19 Jan 2021
Posted in Sport
Global esports sponsorship sector dominated by non-endemic brands worth $584m
The latest deep dive into the commercial landscape of esports finds that non-endemic brands are finally starting to dominate the sector, accounting for $584m of all sponsorship revenue. Non-endemic brands are also building their presence in tournaments, accounting for 51% of jersey sponsors at the last League of Legends World Championship, according to GlobalData, a leading data and analytics company.
Conrad Wiacek, Head of Sport Analysis at GlobalData, comments: “With COVID-19 having an impact on all sports, with major events like the Olympics forced to postpone and other sports offering shorter or more truncated seasons, the opportunity for esports to step in and fill the void was evident. However, while certain sports such as Formula One took the opportunity to deliver content and keep fans engaged, esports has not come through the pandemic unscathed.”
According to GlobalData’s latest report, ‘Global Esports Business in 2020’, esports was also a victim of the pandemic, with predictions that the sector would grow to over $1bn in revenue falling short and sponsorship revenue growing at 8% less than predicted. Additionally, growth for media rights fees was 12% less than predicted as the lack of physical events meant a reduction in ticket sales and merchandise sales of 57%. This has caused an even greater reliance on sponsorship as teams struggle to fill the revenue gap.
Wiacek continues: “While the wider sports market saw a reduction in sports sponsorship spend, with spend down 37% in 2020, esports saw the sponsorship sector grow year on year (YOY) by 7.5% thanks in part to the non-endemic brands seeing the opportunity with esports. For example, automakers such as BMW and Audi and energy drinks and kit suppliers such as Nike and PUMA all partnering with teams at the recent League of Legends World Championships.
“Non-endemic brands now see esports as a major route to capturing the attention of younger fans, and with the lack of sporting events across the world, esports now has the opportunity to cement itself as a viable alternative for marketing and sponsorship spend for those brands trying to build a relationship with that younger audience.”