Over the last few years the eSports industry started to grow from a novelty into a space of its own. For the unfamiliar, eSports is simply the moniker for the competitive video game space. Fast forward a couple of decades and this hobbyist community spawned of dial-up message boards is chasing the $1B revenue mark in 2018. Yet, even as sponsors flood the industry’s coffers with sponsorship revenue poised to grow 48% in 2018, traditional sports brands like Nike, Adidas and Under Armour still shy away from the digital fields of battle.
On the surface, it seems surprising. After all, the sports world has been sensationalizing the next big star even if they’re in high school for decades. Also many companies are targeting and incubating athletes at younger ages like PlayVS. To that tune, eSports athletes reach professional age much more soon and are poised to have much longer careers than traditional athletes. eSports athletes are also much less likely to fall victim to injury. Adidas, in particular, has had a long and troubled road losing athletes to injury from Derrick Rose to Reggie Bush. They have however recently dipped their toes into the foray. So, what is it exactly that stops the traditional sports sponsorship powerhouses from making a foray into the digital side of their world?
Physical presence. A long-time key component of the sports sponsorship world is the benefit of being automatically attached to high traffic, tangible real-estate. Maybe the corporate folks in sports advertising are clinging to a need to see their money at work in an arena. That’s fine. Companies like Activision-Blizzard are already bringing eSports to the big arenas and broadcasting through Disney and ESPN. While the executives wait and observe the price tags, eSports sponsorships will continue to rise. League of Legends, one of the more popular eSports games, draws more than 60M viewers to its championship event. For context, the Indian Premier League cricket finals only draws 55M viewers.
Okay, so eSports is already bigger than the national sport of one of the world’s largest countries. Still not enough for you Nike? Well, it’s enough for Toyota, Intel, HP and more. While several leagues like the NBA and NFL are sponsoring teams, it has yet to remain that apparel and athletic brands are following suit. Where are Gatorade, Under Armour, Lululemon etc? Some companies are still hesitant because the bulk of eSports viewers reside outside the US. Yet, we’ve entered into an era of global economy. Any company trying to attach its global brand to the next generation of youth would be a fool not to engage early. If you want to really grab a market you have to see 10 years into the future the way Red Bull did with American soccer.
The titans of sports apparel need to stick their toes in the pool this summer. Much is changing very quickly and the eSports industry has a huge upside. Maybe it’s about one CMO at one company making the first leap. We’ve seen Netflix beat out Blockbuster, have watched Amazon change the world and witnessed football’s fall from grace as parents fear for their children’s health. The bottom line is, if the sports brands don’t start sponsoring the gamers, then in a decade, the gamers will be sponsoring the sports brands.
- eSports sponsorship revenue is poised to grow 48% in 2018, but traditional sports brands like Nike, Adidas and Under Armour are slow to participate.
- eSports athletes start young and mature their skills faster than traditional sports.
- Companies like Activision-Blizzard are bringing eSports to big arenas and broadcasting through Disney and ESPN.
- There’s a massive opportunity for athletic brands to affiliate with a unique “sport” that has high growth and resonates with their mission.