Courtesy of Mercedes-Benz

As the esports scene has gotten bigger over the years, so have the sponsorships. We’ve seen sponsorship and advertising spending increase drastically from 2017, and it is expected to continue growing by the hundred-millions for many more years. Sponsorships are currently the biggest and second-fastest-growing revenue streams for esports organizations, and it makes a lot of sense. According to management consulting firm, McKinsey & Company, sponsorships from both nonendemic and endemic sponsors have greatly increased brand recall. This, of course, means the marketing is absolutely working. Given the success of current and past sponsorships, it seems likely that more and more companies will sponsor organizations and events as time progresses. Esports sponsorships are becoming increasingly important for reaching untapped audiences. As people continue making the transition from TV to streaming services, we can expect sponsorships to become more viable marketing strategies for reaching consumers, focusing on constant exposure and popular gaming icons. We’ve seen product placements everywhere during streams and events, virtual or in-person, and it doesn’t seem that train is coming to a stop anytime soon.

However, there are still many skeptical about investing in and sponsoring the esports scene. Many have stated that esports numbers are quite overinflated. Those skeptics believe the esports scene is a bubble waiting to pop as companies and teams continue to pull numbers out of thin air and heavily overvalue the industry. In an article from Kotaku, a Riot Games insider pointed out that valuation data from media organizations such as NewZoo were inflationary garbage and simply speculation. Other insiders from Fortnite and the Overwatch League very much agree. It seems the bullishness for the esports scene is setting them up for failure. This is not to say that the esports scene does not have potential; it is rather that esports popularity has not reached a level that justifies the enormous amount of investments and sponsorships pumped into it. If this bubble pops, we could see major changes in rosters, events, and production quality, among other things; however, it is unlikely that a pop in the bubble would cause the competitive scene to die out. The player bases and fan bases might not be large enough to justify the valuations of the esports industry, but they’re certainly large enough to prevent the death of esports. Will we see major withdrawals from sponsors if the bubble pops? It’s unlikely because the facts show the marketing works and will continue to work as viewership grows.