Who Sponsors Esports and How Much Do They Spend?
Contents
Esports has seen a meteoric rise in popularity in recent years. But who is behind all this growth? We take a look at the biggest sponsors in esports and how much they spend.
Introduction
Since the early 2010s, esports has been gaining popularity worldwide. By 2019, the global esports economy was valued at nearly $1 billion, and it is projected to grow to $1.8 billion by 2022.1
With this growth has come an increase in esports sponsorships. Brands are sponsoring professional gamers and teams to align themselves with this growing industry and reach new audiences. In 2020, the average esports sponsorship deal was worth $732,000—a significant increase from just $167,000 in 2016.2
So who are these sponsors, and how much are they spending? Let’s take a look at the data to find out.
The Biggest Sponsors of Esports
The global esports market is still young, but it’s already attracting some of the biggest sponsors in the world. Brands like Coca-Cola, Intel, and Red Bull are all getting involved, and they’re spending big money to do it. In this article, we’ll take a look at some of the biggest sponsors of esports and how much they’re spending.
Twitch
Twitch is a live-streaming video platform focused on video games and esports. It was founded in 2011 by Justin Kan and Emmett Shear as a spin-off of General Electric’s live-streaming website Justin.tv. Twitch is owned by Amazon, and its CEO is Emmett Shear.
According to research conducted by SuperData in 2014, Twitch had an estimated 55 million unique viewers that watched 121 minutes per day on average. Of these viewers, 1.8 million were reported to be Twitch partners, who stream an average of four hours per day and are able to generate revenue from ads, subscriptions, and donations. In 2013, Twitch announced that it had surpassed 45 million unique monthly viewers. By June 2014, it was considered the fourth largest website in terms of peak internet traffic in the United States. ComScore reported that Twitch had 3.6 percent of all non-replayed internet traffic during March 2015.
Coca-Cola
Coca-Cola has been a long-time supporter of gaming and esports, dating back to its sponsorship of the now-defunct Championship Gaming Series (CGS) in 2006. More recently, Coke has partnered with Riot Games, the developer of League of Legends, as one of the game’s global sponsors. The partnership was announced in 2014 and has since been renewed multiple times.
In 2015, Coca-Cola launched its first ever esports-specific ad campaign, called “Fuel for Gamers.” The campaign featured soda cans with images of popular League of Legends champions on them and was available in select markets.
Coca-Cola is also a sponsor of T1 Entertainment & Sports, an esports organization founded by Jack Etienne of Cloud9 and Justin Sun, the founder of TRON.
Red Bull
Red Bull is an energy drink company, founded in 1987. It is the largest seller of energy drinks in the world. The company’s product portfolio includes Red Bull Energy Drink, Red Bull Sugarfree, Red Bull Cola, Red Bull Apple Edition, Red Bull Peach Edition, and Red Bull Cherry Edition. In February 2007, the company introduced its “Red Bull Editions” line of beverages.
In addition to sponsoring esports athletes and teams, Red Bull also hosts its own esports events. The company has held tournaments for games such as League of Legends, Dota 2, Mortal Kombat X, Tekken 7, and Street Fighter V. In 2018, Red Bull hosted the inaugural three-on-three basketball tournament called the Red Bull Tip Off.
To date, Red Bull has not disclosed how much it spends on its esports sponsorships and events. However, industry estimates suggest that the company likely spends millions of dollars on its esports initiatives each year.
Nissan
Nissan was one of the first non-endemic brands to enter the world of esports when it partnered with UEFA in 2017. The car company has since been a major sponsor of several global esports tournaments, including the Overwatch World Cup, Halo World Championship, and Call of Duty World League. Nissan has also sponsored several professional esports teams, most notably OpTic Gaming and G2 Esports. In 2018, Nissan launched an esports training program for young gamers in partnership with the Nissan PlayStation GT Academy.
T-Mobile
T-Mobile became an official sponsor of Cloud9, a professional esports organization, in July 2017. At the time, T-Mobile became the “exclusive wireless partner” of Cloud9 and sponsors other events such as the Overwatch League. Since then, other partnerships have been announced between the two companies. In February 2018, T-Mobile and Twitch announced that T-Mobile would be the presenting sponsor for Twitch Rivals, a series of competitive esports events. And in May 2018, it was announced that T-Mobile would be an official sponsor of ESL One: New York 2018 powered by Intel.
Why Do They Sponsor Esports?
The esports industry is growing rapidly and with it, the amount of sponsorships is increasing as well. But why do companies sponsor esports? What do they hope to gain from it? There are a few reasons why companies might sponsor esports. Maybe they want to increase brand awareness or they might want to appeal to a younger demographic. Whatever the reason, it’s working.
To Reach Young People
Most of the people who watch esports are young. The average esports fan is a millennial or Gen Z—a key demographic for many brands.
