With the increasing variety of eSports monetization strategies, long gone are the days when eSports were seen only as a hobby.
It’s no secret that the eSports culture is rapidly growing, and with rapid expansion, the possibilities for developing revenue streams expand as well.
Still, let’s face it – many seem to struggle to understand how to properly monetize eSports, and how to take control of potential or existing revenue streams.
We’re here to help you double down on revenue streams for your eSports team.
Whether you’re new to the world of eSports or a seasoned expert, let’s brush up on some eSports basics prior to our eSports monetization strategies.
Table of Contents
What Are eSports?
Even if you’re not an eSports enthusiast, you must have heard the term once or twice. But don’t worry if you are not sure what it means – many who are quite familiar with eSports still struggle to define them.
The term eSports refers to an organized, multiplayer video game tournament which can take place individually or in teams.
Although many amateur players engage with eSports in some form, eSports is known to be competitive gaming at a very professional level.
eSports have made their way to popularity through platforms such as YouTube and Twitch, and they’ve established themselves as a legitimate sporting competition.
Here’s why: in today’s digitalized society, it’s easier than ever to give credibility and status to online accomplishments.
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eSports players nowadays are like the traditional athletes we’re all familiar with.
There’s a catch though – traditional sport hasn’t changed much from its initial beginnings (for example, tennis may have more complex rules today than it used to, but the physical aspect of it hasn’t changed dramatically).
However, eSports are unpredictable in the sense that as technology develops, we can’t foresee how they’d visually appear five, or even ten years from now.
The history of eSports and its beginnings are quite interesting, with a bright and promising future as technology advances and continues to develop.
To support this claim, let’s walk through some eSports statistics and specifics.
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Did you know that eSports viewership is roughly 85% male, and only 15% female?
What about the first known video game competition – did you know that it happened at Stanford University in 1972 and the game was called Spacewar?
What about the fact that the first eSports arena was launched in Santa Ana, California in 2015, making it the first dedicated eSports facility in the USA?
Or that since 2013 many US universities such as Robert Morris University Illinois have started offering athletic scholarships to eSports players?
What about some fun eSports revenue facts? Do you happen to know that eSports can bring large profit to individual players too?
Apparently, as of 2020, Johan Sundstein, a Danish professional gamer, has the highest earnings (he is said to have earned 6.89 million U.S. dollars throughout his eSports gaming career).
There are many examples that portray the development eSports have gone through, however, as we’re interested in how to monetize eSports, it’s important to become aware of some facts relevant for the upcoming periods.
Here’s a few key takeaways that are important to eSports growth:
- According to a Newzoo report, global eSports revenues will grow to $1.1 billion in 2020.
- China will generate 35.0% of the total global eSports revenue, thus accounting for the largest share of the revenues.
- In 2020, $822.4 million will come from media rights and sponsorship (this is expected to increase to $1.2 billion by 2023, thus making up 76% of total eSports revenues).
- In 2020, the eSports audience is expected to grow to 495.0 million people.
- In 2019, there were 885 major eSports events and together they generated $56.3 million in ticket revenues.
What are your guesses for the 2020 eSports events? Get creative.
How Do You Monetize eSports?
A dynamic competition such as eSports requires dynamic monetization strategies.
This is something completely feasible with the eSports market, because eSports offers a wide range of monetization strategies to choose from.
This only serves to further accentuate the innovative and versatile nature of eSports, as well as their open-minded organizational structure.
It’s useful to know that the highest 2020 eSports revenue comes from sponsorships:
Sponsorships are indeed important (actually the most important eSports revenue strategy), and we’re not denying their significance. However, that’s just one side of the story.
If you want to know how to monetize eSports, and you think engaging in sponsorships is the only avenue to secure revenue, you’re missing out on many other equally important eSports monetization strategies.
Consider income and revenue stream diversification. Never rely only on one eSports revenue stream.
If you only have a single source of revenue, you risk ruining your finances completely if anything tanks this single source.
eSports are so dynamic and versatile, that it would be a shame to place all your focus on a single eSports revenue option.
