Esports leagues to bet big on monetizing online avenues

2021 will be a crucial year for esports leagues as they look to sell more media rights in a world switching quickly towards the online gaming

The 2020 esports landscape has been teaming with franchised leagues fast becoming an integral part of the gaming frenzy worldwide. Monetizing a gaming module yields lucrative dividends in the long run, which is why sealing profitable deals for media and various broadcast rights is now an integral part of the gaming ecosystem.

All was well before the COVID-19 pandemic struck a heavy blow to live events this year, compelling tournament organizers to turn towards the online domain to ensure seamless broadcasts, and steady revenues.

E-gaming to yield more for franchises

And recent developments cement the long-term prospects of online gaming franchising. When Activision Blizzard organized Call of Duty and Overwatch Leagues online, YouTube bought exclusive broadcast rights for the same, which meant that Google would render cloud services for Activision’s online game catalog. In fact, before Activision Blizzard’s franchise Overwatch League started, Twitch apparently paid $90 million to stream the first two seasons of the league.

This move by a media giant ushered a series of similar decisions being taken by other gaming entities. Sport One followed suit, and signed a deal to create a Sport One esports channel on Facebook. Also worth mentioning was ESL and DreamHack’s pact with Blake Broadcasting to broadcast its esports tournaments in the US, Canada, and Asia, but not in China.

A functional module for organizers to capitalize

As it becomes increasingly clear that online gaming will rule the roost in days to come, it is but logical for organizers to attain broadcast media rights as a staple part of monetizing esports. Also, as previous investments made in live tournaments do not present a lucrative picture in terms of returns, investors are falling back on e-gaming as their next big bet. This has positively resulted in the creation of a workable gaming ecosystem, which can be sustained both in terms of revenues and player engagement.

Broadcast media rights have become a major part of revenue generation for major esports leagues as they look to create a sustainable ecosystem and revenue share model that will help teams receive some sort of return on their investment. If reports are to be believed, deals in media rights will grow from the current valuation of $100 million to nearly $400 million in 2021, thereby becoming the fastest stream of revenue in esports.

Viewership controls esports ecosystem

However, all these multi-million dollar deals might be of no avail, if the one quintessential factor does not support the above mentioned ecosystem: viewers. Leagues and esports organizers might strike gold with sponsors, but be it online or offline, viewer engagement will make all the difference. Viewers are the key to sponsorship deals that bring in advertisement revenue and if certain viewership numbers cannot be mopped up, sponsor commitment will be a short-term achievement.

This however, does not seem to worry stakeholders in esports, as the current pandemic has only boosted online viewership. For example, the Overwatch League Grand Finals saw a 38% year-over-year growth, with the digital AMA (average minute audience) side rocketing up 87%. The 2020 finals emerged as the most viewed match in the history of the league.

Similar was the case with COD League, which shattered all previous records with 330000 viewers for its championship match, beating the record for individual match viewership that occurred from the previous weekend in a match between the Chicago Huntsmen and OpTic Gaming Los Angeles of 156K.

Desperate times call for desperate measures

Not just due to the pandemic, but the overall industry trends suggest that esports viewership numbers have been steadily rising since 2014, up from 204 million viewers to almost 454 million in 2019. And while many predicted uncertainty during these COVID-19 times, numbers have only gone northwards, clearly signaling the fact that the future will have many media deals being cracked and audiences will turn up in large numbers across formats.