What began as a daring move by Robert Kraft, who is arguably one of the biggest names in the sports industry, has blown up and taken the world by storm thus putting Esports at the top. The New England Patriots owner on May 8, 2017, bought an OverWatch League spot for a whopping $20 million. He was followed shortly by Miami Dolphins boss, Stephen Ross, as well as many other businessmen, brands, and celebrities who have seen the potential in Esports.
These advancements are a representation of a revolution that is about to happen not only in the American Esports scene but the entire globe as well. The past couple of years have seen competitive and professional gaming attract a large following which has in turn gotten very many investors excited about the future of the industry. Essentially, Esports is likely to compete side by side with other forms of digital entertainment in the foreseeable future despite the instability and scandals that have marred the industry. Issues such as skin gambling and match-fixing have raised questions that are of key importance to long-term investors as well as advertising big shots.
To show just how serious people are taking Esports, two major players in the industry – Blizzard Entertainment and Riot Games – have taken the initiative to franchise their leagues. This has paid off quite well with investors buying permanent spots due to the increased level of confidence in and certainty of long-term growth of Esports.
“There was always this uncertainty in Esports, because other than the top teams if you were a sponsor you didn’t know if your relationship with a team was going to last three months or three years,” former vice chairman of Paramount Pictures and Phoenix1 owner, Rob Moore told Dot Esports. “It definitely has evolved from a bunch of gamers organizing tournaments to now experienced business people with substantial investment really looking to turn this into something for the long term.”
10 permanent teams will participate in 2018’s league – all 10 will share revenue and put portions of their merchandising and sponsorship revenue into a common pot. Other sources of revenue like league-wide sponsorships and merchandising will also be added in by Riot Games.
The advent of this new franchising system gives investors more incentive to venture into Esports and already very many are rushing to get a piece of the pie. Even traditional sports organizations have come to the realization that Esports is a potential gold mine and many are investing in LCS teams.
“People who are making investments and looking at building an asset value over three, five, and 10-year time horizons, those are the types of people who have been investing in this space, and I think that will continue just because of the dynamics of the economics behind sports franchises,” Moore added. “For a lot of traditional sports organizations, they’re seeing this audience and saying, ‘Hey, they’re spending more and more time watching and playing video games. We want to be a part of that.’”