Which Companies Are Profiting off of eSports and How?
eSports is where indolence meets competitiveness. Keep reading to learn about the new online sports craze and the companies that are profiting off of it.
eSports, also known as electronic sports or professional gaming, is a gaming competition that involves players competing online in a variety of different video game genres. These gaming genres include first person shooter, strategy, fighting, multiple online battle arena, and more. There are several tournaments hosted for the best players in the world to compete. While this new gaming competition is an exciting innovation for gamers across the world, it is also highly profitable for those who wish to take advantage of the business.
So, Which Companies Profit from eSports?
It seems as if the companies that produce eSports games haul in the most revenue. Riot Games is the creator of the famous League of Legends (LoL), which has over 85 million players worldwide. After assessing the exploding popularity behind eSports, Riot Games quickly formed their own league for LoL players to compete in. The League of Legends Championship Series is currently in its fifth season. The events have been hosted at major sports venues such as Madison Square Garden and the Staples Center. Last year, their world championship finals attracted 27 million viewers.
Surprisingly, Riot Games doesn’t profit directly from the LoL Championship series. The company invests in eSports rather than profiting from the games. For example, the Chinese Internet company Tencent Holdings bought a majority stake from Riot Games for a price of $400 million.
Other Gaming Companies
Just as Spalding would profit from an increase in basketball players, the gaming companies are getting a steady flow of revenue from this new fad. The high sums of money at stake for some of these tournaments is incentivizing players around the world to invest heavily in the games that they love. When these games become eSports, they become more than just video games — they become a profitable competition. As a result, this adds an extra incentive for players to spend lots of time and money improving their skills.
Brands and Sponsorships
Just like professional athletic sports, sponsorships are a big part of the revenue associated with eSports. eSports have become increasingly popular to watch online. As a result, several companies are taking advantage of this marketing scheme. Just as LeBron James is sponsored by Nike, several big companies such as Red Bull are sponsoring talented eSports gamers to help improve the marketing of their brand.