That’s one reason why companies like Coca-Cola and Red Bull have long been involved in sponsoring pro gamers and events. It’s also why more traditional companies are starting to sponsor teams and tournaments. By aligning themselves with esports, they can connect with young consumers in a way that feels natural and unforced.
Some companies see sponsoring esports as a way to build their brand in countries where they don’t have a strong presence. For example, Jack in the Box sponsors an Overwatch team in South Korea, even though the fast-food chain doesn’t operate any restaurants there.
To Reach a Growing Audience
Esports offers sponsors a way to reach a growing audience of young, digital-native consumers. According to Newzoo, the global esports economy will reach $696 million in 2017, a year-over-year growth of 41.3%. And while the majority of esports fans are under the age of 34, the audience is quickly expanding to include older demographics as well. In fact, 40% of new esports fans in 2017 are aged 35 or older.
What’s more, esports fans are incredibly engaged with the games they love. In fact, they watch twice as much online video content as non-esports fans and are 3 times as likely to watch live streams on a weekly basis. This provides sponsors with a unique opportunity to reach highly engaged consumers who are difficult to reach through traditional channels.
To Align with a Trending Sport
Esports has emerged as one of the most popular forms of entertainment in recent years, and it shows no signs of slowing down. With an estimated global audience of nearly 500 million people, esports is quickly becoming a top priority for marketers looking to connect with young, digital-native consumers.
As the popularity of esports continues to grow, more and more brands are looking to get involved with the spaces that their target audiences are already interested in. For many brands, sponsoring an esports team or event is a great way to do this.
Not only does sponsoring an esports team or event help brands align themselves with a trending sport, but it also allows them to tap into the passionate and engaged fan bases that exist within the esports community. In addition, sponsoring an esports team or event can provide brands with valuable exposure to potential customers through live events, online streaming platforms, and traditional media coverage.
How Much Do They Spend?
A report from Newzoo shows that in 2019, the global esports economy will reach $1.1 billion. This figure is up 27% from 2018. Of this $1.1 billion, $822.4 million will come from brand investments. So, who are these brands and how much are they spending?
Twitch
As of May 2020, it is estimated that Twitch has approximately 27,000 active sponsors. These sponsorships range in value, but the average is estimated to be around $250,000 per year. The largest Twitch sponsorship deals have been worth as much as $15 million per year.
Coca-Cola
Coca-Cola sponsors a variety of esports teams and events, most notably the LCS, Overwatch League, and Call of Duty World League. In 2017, they were estimated to have spent $70 million on esports sponsorship.
Red Bull
Red Bull is an Austrian-based company that produces and sells a variety of energy drinks. The company also has a long history of sponsoring various sporting events, including esports.
To date, Red Bull has invested millions of dollars in the esports industry, sponsoring some of the biggest tournaments and teams in the scene. In 2018 alone, Red Bull was estimated to have spent over $100 million on esports sponsorships.
Given the company’s history of investment in traditional sports, it’s likely that Red Bull will continue to pour money into esports in the years to come.
Nissan
Nissan is a Japanese multinational automobile manufacturer headquartered in Yokohama, Japan. The company sells its cars under the Nissan, Infiniti, and Datsun brands with in-house performance tuning products labelled Nismo. Since 1999, Nissan has been part of the Renault–Nissan–Mitsubishi Alliance, a partnership between Nissan of Japan, Mitsubishi Motors of Japan and Renault of France. As of 2013, Renault holds a 43.4% voting stake in Nissan, while Nissan holds a 15% non-voting stake in Renault. Carlos Ghosn serves as CEO of both companies.
Nissan sponsors several esports teams and events. In 2016, they became the title sponsor for Counter Logic Gaming’s League of Legends team and later that year they expanded their partnership to include sponsoring Team Liquid’s League of Legends and Super Smash Bros. teams. In 2018, they began sponsoring OpTic Gaming’s League of Legends team and that same year they became the presenting sponsor for the North American League of Legends Championship Series broadcast on Twitch. Nissan has also sponsored several Call of Duty World League events.
T-Mobile
T-Mobile is an American wireless network operator. The company has a long history of sponsoring many esports events and teams. In 2018, T-Mobile committed $7.5 million to the League of Legends Pro League (LPL) in China, becoming the title sponsor of the league. The company has also been the sponsor of the Super Smash Bros. Melee player Hungrybox since 2015.
Conclusion
While the esports industry is still young, it has already attracted a significant amount of sponsorships from companies looking to tap into the lucrative market. The majority of these sponsorships come from companies in the tech and gaming industries, although a number of non-endemic companies have also gotten involved.
The amount of money that companies are willing to put into esports sponsorship deals varies widely, with some spending just a few thousand dollars while others commit millions. The size of the sponsorship deal also depends on the company’s goals and the scope of their involvement in esports.
Overall, it is clear that there is a lot of potential for companies to gain exposure and reach a new audience by sponsoring esports events and teams. As the industry continues to grow, we can expect to see even more big-name sponsors get involved in esports in the years to come.
