eSports is booming. With hundreds of millions of fans worldwide and billions of dollars’ worth of investment, many experts believe it could one day overtake physical sports as the most watched competitive activity in the world.
But the money has to come from somewhere. Aside from legions of fans who are willing to pay for eSports tickets and merchandise, there are also a huge amount of leading companies and brands who see eSports as a smart investment for the future. While some of them have made headlines by striking partnerships and investments with eSports teams, others are not quite so well-known. This article takes a look at some of the biggest names behind the eSports events coming your way soon.
Investing in an eSports franchise requires a huge amount of money. While most of us would have to win a lottery jackpot to even think about it, many celebrities have the finances to make an investment.
Will Smith made the headlines recently when he helped to complete an investment round worth $46 million in eSports organisation Gen.G. With other celebrities on board, such as Japanese soccer player Keisuke Honda, he wants to help Gen.G crack the rapidly growing Japanese market by competing in the popular Clash Royale and Fortnite tournaments, to name just two.
It’s not just Gen.G who have attracted superstars. 100 Thieves, an entity that fields teams in Call of Duty and League of Legends leagues, now boasts the Drake as a co-owner. The rapper fell in love with eSports after his Fortnite match against popular gaming streamer Ninja Blevins attracted 628,000 viewers on Twitch.
With stars such as Michael Jordan, Sean ‘Diddy’ Combs and Odell Beckham Jr. also investing small fortunes, eSports is a top attraction in the showbiz world.
Soccer clubs have known for a while how powerful the pull of eSports is. Fans are already just as likely to watch their games at home as in the stadium; just as they’ll bet in online casinos instead of in person and go internet shopping instead of visiting a mall. Esports fits into that online world by catering to their love of video games, and if they can see their favorite sports teams compete in this sphere, then they want to watch it.
Unsurprisingly, top soccer clubs are leading the way here. Paris St Germain were one of the first to enter the industry back in 2016, entering an eSports team in several competitions. Since then, Manchester City have formed a lucrative partnership with eSports accessory provider Turtle Beach, while Wolves teamed up with social media giant Weibo to launch their own esports brand.
The wealth of top clubs and the appeal of video games promises to be a winning combination for years to come.
BMW, Domino’s Pizza, Lenovo (G2 Sports)
Often eSports entities agree multiple deals to broaden their scope across the business world. G2 Sports are a leading example, boasting the likes of BMW, Domino’s Pizza and, most recently, Lenovo among its network of partners.
The Lenovo deal is the latest addition to G2’s hardware partners, who also include Logitech and AOC. They will sponsor the organization’s League of Legends and Fortnite teams, among others, and the increased funding will help G2 upgrade their software and player training.
Branching out into different industries makes perfect sense for eSports companies as they seek to increase exposure, as well as investment. It’s safe to say that Lenovo won’t be the last of G2’s partners.
Sequoia Capital (Unity)
Not all investments are brand new. Sequoia Capital’s interest in Unity Technologies stretches back to 2009 when they announced a $5.5 million investment in the start-up after recognizing the huge potential in online gaming.
The investment has certainly paid off. Unity was valued at $6 billion in 2019 with Sequoia owning a 24.1% stake, and it doesn’t take a mathematician to work out that this represents a huge return on investment.
The key to their success has been Sequoia’s growth investing, which has contributed to Unity’s tech development. Its engine, said to be the most popular in the world and used by almost half of the world’s games, is the driving force behind the success story. It even led to Mark Zuckerberg wishing to acquire it, but his deal didn’t work out.
Spotify (Riot Games)
Not all eSports deals are about money. Riot’s League of Legends (LoL) series has been one of the key factors behind it’s rise in popularity over the last decade. The game attracts huge numbers of players worldwide, and there are regular high-profile LoL tournaments.
As such, Riot Games is already a very wealthy company. However, in a bid to expand into the music industry, Riot have teamed up with Spotify to increase publicity and form a world-beating partnership.
In 2018, Riot set up K/DA, a virtual girl group who provided the soundtrack to their eSports tournaments. Their hit song POPSTARS amassed over 100 million YouTube views in its first month alone, and a concert quickly followed in South Korea.
K/DA are a key part of LoL’s soundtrack, which attracts millions of monthly Spotify listeners, and it came as no surprise when the two companies struck a deal in August 2020. Promising a ‘first-of-a-kind audio universe’ for players, the partnership is set to last for several years, seeing Spotify becoming the official hub for all LoL music content.
Continuing Appeal of eSports
There is a feeling within the eSports industry that we may have only seen the tip of the iceberg when it comes to investments. The COVID-19 crisis has accelerated the popularity of online gaming, with more people playing at home than ever before. Forecasts predict revenue to top $1.5 billion by 2023, almost double that of two years ago, and wherever there’s growth there’s more investment. Expect further megadeals to be announced in the near future.