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Gametech: Can eSports Provide an Alternative Revenue Stream for Real-life Teams?

This February, The Fintech Times is taking a deep dive into the world of gametech. Grab your headsets and controllers and tune in to hear about the latest tech and celebrities influencing the market to the development of eSports and much more.

We have discussed how eSports are looking to be more inclusive for female players – what sort of initiatives are being taken up to bolster inclusion, but stripping eSports down to its roots, we hear from Brad Dicks, Director of Marketing (Global), Swarmio MediaGarett Bambrough, GM of the Pittsburgh Knights and Kairo, a male caster and player for BADASS University All-Stars, on how eSports can provide alternative revenue streams for real-life teams.

The rise of gaming YouTube saw a variety of gamers able to earn a living off of gaming content, with the best often being watched the most. As a result of this, the eSports ecosystem was formed and has since seen over 300 real life sports teams, ranging from the English Premier League to the NFL to the Liiga ice hockey league in Finland, register a digital gaming team. But why do they do this?

Huge Prize Pools and Viewership

According to eSports Earnings, the prize pools for eSports tournaments are extremely high, with the Dota 2 International Tournament 2021 having a total prize pool of $40,018,400. Dota 2 tournaments held the biggest prize pools for the top six spots.

From 2012 to 2018, League of Legends was the most viewed game on Twitch, the live games streaming platform. This popularity has seen many teams see an opportunity to capitalise on viewership and therefore expand their fanbase beyond their normal sports team.

Speaking to this effect, BADASS University All-Stars player Kairo said, “eSports are so diverse that it really can help out any company. A potential revenue stream that we’ve seen come in is actually when Schalke sold their League of Legends spot for 30 million euros almost funding their summer transfer budget after relegation. It is crazy that eSports could help them in their attempt promotion to the Bundesliga.”

An established team would want to get involved in eSports to bolster their brand name. The 10th most viewed eSports event of all time, Free Fire World Series 2019 Rio had 2,016,157 viewers and saw Brazilian Corinthians‘, a Brazilian Series A football team, eSports team take home the trophy.  Compared to another sporting event in the country, which some would argue was more renowned with the likes of Lewis Hamilton taking part: the Brazilian Grand Prix, had 2.8 million viewers. The disparity between the viewership isn’t that large considering eSports has not had the same following as racing has in the last 30 years. The Free Fire World Series 2021 Singapore saw the viewership figures more than double, reaching just under 5.5 million viewers. With this growth projected to only increase, as according to Newzoo, eSports are on track to reach revenues of almost $1.6billion by 2023, increasing from just $776million in 2018, there will likely be more tournaments and opportunities for teams to take part.

“Traditional Sports Team’s Strategic Priorities are to connect fans and partners to their brand. To do that they can use gaming (such as Madden if we’re talking about an NFL team) to both digitally and physically, through events, interact with the communities in which they live, work, and play. They need to organise events!” Said, Garett Bambrough, GM of the Pittsburgh Knights, in response to how real-life teams could capitalise on this growth.

Celebrity Endorsements 

Celebrities are often viewed as better than as a whole other class of people due to their extreme sporting abilities, wealth or characteristics. However, when a celebrity endorses and shows interest in a game, it creates a relatable bond with their fans, making the fans want to support the movement. Brad Dicks, Director of Marketing (Global), Swarmio Media picks up on an example of this:

“The realm of eSports is very real-life with teams tirelessly working, training, competing and even, in many cases, living together. I think we’ve seen a lot of evolution and a heightened understanding of the esports space overall and with every major announcement or event that awareness matures.

“There has been a lot of crossover between esports and other professional leagues like the NFL, NHL, and the NBA to name a few – and I don’t just mean the “game versions” of these leagues.

“For example, Marquez Valdes-Scantling of the Green Bay Packers partnered with Subnation Media to launch Trench Made Gaming specifically to build a competitive eSports team in the Call of Duty: Warzone circuit and produce paying tournaments for pro and semi-pro teams. This is but one of several examples of NFLers individually investing in the esports space.”

Dicks continues by analysing the impact NFTs are having on eSports, “Non-Fungible Tokens (NFTs) are virtually taking over every conversation in modern tech and this is where we’ve seen a lot of organisation-level involvement from professional sports leagues. Seeing an opportunity to capitalize on what made the collectable trading card industry what it was (and still is), the NBA came out strong with Top Shot – their own NFT marketplace where the four most recent high-value sales were clipped moments from LeBron James and Ja Morant for a total of $457,998.

“While not directly eSports-related, these and the entire NFT market are eSports-adjacent as we can count on the continued trend of pro sports nostalgia and retail potential merging with the unstoppable rise of esports popularity and its recognition with this pro-league format.

“The forefront opportunities for pro-league athletes and organisations to tap into esports revenue include team ownership, team sponsorships and endorsements, NFT offerings and exclusive partnerships, streaming content and guest gaming engagements, as well as integrated event marketing opportunities for live esports competitions.

“Today, eSports is recognised as a professional sport in countless countries including the United States. eSports is sports and it’s driving how all enthusiasts seek to engage, spend and collect their favourite players, moments and memories in the modern arena.”

Author

  • Francis is a junior journalist with a BA in Classical Civilization, he has a specialist interest in North and South America.

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