The perfect hybrid between sports entertainment and authentic influencer marketing
With investments into esports organizations skyrocketing, the pressure to turn over a profit is increasing as well. Growth is great. Successful organizations have established a commercial structure that aims at moving forward that trajectory and let them grow in a sustainable way that meets the expectations of investors and the market.
Working and talking to a multitude of esports organizations there are two commercial structures of esports organizations that stood out to me. The two types are not necessarily mutually exclusive, but they fundamentally influence the self-perception of the organization.
The tournament or competition focussed esports organization
The probably most prominent examples of this kind of organization would be the Danish esports organization Astralis and OG Redbull.
Astralis has been founded by players, and with that always had a strong focus on their competitive success. They have, at this point, successfully managed to leverage their dominating position in CS:GO to grow a fanbase in their home country of Denmark that can rival any football club here. From selling out the Royal Arena Stadium to opening physical merch stores, Astralis has built a solid and loyal fanbase that they can bank on. They have managed to monetize their sporting success like no other organization and used it to diversify their roster and ad Teams in LoL and Fifa. They have made the conscious choice to not include Streamers and Entertainers under their banner and rather focus on an extensive Talent program to foster and develop new players is part of their strategy to maintain dominance in the competition.
OG Redbull has been a dominating force in another big esports title: DOTA2. Being the first and only team to win the International back to back in 2018 and 2019, OG managed to collect over 27 million USD in prize money just from that tournament alone. With the majority of owners of the company all being either still players active on their competitive roster, or former players of the competitive roster the focus on competitive success is not surprising. With the addition of a CS:GO division to the organization, OG has started to diversify its portfolio.
The Entertainment focussed esports organization
There are many organizations that tend towards that example, a quite clear one would be G2. Nobody can deny that G2 has had immense competitive success in esports, yet their understanding of self is more akin to that of entertainers.
During ESI 2021, Sabrina Ratih from G2 had a conversation with one of G2s sponsors about what made their partnership work. What stood out, apart from the product just being a good fit, is that G2s vision aligned perfectly with the brand’s needs. G2 see themselves as an “Esportainment” organization, and aim to “Be the most accomplished and entertaining media company in all of esports”.
While one aspect of entertainment is definitely a high level of esports games within tournaments and competitions, content creation outside of the competition is the foundation of G2s vision. In a recent interview G2s CEO:
“Over time you’ll see the G2 brand take on more of an entertainment proposition and the professional players we sign are more inclined to be part of podcasts and other forms of content away from the competitive side of the gaming because ultimately, we care about the eyeballs”
Similar to G2, Fnatic has built a large network of talent and content producers. Esports competitions play a major role for these organizations, but they are part of a larger plan and strategy that includes streamers and other content creators on platforms like Twitch and Youtube.
This development has an economical background, and with that, the Talent and Influencer legs of the business, are being reflected in the commercial strategy of the organizations. Entertainment through content keeps the attention and eyeballs on the organization and guarantees continuous exposure for brands that choose to sponsor the organization, bringing in major continuous media value for the organization.
Sabrina Raith summarized the reasoning behind this in the ESI session fittingly:
“That means our fans are attached to us even if there is no match for a couple of weeks, or if we lose.”
Teams that are purely focussing on competitive success are more economically vulnerable, with sponsors and audiences dropping off in case of a prolonged period of lack of success. A fate that has befallen the now decrepit Danish esports organization North, that after disappointing competitive results has ceased operations earlier this year for good after the parent company decided to cut their losses.
The move to an entertainment focussed organization is not always something done out of free volition of the teams, though. In a couple of conversations, I had with smaller esports organizations, the topic of streaming and talent vs tournaments and competition came up. While some of those organizations embrace the talent aspect right from the start, others see it as a necessary evil to keep the organization afloat. They have to make the decision early on, how they want to position themselves. With an increase of franchised esports leagues, it also becomes more difficult for incumbents teams to reach the highest league and the necessary exposure that comes with this.
A hybrid between sports entertainment and an authentic influencer marketing tool
If I am comparing media values created by both types of organizations, both are viable options for teams. Having an active Social Media presence including the players allows for maintaining exposure for sponsors overtimes without competition. It will be interesting to see if competitive teams like Astralis and OG can keep their economic momentum going, should competitive success evade them for a prolonged period of time. It would be a great sign to the whole ecosystem, proving that generational fan loyalty can be created in esports. Removing pressure for all organizations to do well continuously.
A wide net of Streamers and Talent is diversifying the content produced and enlarges the revenue stream to increased and continuous exposure, but it changes the nature of the organization. It takes them from being a sports association with a smaller reach than their traditional counterpart and turns them into the most effective marketing vehicle available.
It also bridges the gap between the hardcore esports audience and the more casual gaming audience, as traditional esports are only consumed by a particular segment of the gaming crowd. By adding content creators that create content around more casual and less competitive games, the potential reach of an entertainment organization is much wider.
Fnatic perfectly sums this up in there about section:
“driven by our ability to advance esports performance, Fnatic is the channel through which the most forward-thinking brands communicate with young people. We deliver industry-leading content, experiences, and activations through offices and facilities…”.
Investing in a sponsorship or marketing campaign with esports organizations gives the brand a holistic paid media campaign that goes far beyond the parameters of sponsorship in traditional sports, including placement in broadcasts and accesses to the unique para-social relationships streamers and talent have with the audience.
Esports organizations have the chance to be the perfect hybrid between sports entertainment and an authentic influencer marketing tool, something that will be able to ensure the continued growth of the ecosystem and industry.