That being said, how do you monetize the fastest growing entertainment industry at the moment? How do you monetize eSports via multiple revenue options?
Let’s find out together.
Sponsorships
You already know sponsorships are the largest source of eSports revenue, but you might wonder why.
Well, with streaming devices such as YouTube and Twitch, it’s never been easier to develop a large social following. Hence, it has never been better to secure a sponsorship collaboration.
In short, an eSports sponsorship is when an endemic brand (brands commonly associated with eSports) or a non-endemic brand (brands offering products/services that have little to do with eSports) that has decided to sponsor a gaming event, a specific person, or a whole team.
We need to note that, with such a vast choice of sponsorship partnerships out there, brands have much higher criteria nowadays before actually deciding on a specific collaboration.
There are many remarkable eSports collaborations.
Some of them include: Cloud9 and BMW, Team Liquid and Honda, Red Bull and Ninja, LPL and Nike, and so on.
All of partnerships are strategic, and help to strengthen brand awareness in a mutually beneficial manner, and work to promote each other’s brands and take it to the next level.
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Broadcasting Rights
Broadcasting rights are another eSports revenue option, and it’s currently seen as one of the fastest growing revenue streams.
Throughout this year, it’s expected that eSports will generate roughly $100 million in media rights deals – a number expected to grow to almost $400 million by 2021.
And this makes sense, as traditional broadcasting seems to fall behind. That being said, the main difference between broadcasting eSports and traditional broadcasting is that eSports allow for a greater interaction between viewership and the actual players.
Plus, it’s made possible via many digital platforms such as YouTube, Twitch, SteamTV, and so on, whereas traditional broadcasting is mainly linked to cable TV.
Also, younger generations tend to form a stronger bond with eSports and the industry in general; they also tend to spend a great deal of their time learning gaming themselves.
A lot of times, they tune into or stream a gaming event with the purpose of learning something as well as connecting with fellow players.
This isn’t a one-time thing. Millions of players are eager to watch gaming events so that they can make their own performance better, learn some eSports hacks, or simply enjoy a nice gaming event.
While this happens, major eSports media brands (such as YouTube and Twitch, for instance) battle for market share. In the midst of all this, tournament organizers should take advantage and try to negotiate better terms with these media brands.
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Placing Bets
Betting tends to be slightly controversial, as many tend to associate it with gambling. Plus, taking into consideration that it is the younger generations that engage in gaming, betting may create bigger problems for a younger audience in the long run.
However, younger generations seem to have access to traditional sport betting in a lot of places anyway (for example, football betting), so this shouldn’t be any different.
What’s more, placing bets seems to be slowly accepted as a major eSports revenue strategy, so this resistance seems to become less relevant. So although this relatively new approach got off to a slow start, it has caught the attention of many.
Did you know that betting is expected to reach $29.8 billion, with 15.4 million individuals placing wagers on the outcomes of video game competitions?
Plus, the whole concept of betting, winning and rooting for someone to win seems to be widely embraced by popular culture. And everything embraced by the majority becomes the norm sooner or later.
Selling Merchandise
If we told you Walmart is selling eSports merchandise for League of Legends and Overwatch, would it be enough to illustrate that eSports are becoming a major part of our daily lives?
As a monetization strategy, selling eSports merchandise is nothing different from the traditional selling of sport clothing – it’s just another revenue channel (an extremely powerful one, at that!).
From hoodies, hats, tank tops, to posters and mugs – the idea is to offer something for every fan and satisfy everyone’s wishes.
This is attractive because it makes players feel closer to their game in real life.
They get to wear what previously only existed digitally, and It becomes part of their physical life. Plus, it allows fans and gamers to show their loyalty and commitment to a particular person/game.
A very well-known eSports merchandise seller is We Are Nations. Also, there are many popular eSports clothing partnerships such as the one in 2019 when Leagues of Legends (LoL) partnered up with Louis Vuitton (yes, even the fashion industry has trickled into eSports!)
Louis Vuitton released a collection of video games related clothing and accessories, with a collection of about 40 items (along with a $5,000 leather jacket!)
