EsportsGaming

Investing in Esports: 5 Things to Consider

By December 15, 2018 No Comments

Before I begin, I’d like to go on record as saying I generally do support investments of all kinds in eSports. It’s a booming sector with vast potential for almost anyone. However, there are several key factors that I’ve witnessed companies look past because of how excited they are to get involved. While I’m glad they share the passion of supporting competitive gaming, businesses like mine are sometimes tasked with essentially “recovering” their investments when they go wrong.

Here are a few things to think about before you dive in:

1.Branding

There are two main roles people can play in the industry that will generate the most attention: Player or Commentator. As a player, you are to practice daily, interact with your fan base, and compete in tournaments of all sizes. Commentators are involved in events, broadcasted online tournaments, and often have their own side projects (i.e. an entertaining stream or weekly show). That’s a lot of exposure, and a lot of different ways for your brand to reach the masses. Before you sign them up, ask a few questions: How often do they promote their current sponsors or partners? Do they constantly post song lyrics instead of engaging with the community? Are they a loose cannon? Is a game loss followed by excuses or “GG”? Do you feel comfortable associating your brand with this team or individual? Are they fully utilizing social media (Twitter, Facebook, YouTube, etc.) ?

2. Events

This is where a good deal of your budget will end up going. Competitive events are what teams and players thrive for, and often where the highest prize pools and viewership dwell. Some titles have live events every month while others tend to spread them further apart. Many are hosted by companies such as ESL, MLG, or UGC. In the case of a major title such as League of Legends, the game developer itself will often shoulder the responsibility of organizing and creating regular competitions. Are you an organization that is prepared to provide funding for each of your players to these events? Are you a sponsor that is willing to provide financial aid to said organizations? Will your players only participate in minor or major events? Does your game primarily host competitions online or at a venue?

3. Leagues

Developers and independent companies alike host leagues that give players a structured schedule and ladder for competition. Individuals who qualify for these leagues are often viewed as more valuable to sponsors, due to the increased exposure and legitimacy of the team. Riot Games created the League Championship Series where players can qualify for World Championship, while entities such as Major League Gaming offer the Pro League, where the top teams compete in the Season Playoffs every few months. Due to the publicity generated and increased opportunities for competition, team changes occur less once a group has qualified to a league. When evaluating a potential investment, ask: How did the team perform in the prior season? How long have they been competing together? Is there a better league you could be involved in?

4. Contracts

I could go on for hours about this one. Just like traditional sports, it’s important you make your demands clear and ensure they are completed in a timely manner. These lovely documents should appear in almost every facet of your involvement in eSports. Since most professional players are between the ages of 17 to 22, you need their job description in black and white or it may not get done. The nature of eSports for a decent period was non-contractual and based on goodwill between both parties. Goodwill will only take a business partnership so far. Ensure your ventures are secured by having a contract. How long do you want your business partnerships to last? What do you want a team to do to promote your brand? What are the minimum requirements?

5. Influence

Define your end goal and see how it can be best accomplished in your eSports venture. This is determined by doing extensive market research, or getting in contact with a company that has already done it for you. There are professional players that have very large followings but can’t influence their fan base enough to buy from you. On the flip side, there are countless eSports supporters that will do whatever they need to help their favorite players. Discount codes are a popular method of promotion, and can be created specifically for players or teams. This allows companies to monitor numbers beyond just impressions or CTR, and fully evaluate how much they are profiting. Does the player or organization have a good social ranking? How many different sponsors have they had in the last 3-5 months?

My overall goal in writing this is not to steer you away from the wonderful world of eSports. It is, in fact, to help you analyze your opportunities before you take them. It can be a tricky industry, but knowing it’s attributes will aid you in your decision making process. Good luck, and have fun.