Currently, esports organizations still rely on sponsorship as the primary source of revenue, with sponsorship accounting for US$837.3 million by the end of 2022. That accounts for nearly 60 percent of global esports revenues. According to a report by Newzoo, esports organizations are diversifying their revenue streams by delving into other things.
These include direct-to-fan business models such as merchandising (physical or digital), loyalty programs, and educational programs are helping organizations diversify. Merchandise has big potential as esports brands are becoming lifestyle brands. For example, Brazilian esports team LOUD invested in unique products in collaboration with a Brazilian streetwear brand, focusing on everyday clothing beyond jerseys. Popular North American esports organization 100 Thieves has built its image around streetwear apparel. PUMA has partnered with Gen.G Esports, Natus Vincere (Navi), EVOS Esports, and Cloud9 to sell PUMA branded apparel.
Besides that, loyalty programs will allow fans to receive unique content for a subscription fee and these programs incentivize members to engage with the organization’s content, bringing more revenue opportunities and diversification. They bring direct boosts to revenues and increase fan engagement with organizations, making companies more likely to appeal to potential sponsors and investors. Popular teams like Natus Vincere (Navi) have embraced blockchain technology for such programs, rewarding fans with NFTs for watching Navi players and partnered creators.
It looks like there’s a bright future for esports as we at Kakuchopurei continue covering it.
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