And obviously such monetization approaches have a massive impact on the overall eSports revenue. Selling merchandise is one of the best marketing and monetization strategies any brand can choose.
How Keyhole Helps Our eSports Clients Monetize and Increase Revenue
Being aware of how to monetize eSports is great, but it’s not enough in the long run – you also have to know what impact your monetization strategies have on your business. You’ll also need to learn how to grow your eSports revenue more too.
And we’re here to help.
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Let’s walk through one of our clients in the eSports industry.
We’re going to go through one of our clients’ monetization strategies and outline how they were implemented, as well as how using Keyhole helped to paint a picture of how each revenue stream performed, and what key takeaways were interpreted with the data Keyhole was able to provide.
Case Study: How Our Clients Use Keyhole to Drive Revenue Streams
Our client is a European based eSports company that hosts tournaments for different games across university campuses, such as League of Legends, CS:GO, Overwatch, and more.
They wanted to track, refine and optimize their monetization methods, so they partnered with us to gain insight into brand and sponsorship mentions.
Specifically, our client wanted to track mentions around tournaments they were hosting across different campuses, as well as general sentiment around their brand.
At Keyhole, we have a hashtag analytics tool perfect for clients in the eSports industry, that can be used for event tracking such as tournaments, live stream attendance, influencers you’ve partnered with, or your talented players!
Our client used Keyhole to identify potential players to join the eSports league through our Influencer Management tool, as well as to track their existing rosters’ social media accounts.
By tracking this information, our client is able to identify new players or sponsors that best suited their current needs for different partnerships and events.
Keyhole was able to provide accurate, real-time metrics and our client was able to secure sponsorship contracts and sponsorship deals by reporting on the metrics of their social media influencer and brand accounts, contributing to their eSports revenue streams.
Interested in using Keyhole to maximize on revenue streams? You can sign up for a free trial here.
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Over the Winter 2019 eSports season, our client tracked three specific hashtags using our Hashtag and Keyword Tracking feature.
The three hashtags they selected were their own brand hashtags, with one of the hashtags designed to promote their Spring 2020 season.
Over the past year, the hashtags they tracked garnered over 10 million in impressions, and just over 4.5 million in reach.
Taking these metrics into account, our client was easily able to prove and present the power of their platform to potential sponsors.
Alongside their hashtag tracking efforts, our client also used our Social Media Account Analytics feature to track their own eSports Twitter accounts, as well as any associations that they had ties with, such as specific sponsors or university campuses.
This client was able to demonstrate the value of one of their associated Twitter accounts, citing an extremely high engagement rate of 46.92% (with average “high” Twitter engagement rates normally sitting around 1%) and boasting over 650k impressions, making a partnership between a sponsor and our client a very lucrative opportunity with mutual benefit.
Similarly to some of our other clients in the eSports space, this particular client has also been tracking their partnership/sponsorship activities, as well as the partnerships some of their sponsors have with other eSports teams.
By doing so, this has helped them benchmark their social media metrics and compare performance/engagement between teams.
Real-life examples show that the only way you can improve and optimize your monetization methods is by measuring the performance of your current monetization strategy.
Don’t forget to track your brand mentions and sponsorships so that you can measure the reach and impact of various sponsors, or any other third-party you’re collaborating with.
Tracking your mentions will also help you uncover and build new collaborative partnerships.
Finally, you can track your sponsors’ other partnerships as well to benchmark your stats and possibly identify new opportunities and enhance upcoming initiatives.
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eSports monetization strategies don’t have to take up all your time or intimidate you.
There are various monetization strategies you can try, and your best bet is diversifying your risks and income.
To know if a strategy works for you or not, simply track the results and see the effect each strategy has on your total eSports revenue.
Finally, gaming may be an escape from reality for some, but your eSports revenue is real. And that’s why eSports monetization strategies allow you to get creative and never stop monetizing.
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Keyhole is a real-time conversation tracker that provides keyword + hashtag analytics and social media analytics across platforms such as Facebook, Twitter and Instagram. Get started for free here.