Few people would have expected esports to become the phenomenon it is today. By the end of 2023, the global market is expected to be worth more than $1.62 billion. More than $890 million of these revenues come from sponsorship and advertising deals.
As with other industries, the past couple of years have been a rocky road for esports. However, the competitive gaming scene has weathered the storm and is in a better place than ever before. For most esports teams, sponsorship deals are the bread and butter that keeps them in professional competition. However, esports sponsorship isn’t as simple as you might think. Below, we’ll explore how sponsorship really works in the esports ecosystem.
Esports Sponsorships
In many cases, esports sponsorship deals involve a brand throwing money behind an established esports team. However, brands may also decide to sponsor an entire tournament or league. Unlike broader sponsorship strategies, those tied to esports teams and events focus on specific markets. Rather than generalized messaging on social media or broadcast television, these marketing strategies hone in on streaming and gaming communities such as Twitch.
Different Types of Sponsorship Deals
In esports circles, sponsorship gets a little complicated. The most lucrative form is pure sponsorship. Teams, streamers, and influencers alike can all benefit from pure sponsorship. The advantages of this funding model are obvious. Recipients enjoy a steady income stream that tends to cover all outgoings. Typically, they also receive extensive promotion from their partners, boosting brand awareness. If you’re following the esports tournaments schedule, you’ll no doubt see team jerseys emblazoned with logos from the likes of Mountain Dew, T-Mobile, and Red Bull.
The downside is that pure sponsorship deals are reserved for the lucky few. Unless a team is making waves in S-Tier tournaments, it’s unlikely a brand is going to want to waste money on sponsoring them. Some teams may also struggle to sign themselves over as intellectual property. Although G2 Esports brought in significant financing thanks to their two-year deal with adidas, it’s hard to escape those leaf-shaped foils when looking over the G2 Esports merchandise collection.
What’s an Affiliate Code Sponsorship?
Affiliate code sponsorship is a more accessible option for most gamers and less established teams. If you’re just starting out, affiliate code sponsorship can be a great way of bringing in capital. It works just like any other affiliate programs.
Teams or players are given affiliate codes that are then used to offer discounts on particular services and products. They then need to promote these products and discount codes to their audience. Any subsequent sale is awarded a small commission.
For teams with relatively small followings, an affiliate program is an easy way to bring in a small side income. However, this does place a ceiling on potential earnings. What’s more, if you’re being too heavy-handed with your sales pitch, you run the risk of damaging your brand credibility early on.
The Hybrid Model Explained
Finally, there’s the hybrid sponsorship model. This shares some DNA with the affiliate code approach, although it brings added perks for esports teams and competitive gamers looking to evolve their career.
As well as earning a commission on any products purchased with affiliate codes, those utilizing the hybrid model enjoy exclusive discounts on products and services. They can also pocket free items that can be used in prize giveaways and competitions to followers, helping enhance brand awareness and build a more massive following. For many esports teams, this approach is useful when moving beyond low-level leagues and toward more professional competition.