Business of E-Sports Assignment Analysis

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E-Sport Business
E-sports involve the world of competitive and organized video gaming. It is an area that is gaining momentum and a lot of attention. It is a modern business frontier with a lot of potential considering the increasing online presence and technological advancement-sports. This new business model stands to rival the conventional sports leagues in grasping the current and future opportunities in ticket sales, sponsorships, and advertising. The vast majority of revenues in e-sports come from branding and sponsorship. The e-sport industry will need to tap into potential advertising firms and potential sponsors by striking deals that will create cash flow into the e-sports industry. However, understanding the variations in rationales of endemic and non-endemic brands and sponsors remains inconclusive. This paper explores the e-sport industrial growth from a multidimensional viewpoint by contextualizing the concept of Intel and Red bull as examples of endemic and non-endemic brands or sponsorship respectively.
There is an increasing demand for E-sport entertainment. This new market creates new opportunities for e-sport business growth and development. The rising consumer and audience demand for e-sport and the evolution of organized video game competitions have stimulated substantial attention from the sport, event, entertainment industries, advertisers, and sponsorship deals. The e-sport industry is already a colossal market. According to reports from Newzoo, about 380 million people watch e-sports globally, including 165 million e-sports enthusiasts from various religions such as North America, China, and South Korea (Willingham, 2018). This industry is already presenting formidable challenges to traditional sports. The E-sport tournaments are attracting fans and enthusiasts just like conventional professional sports events. For instance, the 2017 League of Legends World Championship attracted fans exceeding 80 million viewers, making the event one of the outstanding, popular, and famous eSports competitions (Willingham, 2018). Expanding fans and spectator-based markets attract immense interest from corporate sponsors, such as Microsoft, Samsung, and Red Bull. The sponsorships have created business deals that have fueled global eSport industry revenues by over $350 million in 2016 and expected revenue of $696 million in 2017 (Newzoo, 2017). The core highlights of the 2017 e-sport report showed an expected export industry growth of $696 million, which reflects year-on-year growth of 41.3%, brands contributing $517 about million in 2017, and brand investment will double by 2020. Other data show that e-sports is undergoing rapid growth where its current value is approximated to be worth $700 million with millions of audience worldwide and is expected to witness further exponential growth (Rogers, Farquhar & Mummert, pp.561).
Intel is undoubtedly an endemic sponsor. It is an official sponsor of the British University Esports Championship. This tech company has invested heavily in the e-sport industry. It is setting the pace in the gaming industry and e-sport experience by creating technologies that support e-sport gaming systems, including core leagues and brands. Intel is continuing to create value for e-sport fans and enthusiasts by creating diversity and inclusion initiatives. Intel will continue to grow because it is an endemic sponsor that creates value for fans. Thus, fans will view Intel as s sponsor and not an advertiser. It is likely that e-sport fans will develop loyalty towards Intel because their gaming experiences are directly link to Intel support and sponsorship through technological upgrading and unmatched mainstreaming of e-sport games.
Redbull is an example of a non-endemic sponsor or brand. Energy drinks such as red bull are commonly presented through sponsorships in e-sports. They are described as “energizers or the game.”Red bull brands or sponsorship is non-endemic sponsorship because it lacks direct link or logical connections with e-sports. Unlike Intel, Red bull brands or sponsorship will find it challenging to create mutual relations and loyalty with e-sports fans or clients. Often, it is perceived as an outsider who is aiming to exploit the e-sport fan base.
There are always discussions on endemic vs. non-endemic when it comes to advertising, product promotion, and sponsorship deals in e-sports. It is always critical to understand the difference between endemic and non-endemic because they predict the outcomes and progress in advertising or sponsorship deals in the e-sports industry. An endemic e-sport sponsor creates products and services directly for the e-sports industry. It is always a straightforward deal where the sponsor deals with products linked to that particular e-sport or specific gaming activity. A non-endemic e-sports sponsor has products or services that are not directly linked to gaming activity. In other words, endemic sponsors comprise businesses whose products and services have linked a market.
In contrast, non-endemic sponsors are ventures whose products and services are not related to...