An Introduction to the Esports Ecosystem

An Introduction to the Esports Ecosystem

An Introduction to the Esports Ecosystem

Esports organizations commonly play many a roles within the industry: be it as tournament organizers, streaming rights owners and content creators. It is known that an org can be responsable for financing a tourney through sponsorships and brand partnerships, streaming them and distributing their content to their consideration.

While it may not be a detailed, pound for pound introduction to the esports ecosystem, this swift summary should suffice for those who want to know more of the industry, including a snippet of the way orgs and sponsors operate, and the relationships between these multiple entities.

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PUBLISHERS

Esports couldn’t exist in a vacuum if not for the presence of game developers and/or publishers (such is the example of Riot Games and Valve), as those same companies tend to act as hosts and producers of the broadcasts of tournaments, as well as making deals with platforms such as Facebook and Youtube.

The biggest example remains in Riot Games’ league format, which includes the LCS, LEC, LCK and LPL in North America, Europe, Korea and China respectively, as well as Valve’s DotA 2 and their world-scope “The International” Tournament.

Developers may offer streaming licenses to external tournament organizers and streaming platforms such as ESL with their “Pro League”, which spans multiple games like Counter Strike: Global Offensive.

Nowadays, there is an incentive for any videogame publishers to turn their new title into a competitive esport, with huge benefits which include massive exposition; be it online or on the ground, as well as huge revenue, which is generated through thematic content within the game and through competitive
rewards (this is known as the “Free-To-Play” or F2P model).


PLAYERS AND TEAMS

Since streaming gaming sessions is part of the players careers, they define spaces within their streaming layouts to publicize their sponsors, teams and even their personal brand or line of products (many teams recruit influencers aside from pro players to stream under their brand). Many players sharpen their abilities to create content and their brand through the organizations, which often leads them into becoming casters, analysts, coaches, or even part of the development teams.

An esports teams owns various squads of players on diferent games—a big example is Team Liquid, an organization with vast presence in a plethora of games such as LoL, CS:GO, DotA2, Melee, and FIFA, among others. While there are teams like Liquid; which have existed for decades, many others have formed through investing entrepeneurs, entertainment companies, and traditional sports team owners, such as Rick Fox’s now-deceased Echo Fox. Some brands might even choose to create their own teams, like Red Bull, ROCCAT and Curse, back in the day.


TOURNAMENTS AND LEAGUES

Just like developers, there are third parties (such as the previously mentioned ESL) that organize their own tourneys and produce the broadcast by themselves. The rights to these broadcasts are sold to streaming platforms, more recently under exclusivity contracts within certain parameters: for example, CS:GO’s total weekly views were dramatically reduced after ESL’s Pro League rights were bought out by youtube.

Facebook Gaming, on the other side, has offered exclusive contracts with big sums of money on the table for known Twitch streamers, such as Tempo Storm’s ZeRo, who became globally recognized for being the best Smash 4 player in the world. Nowadays, he streams exclusively for Facebook Gaming as a
content creator.

Currently, esports events haven’t suffered blockades by subscription tariffs, much like it’s regularly seen on cable sports. League organizers monetize individual esports fans through ticket sales for live events, as well as ever growing deals with TV channels, where Riot Games’ LCS and ESPN comes to mind as the biggest, most recent partnership.


BRANDS

Brands are; by far, the biggest source of income for all sector son esports, however, the nature of these sponsorships and partnerships depend on each separate entity. This shows; much like in football, in the way esports teams place brand logos on their jerseys, the use of their products and equipments, much like a Logitech sponsorship providing peripherals for their players. Event organizers also provide spaces within live events for teams and brands to have presence among the public and offer new products during tailgates and fan meetings, as well as commercials during transmissions.

Market studies have shown that; more often than not, these commercials and the presence of brands among the teams, have been an effective way to increase the sale of equipment and peripherals such as keyboards and headsets to gamers who want to purchase better equipment to improve their competitive performance.

This has made gamers a very unique consumer group within the gaming
market.


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