNST) – PSG Esports
- Nissan (TYO: 7201) – FaZe Clan, Optic Gaming
- Puma (ETR: PUM) – Cloud 9
- HTC Cord (TPE: 2498) – FaZe Clan
- Pepsi (NASDAQ: PEP) – Team Dignitas, Splyce, Sk Gaming
- Disney (NYSE Disney) – Team Liquid
- Daimler AG (ETR: DAI) – ESL
- Razor (HKG: 1337) – Immortals, Evil Geniuses, Seoul Dynasty, LA Valiant, EDG,
Source: https://investorintel.com/sectors/esports-gaming/esports-gaming-intel/battle-for-esports-dominance/
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